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EXHIBIT 10(b)
CONFORMED COPY
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CREDIT AND GUARANTEE AGREEMENT
dated as of
November 1, 1999
among
BLOCK FINANCIAL CORPORATION,
as Borrower,
H&R BLOCK, INC.,
as Guarantor,
The Lenders Party Hereto,
BANK OF AMERICA, N.A. and CITIBANK, N.A.,
as Co-Documentation Agents
and
THE CHASE MANHATTAN BANK,
as Administrative Agent and as Syndication Agent
$750,000,000 ACQUISITION CREDIT FACILITY
CHASE SECURITIES INC.,
as Lead Arranger and Sole Book Manager
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ARTICLE I DEFINITIONS......................................................................................1
SECTION 1.1. Defined Terms............................................................................1
SECTION 1.2. Terms Generally.........................................................................15
SECTION 1.3. Classification of Loans and Borrowings..................................................16
SECTION 1.4. Accounting Terms; GAAP..................................................................16
ARTICLE II THE CREDITS....................................................................................16
SECTION 2.1. Commitments.............................................................................16
SECTION 2.2. Loans and Borrowings....................................................................16
SECTION 2.3. Requests for Revolving Borrowings.......................................................17
SECTION 2.4. Funding of Borrowings...................................................................18
SECTION 2.5. Interest Elections......................................................................18
SECTION 2.6. Termination and Reduction of Commitments................................................20
SECTION 2.7. Repayment of Loans; Evidence of Debt....................................................20
SECTION 2.8. Prepayment of Loans.....................................................................21
SECTION 2.9. Fees....................................................................................21
SECTION 2.10. Interest................................................................................22
SECTION 2.11. Alternate Rate of Interest..............................................................23
SECTION 2.12. Increased Costs.........................................................................24
SECTION 2.13. Break Funding Payments..................................................................25
SECTION 2.14. Taxes...................................................................................25
SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.............................26
SECTION 2.16. Mitigation Obligations; Replacement of Lenders..........................................28
SECTION 2.17. Mandatory Prepayments and Commitment Reductions.........................................29
ARTICLE III REPRESENTATIONS AND WARRANTIES................................................................29
SECTION 3.1. Organization; Powers....................................................................29
SECTION 3.2. Authorization; Enforceability...........................................................29
SECTION 3.3. Governmental Approvals; No Conflicts....................................................30
SECTION 3.4. Financial Condition; No Material Adverse Change.........................................30
SECTION 3.5. Properties..............................................................................31
SECTION 3.6. Litigation and Environmental Matters....................................................31
SECTION 3.7. Compliance with Laws and Agreements.....................................................32
SECTION 3.8. Investment and Holding Company Status...................................................32
SECTION 3.9. Taxes...................................................................................32
SECTION 3.10. ERISA...................................................................................32
SECTION 3.11. Disclosure..............................................................................32
SECTION 3.12. No Default..............................................................................33
SECTION 3.13. Federal Regulations.....................................................................33
SECTION 3.14. Subsidiaries............................................................................33
SECTION 3.15. Solvency................................................................................33
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SECTION 3.16. Insurance...............................................................................33
SECTION 3.17. Refund Anticipation Loan Program Documents..............................................33
SECTION 3.18. Year 2000 Matters.......................................................................33
SECTION 3.19. Certain Documents.......................................................................34
ARTICLE IV CONDITIONS.....................................................................................34
SECTION 4.1. Effective Date..........................................................................34
SECTION 4.2. Closing Date............................................................................35
SECTION 4.3. Each Loan...............................................................................36
ARTICLE V AFFIRMATIVE COVENANTS...........................................................................36
SECTION 5.1. Financial Statements and Other Information..............................................36
SECTION 5.2. Notices of Material Events..............................................................38
SECTION 5.3. Existence; Conduct of Business..........................................................38
SECTION 5.4. Payment of Obligations..................................................................38
SECTION 5.5. Maintenance of Properties; Insurance....................................................38
SECTION 5.6. Books and Records; Inspection Rights....................................................39
SECTION 5.7. Compliance with Laws....................................................................39
SECTION 5.8. Use of Proceeds.........................................................................39
ARTICLE VI NEGATIVE COVENANTS.............................................................................39
SECTION 6.1. Adjusted Net Worth......................................................................39
SECTION 6.2. Indebtedness............................................................................40
SECTION 6.3. Liens...................................................................................41
SECTION 6.4. Fundamental Changes.....................................................................43
SECTION 6.5. Transactions with Affiliates............................................................43
SECTION 6.6. Restrictive Agreements..................................................................43
SECTION 6.7. Limitation on Sale of Assets............................................................44
SECTION 6.8. Amendments to Acquisition Documents.....................................................45
ARTICLE VII GUARANTEE.....................................................................................45
SECTION 7.1. Guarantee...............................................................................45
SECTION 7.2. No Subrogation..........................................................................46
SECTION 7.3. Amendments, etc. with respect to the Obligations; Waiver of Rights......................46
SECTION 7.4. Guarantee Absolute and Unconditional....................................................47
SECTION 7.5. Reinstatement...........................................................................47
SECTION 7.6. Payments................................................................................48
ARTICLE VIII EVENTS OF DEFAULT............................................................................48
ARTICLE IX THE ADMINISTRATIVE AGENT.......................................................................50
ARTICLE X MISCELLANEOUS...................................................................................52
SECTION 10.1. Notices................................................................................52
SECTION 10.2. Waivers; Amendments....................................................................53
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SECTION 10.3. Expenses; Indemnity; Damage Waiver......................................................54
SECTION 10.4. Successors and Assigns..................................................................55
SECTION 10.5. Survival................................................................................57
SECTION 10.6. Counterparts; Integration; Effectiveness................................................57
SECTION 10.7. Severability............................................................................58
SECTION 10.8. Right of Setoff.........................................................................58
SECTION 10.9. Governing Law; Jurisdiction; Consent to Service of Process..............................58
SECTION 10.10. WAIVER OF JURY TRIAL....................................................................59
SECTION 10.11. Headings................................................................................59
SECTION 10.12. Confidentiality.........................................................................59
SECTION 10.13. Interest Rate Limitation................................................................60
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SCHEDULES:
Schedule 2.1 Commitments
Schedule 3.4(a) Guarantee Obligations
Schedule 3.6 Disclosed Matters
Schedule 3.14 Subsidiaries
Schedule 6.2 Existing Indebtedness
Schedule 6.3 Existing Liens
Schedule 6.4(b) Additional Businesses
Schedule 6.6 Existing Restrictions
EXHIBITS:
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Opinion of Borrower's Counsel
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CREDIT AND GUARANTEE AGREEMENT, dated as of November 1, 1999, among
BLOCK FINANCIAL CORPORATION, a Delaware corporation, as Borrower, H&R BLOCK,
INC., a Missouri corporation, as Guarantor, the LENDERS party hereto, and THE
CHASE MANHATTAN BANK, a New York banking corporation, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Acquisition" means the purchase by the Borrower of all of the issued
and outstanding Capital Stock of Olde and FMS pursuant to the terms of the
Acquisition Documentation.
"Acquisition Agreement" means the Stock Purchase Agreement dated as of
August 31, 1999, among the Borrower, the Guarantor, Olde, FMS and several other
parties thereto.
"Acquisition Documentation" means, collectively, the Acquisition
Agreement and all schedules, exhibits and annexes thereto and all side letters
and agreements affecting the terms thereof or entered into in connection
therewith, in each case as amended, supplemented or otherwise modified from time
to time in accordance with Section 6.8.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Adjusted Net Worth" means, at any time, Consolidated Net Worth of the
Guarantor without giving effect to reductions in stockholders' equity as a
result of repurchases by the Guarantor of its own Capital Stock subsequent to
July 31, 1999 in an aggregate amount not exceeding $500,000,000; provided that
at all times prior to the Borrower selling all or any part of Option One
Mortgage Corporation, Adjusted Net Worth shall mean Consolidated Net Worth of
the Guarantor without giving effect to reductions in stockholders' equity as a
result of repurchases by the Guarantor of its own Capital Stock subsequent to
July 31, 1999 in an aggregate amount not exceeding $100,000,000.
"Administrative Agent" means The Chase Manhattan Bank, a New York
banking corporation, in its capacity as administrative agent for the Lenders
hereunder.
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"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 2 of 1%. Any change in the Alternate Base Rate due to a change in
the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime
Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Applicable Rate" means, for any day, the rate per annum based on the
Ratings in effect on such day, as set forth under the relevant column heading
below:
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Applicable Rate for
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Facility Fees Utilization Fees
Eurodollar Payable Payable
Category Ratings ABR Loans Loans Hereunder Hereunder
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Greater than:
A by S&P or
A2 by
I Moody's 0% 0.18% 0.07% 0.15%
--------------------- ------------------ ------------------ ------------------ ------------------ ------------------
A by S&P or
A2 by
II Moody's 0% 0.265% 0.085% 0.15%
--------------------- ------------------ ------------------ ------------------ ------------------ ------------------
A - by S&P
or A3 by
III Moody's 0% 0.53% 0.095% 0.15%
--------------------- ------------------ ------------------ ------------------ ------------------ ------------------
BBB + by
S&P or Baa1
IV by Moody's 0% 0.64% 0.11% 0.15%
--------------------- ------------------ ------------------ ------------------ ------------------ ------------------
Lower than:
BBB + by
V S&P or Baa1
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Applicable Rate for
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Facility Fees Utilization Fees
Eurodollar Payable Payable
Category Ratings ABR Loans Loans Hereunder Hereunder
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by Moody's 0% 0.75% 0.125% 0.15%
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; provided that (a) if on any day the Ratings of S&P and Moody's do not fall in
the same category, then the lower of such Ratings shall be applicable for such
day, (b) if on any day the Rating of only S&P or Xxxxx'x is available, then such
Rating shall be applicable for such day and (c) if on any day a Rating is not
available from either S&P or Moody's, then the Ratings in category V above shall
be applicable for such day. Any change in the Applicable Rate resulting from a
change in Rating by either S&P or Moody's shall become effective on the date
such change is publicly announced by such rating agency.
"Assessment Rate" means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; provided that if, as a result of
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual
rate as shall be determined by the Administrative Agent to be representative of
the cost of such insurance to the Lenders.
"Asset Sale" means any Disposition of property or series of related
Dispositions of property (excluding any such Disposition permitted by clause
(a), (b), (c), (d) or (f) of Section 6.7.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.4), and accepted by the Administrative Agent,
substantially in the form of Exhibit A or any other form approved by the
Administrative Agent.
"Availability Period" means the period from and including the Closing
Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrower" means Block Financial Corporation, a Delaware corporation
and a wholly-owned Subsidiary of the Guarantor.
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"Borrowing" means Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect.
"Borrowing Request" means a request by the Borrower for a Revolving
Borrowing in accordance with Section 2.3.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
"Cash Equivalents" means (a) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-1 by S&P or P-1 by Moody's, or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of clause (b)
of this definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; or (g) shares of money market mutual or similar
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funds which invest exclusively in assets satisfying the requirements of clauses
(a) through (f) of this definition.
"Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) of shares
representing more than 25% of the aggregate ordinary voting power represented by
the issued and outstanding Capital Stock of the Guarantor; (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of the
Guarantor by Persons who were neither (i) nominated by the board of directors of
the Guarantor nor (ii) appointed by directors so nominated; (c) the acquisition
of direct or indirect Control of the Guarantor by any Person or group; or (d)
the failure of the Guarantor to own, directly or indirectly, shares representing
100% of the aggregate ordinary voting power represented by the issued and
outstanding Capital Stock of the Borrower.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.12(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Charges" has the meaning assigned to such term in Section 10.13.
"Closing Date" means the date on which the conditions specified in
Section 4.2 are satisfied (or waived in accordance with Section 10.2).
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment" means, with respect to each Lender, the commitment of such
Lender to make Revolving Loans hereunder, expressed as an amount representing
the maximum aggregate amount of such Lender's Revolving Credit Exposure
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.6 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 10.4. The initial amount of
each Lender's Commitment is set forth on Schedule 2.1, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Commitment, as
applicable.
"Confidential Information Memorandum" means the Confidential
Information Memorandum dated September 1999 and furnished to the Lenders.
"Consolidated Net Worth" means, at any time, the total amount of
stockholders' equity of the Guarantor and its consolidated Subsidiaries at such
time determined on a consolidated basis in accordance with GAAP.
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"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its property is bound.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Credit Parties" means the collective reference to the Borrower and the
Guarantor.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.6.
"Disposition" means with respect to any property, any sale, lease, sale
and leaseback, assignment, conveyance, transfer or other disposition thereof.
"dollars" or "$" refers to lawful money of the United States of
America.
"Effective Date" means the date on which the conditions specified in
Section 4.1 are satisfied (or waived in accordance with Section 10.2).
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, to the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of any Credit Party or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with any Credit Party, is treated as a single
employer under Section 414(b) or (c) of the
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Code or, solely for purposes of Section 302 of ERISA and Section 412 of the
Code, is treated as a single employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by any Credit Party or any of their ERISA Affiliates of
any liability under Title IV of ERISA with respect to the termination of any
Plan; (e) the receipt by any Credit Party or any ERISA Affiliate from the PBGC
or a plan administrator of any notice relating to an intention to terminate any
Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence
by any Credit Party or any of their ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal from any Plan or Multiemployer
Plan; or (g) the receipt by any Credit Party or any ERISA Affiliate of any
notice, or the receipt by any Multiemployer Plan from any Credit Party or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Events of Default" has the meaning assigned to such term in Article
VIII.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.16(b)), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
or is attributable to such Foreign Lender's failure or inability to comply with
Section 2.14(e), except to the extent that such Foreign Lender's assignor (if
any) was entitled, at the time of assignment, to receive additional amounts from
the Borrower with respect to such withholding tax pursuant to Section 2.14(a).
"Existing Credit Facility" has the meaning assigned to such term in
Section 4.2(f).
"Federal Funds Effective Rate" means (a) for the first day of a
Borrowing, the rate per annum which is the average of the rates on the offered
side of the Federal funds market quoted by three interbank Federal funds
brokers, selected by the Administrative Agent, at
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approximately the time the Borrower requests such Borrowing, for dollar deposits
in immediately available funds, in an amount, comparable to the principal amount
of such Borrowing and (b) for each day of such Borrowing thereafter, or for any
other amount hereunder which bears interest at the Alternate Base Rate, the rate
per annum which is the average of the rates on the offered side of the Federal
funds market quoted by three interbank Federal funds brokers, selected by the
Administrative Agent, at approximately 2:00 p.m., New York City time, on such
day for dollar deposits in immediately available funds, in an amount, comparable
to the principal amount of such Borrowing or other amount, as the case may be;
in the case of both clauses (a) and (b), as determined by the Administrative
Agent and rounded upwards, if necessary, to the nearest 1/100 of 1%.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower or the Guarantor, as
the context may require.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"FMS" means Financial Marketing Services, Inc., a Michigan corporation.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state,
provincial or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
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"Guarantee Obligation" means, as to any Person, any obligation of such
Person guaranteeing or in effect guaranteeing any Indebtedness, leases,
dividends or other obligations (the "primary obligations") of any other Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (d) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation shall be deemed to be an amount
equal as of any date of determination to the stated determinable amount of the
primary obligation in respect of which such Guarantee Obligation is made (unless
such Guarantee Obligation shall be expressly limited to a lesser amount, in
which case such lesser amount shall apply) or, if not stated or determinable,
the amount as of any date of determination of the maximum reasonably anticipated
liability in respect thereof as determined by such Person in good faith.
"Guarantor" means H&R Block, Inc., a Missouri corporation.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances and
(k) for purposes of Section
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6.2 only, all preferred stock issued by a Subsidiary of such Person. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitee" has the meaning assigned to such term in Section 10.3(b).
"Information" has the meaning assigned to such term in Section 10.12.
"Interest Election Request" means a request by the Borrower to convert
or continue a Revolving Borrowing in accordance with Section 2.5.
"Interest Payment Date" means (a) with respect to any ABR Loan, the
last day of each March, June, September and December or (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months' duration, each day prior to the last
day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period.
"Interest Period" means, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect; provided that (a) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (b) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall
be the effective date of the most recent conversion or continuation of such
Borrowing.
"Lenders" means the Persons listed on Schedule 2.1 and any other Person
that shall have become a party hereto pursuant to an Assignment and Acceptance,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Acceptance.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Dow Xxxxx Markets screen
at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be determined by reference
to such other comparable publicly available service for displaying eurodollar
rates as may be selected by the
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Administrative Agent or, in the absence of such availability, by reference to
the rate at which dollar deposits of $5,000,000 and for a maturity comparable to
such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities; provided that clause (c) above shall be deemed not to include stock
options granted by any Person to its directors, officers or employees with
respect to the Capital Stock of such Person.
"Loans" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, property or condition (financial or otherwise) of the
Guarantor and the Subsidiaries taken as a whole, (b) the ability of any Credit
Party to perform any of its obligations under this Agreement or (c) the rights
of or benefits available to the Lenders under this Agreement.
"Material Indebtedness" means Indebtedness (other than the
Loans), or obligations in respect of one or more Hedging Agreements, of any one
or more of the Credit Parties and any Subsidiaries in an aggregate principal
amount exceeding $25,000,000. For purposes of determining Material Indebtedness,
the "principal amount" of the obligations of any Credit Party or any Subsidiary
in respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that the Credit Party or such
Subsidiary would be required to pay if such Hedging Agreement were terminated at
such time.
"Maturity Date" means April 29, 2000.
"Maximum Rate" has the meaning assigned to such term in
Section 10.13.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" means (a) in connection with any Asset
Sale or any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such Asset
Sale or Recovery Event, net of attorneys' fees, accountants' fees, investment
banking fees, amounts required to be applied to the repayment of Indebtedness
secured by a Lien
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expressly permitted hereunder on any asset that is the subject of such Asset
Sale or Recovery Event and other customary fees and expenses actually incurred
in connection therewith and net of taxes paid or reasonably estimated to be
payable as a result thereof and (b) in connection with any issuance or sale of
Capital Stock or any incurrence of Indebtedness, the cash proceeds received from
such issuance or incurrence, net of attorneys' fees, investment banking fees,
accountants' fees, underwriting discounts and commissions and other customary
fees and expenses actually incurred in connection therewith.
"Obligations" means collectively, the unpaid principal of and
interest on the Loans and all other obligations and liabilities of the Borrower
(including, without limitation, interest accruing at the then applicable rate
provided herein after the maturity of the Loans and interest accruing at the
then applicable rate provided herein after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) to the Administrative
Agent or any Lender (or, in the case of any Hedging Agreement referred to below,
any Affiliate of any Lender), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, this Agreement or any Hedging
Agreement entered into by the Borrower with any Lender (or any Affiliate of any
Lender) or any other document made, delivered or given in connection herewith or
therewith, in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Administrative Agent or
to the Lenders that are required to be paid by the Borrower pursuant to the
terms of any of the foregoing agreements).
"Olde" means Olde Financial Corporation, a Michigan
corporation.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
"Participant" has the meaning assigned to such term in Section
10.4(e).
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 5.4;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not overdue by more than 30 days
or are being contested in compliance with Section 5.4;
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(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment insurance and
other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature, in each case in the ordinary
course of business; and
(e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Credit Parties or any Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which any Credit
Party or any ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.
"Pro Forma Balance Sheet" has the meaning assigned to such
term in Section 3.4(c).
"RAL Program Documents" means (a) that certain Refund
Anticipation Loan Participation Agreement, dated as of July 19, 1996, among
Borrower, Beneficial National Bank, and Beneficial Tax Masters, Inc.; (b) that
certain Refund Anticipation Loan Operations Agreement, dated as of July 19,
1996, among H&R Block Tax Services, Inc., HRB Royalty, Inc., Beneficial Tax
Masters, Inc., Beneficial National Bank, and Beneficial Franchise Company, Inc.;
and (c) all other documents, instruments, agreements or schedules now or
hereafter attached to, referred to in or delivered in connection with any or all
of the agreements referred to in the foregoing clauses (a) and (b), as any or
all of the items referred to in the foregoing clauses (a) through (c) may be
amended, modified or supplemented at any time or from time to time.
"Rating" means the respective rating of each of S&P and
Moody's applicable to the long-term senior unsecured non-credit enhanced debt of
the Borrower, as announced by S&P and Moody's from time to time.
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"Recovery Event" means any settlement of or payment in respect
of any property or casualty insurance claim or any condemnation proceeding
relating to Option One Mortgage Corporation or Option One Mortgage Acceptance
Corporation yielding Net Cash Proceeds in excess of $5,000,000 in the aggregate
while this Agreement is in effect.
"Register" has the meaning assigned to such term in Section
10.4(c).
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having
Revolving Credit Exposures and unused Commitments representing at least 51% of
the sum of the total Revolving Credit Exposures and unused Commitments at such
time.
"Revolving Credit Exposure" means, with respect to any Lender
at any time, the sum of the outstanding principal amount of such Lender's
Revolving Loans.
"Revolving Loan" means a Loan made pursuant to Section 2.3.
"S&P" means Standard & Poor's Ratings Services.
"Solvent" means, with respect to any Person on a particular
date, the condition that on such date, (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and mature, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature, and (d) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small amount of capital.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent (or its
London branch) is subject (a) with respect to the Base CD Rate, for new
negotiable nonpersonal time deposits in dollars of over $100,000 with maturities
approximately equal to three months and (b) with respect to the Adjusted LIBO
Rate, for eurocurrency funding. Such reserve percentages shall include those
imposed pursuant to Regulation D of the Board. Eurodollar Loans shall be deemed
to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
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"Subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is, as of
such date, otherwise Controlled, by the parent or one or more Subsidiaries of
the parent or by the parent and one or more Subsidiaries of the parent. Unless
the context shall otherwise require, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Guarantor, including, without limitation, the Borrower and the Subsidiaries
of the Borrower.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Three-Month Secondary CD Rate" means, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day is not a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day) or, if such rate is not so reported on such
day or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 10:00 a.m., New York City time, on
such day (or, if such day is not a Business Day, on the next preceding Business
Day) by the Administrative Agent from three negotiable certificate of deposit
dealers of recognized standing selected by it.
"Transactions" means the execution, delivery and performance
by the Credit Parties of this Agreement, the borrowing of Loans and the use of
the proceeds thereof.
"Type", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
"Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.2. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any
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agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.3. Classification of Loans and Borrowings. For
purposes of this Agreement, Loans may be classified and referred to by class
(e.g., a "Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by class
and Type (e.g., a "Eurodollar Revolving Loan"). Borrowings also may be
classified and referred to by class (e.g., a "Revolving Borrowing") or by Type
(e.g., a "Eurodollar Borrowing") or by class and Type (e.g., a "Eurodollar
Revolving Borrowing").
SECTION 1.4. Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
THE CREDITS
SECTION 2.1. Commitments. Subject to the terms and conditions
set forth herein, each Lender agrees to make Revolving Loans to the Borrower
from time to time during the Availability Period in an aggregate principal
amount that will not result in (a) such Lender's Revolving Credit Exposure
exceeding such Lender's Commitment or (b) the total Revolving Credit Exposures
exceeding the total Commitments. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Revolving Loans.
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SECTION 2.2. Loans and Borrowings.
(a) Each Revolving Loan shall be made as part of a Borrowing
consisting of Revolving Loans made by the Lenders ratably in
accordance with their respective Commitments. The failure of any
Lender to make any Loan required to be made by it shall not relieve
any other Lender of its obligations hereunder; provided that the
Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required.
(b) Subject to Section 2.11, (i) each Revolving Borrowing
shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith. Each Lender at its option
may make any Eurodollar Loan by causing any domestic or foreign branch
or Affiliate of such Lender to make such Loan; provided that any
exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of this
Agreement.
(c) At the commencement of each Interest Period for any
Eurodollar Revolving Borrowing, such Borrowing shall be in an
aggregate amount that is an integral multiple of $1,000,000 and not
less than $25,000,000. At the time that each ABR Revolving Borrowing
is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $25,000,000;
provided that an ABR Revolving Borrowing may be in an aggregate amount
that is equal to the entire unused balance of the total Commitments.
Borrowings of more than one Type may be outstanding at the same time;
provided that there shall not at any time be more than a total of six
Eurodollar Revolving Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement,
the Borrower shall not be entitled to request, or to elect to convert
or continue, any Borrowing if the Interest Period requested with
respect thereto would end after the Maturity Date.
SECTION 2.3. Requests for Revolving Borrowings. To request a
Revolving Borrowing, the Borrower shall notify the Administrative Agent of such
request by telephone (a) in the case of a Eurodollar Borrowing, not later than
11:00 a.m., New York City time, three Business Days before the date of the
proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00
a.m., New York City time, one Business Day before the date of the proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery or telecopy to the Administrative Agent
of a written Borrowing Request in a form approved by the Administrative Agent
and signed by the Borrower. Each such telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.2:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
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(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the
requirements of Section 2.4(a).
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the Borrower shall be deemed to have selected an Interest Period of one month's
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.4. Funding of Borrowings.
(a) Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately
available funds by 12:00 noon, New York City time, to the account of
the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders. The Administrative Agent will make
such Loans available to the Borrower by promptly crediting the amounts
so received, in like funds, to an account of the Borrower maintained
with the Administrative Agent in New York City and designated by the
Borrower in the applicable Borrowing Request.
(b) Unless the Administrative Agent shall have received
notice from a Lender prior to the proposed date of any Borrowing that
such Lender will not make available to the Administrative Agent such
Lender's share of such Borrowing, the Administrative Agent may assume
that such Lender has made such share available on such date in
accordance with paragraph (a) of this Section and may, in reliance
upon such assumption, make available to the Borrower a corresponding
amount. In such event, if a Lender has not in fact made its share of
the applicable Borrowing available to the Administrative Agent, then
the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount
with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of
payment to the Administrative Agent, at (i) in the case of such
Lender, the Federal Funds Effective Rate or (ii) in the case of the
Borrower, the interest rate applicable to ABR Loans. If such Lender
pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
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SECTION 2.5. Interest Elections.
(a) Each Revolving Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a
Eurodollar Revolving Borrowing, shall have an initial Interest Period
as specified in such Borrowing Request or determined pursuant to the
penultimate sentence of Section 2.3. Thereafter, the Borrower may
elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Revolving Borrowing,
may elect Interest Periods therefor, all as provided in this Section.
The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the
Borrower shall notify the Administrative Agent of such election by
telephone by the time that a Borrowing Request would be required under
Section 2.3 if the Borrower were requesting a Revolving Borrowing of
the Type resulting from such election to be made on the effective date
of such election. Each such telephonic Interest Election Request shall
be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by
the Borrower.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section
2.2:
(i) the Borrowing to which such Interest Election
Request applies and, if different options are being elected
with respect to different portions thereof, the portions
thereof to be allocated to each resulting Borrowing (in
which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant
to such Interest Election Request, which shall be a Business
Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar
Borrowing, the Interest Period to be applicable thereto
after giving effect to such election, which shall be a
period contemplated by the definition of the term "Interest
Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
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(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the
details thereof and of such Lender's portion of each resulting
Borrowing.
(e) If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Revolving Borrowing
prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such
Interest Period such Borrowing shall be converted to an ABR Borrowing.
Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so
long as an Event of Default is continuing (i) no outstanding Revolving
Borrowing may be converted to or continued as a Eurodollar Borrowing
and (ii) unless repaid, each Eurodollar Revolving Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period
applicable thereto.
SECTION 2.6. Termination and Reduction of Commitments.
(a) Unless previously terminated, the Commitments shall
terminate on the Maturity Date.
(b) The Borrower may at any time terminate, or from time to
time reduce, the Commitments; provided that (i) each reduction of the
Commitments shall be in an amount that is an integral multiple of
$1,000,000 and not less than $25,000,000 and (ii) the Borrower shall
not terminate or reduce the Commitments if, after giving effect to any
concurrent prepayment of the Loans in accordance with Section 2.8, the
Revolving Credit Exposures would exceed the total Commitments.
(c) The Borrower shall notify the Administrative Agent of
any election to terminate or reduce the Commitments under paragraph
(b) of this Section at least three Business Days prior to the
effective date of such termination or reduction, specifying such
election and the effective date thereof. Promptly following receipt of
any notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by the Borrower pursuant to
this Section shall be irrevocable; provided that a notice of
termination of the Commitments delivered by the Borrower may state
that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower
(by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied. Any termination or
reduction of the Commitments shall be permanent. Each reduction of the
Commitments shall be made ratably among the Lenders in accordance with
their respective Commitments.
SECTION 2.7. Repayment of Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to
the Administrative Agent for the account of each Lender the then
unpaid principal amount of each Revolving Loan on the Maturity Date.
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(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the
Borrower to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in
which it shall record (i) the amount of each Loan made hereunder, the
Type thereof and the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due
and payable from the Borrower to each Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent hereunder for
the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of
the existence and amounts of the obligations recorded therein;
provided that the failure of any Lender or the Administrative Agent to
maintain such accounts or any error therein shall not in any manner
affect the obligation of the Borrower to repay the Loans in accordance
with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be
evidenced by a promissory note. In such event, the Borrower shall
prepare, execute and deliver to such Lender a promissory note payable
to the order of such Lender (or, if requested by such Lender, to such
Lender and its registered assigns) and in a form approved by the
Administrative Agent. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including
after assignment pursuant to Section 10.4) be represented by one or
more promissory notes in such form payable to the order of the payee
named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
SECTION 2.8. Prepayment of Loans.
(a) The Borrower shall have the right at any time and from
time to time to prepay any Borrowing in whole or in part without
premium or penalty except as provided in Section 2.13, subject to
prior notice in accordance with paragraph (b) of this Section.
(b) The Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in
the case of prepayment of a Eurodollar Revolving Borrowing, not later
than 11:00 a.m., New York City time, three Business Days before the
date of prepayment or (ii) in the case of prepayment of an ABR
Revolving Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment. Each such notice shall
be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid; provided
that, if a notice of prepayment is given in connection with a
conditional notice of termination of the Commitments as contemplated
by Section 2.6, then such notice of prepayment may be revoked if such
notice of termination is revoked in
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accordance with Section 2.6. Promptly following receipt of any such
notice relating to a Revolving Borrowing, the Administrative Agent
shall advise the Lenders of the contents thereof. Each partial
prepayment of any Revolving Borrowing shall be in an amount that would
be permitted in the case of an advance of a Revolving Borrowing of the
same Type as provided in Section 2.2. Each prepayment of a Revolving
Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.10.
SECTION 2.9. Fees.
(a) The Borrower agrees to pay to the Administrative Agent
for the account of each Lender a facility fee, which shall accrue at
the Applicable Rate on the daily amount of the Commitment of such
Lender (whether used or unused) during the period from and including
the date hereof to but excluding the date on which such Commitment
terminates; provided that, if such Lender continues to have any
Revolving Credit Exposure after its Commitment terminates, then such
facility fee shall continue to accrue on the daily amount of such
Lender's Revolving Credit Exposure from and including the date on
which its Commitment terminates to but excluding the date on which
such Lender ceases to have any Revolving Credit Exposure. Accrued
facility fees shall be payable in arrears on the last day of March,
June, September and December of each year and on the date on which the
Commitments terminate, commencing on the first such date to occur
after the date hereof; provided that any facility fees accruing after
the date on which the Commitments terminate shall be payable on
demand. All facility fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(b) The Borrower agrees to pay to the Administrative Agent
for the account of each Lender a utilization fee, which shall accrue
at the Applicable Rate on the daily amount of the Revolving Loans of
such Lender for each day the Revolving Loans of such Lender exceed 33%
of such Lender's Commitment; provided that, if such Lender continues
to have any Revolving Credit Exposure after its Commitment terminates
and the amount of such Revolving Credit Exposure exceeds 33% of such
Lender's Commitment immediately prior to such Commitment being
terminated, then such utilization fee shall continue to accrue on the
daily amount of such Lender's Revolving Credit Exposure from and
including the date on which its Commitment terminates to but excluding
the date on which such Lender ceases to have any Revolving Credit
Exposure. Accrued utilization fees shall be payable in arrears on the
last day of March, June, September and December of each year and on
the date on which the Commitments terminate, commencing on the first
such date on which such utilization fees became due and payable;
provided that any utilization fees accruing after the date on which
the Commitments terminate shall be payable on demand. All utilization
fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first but
excluding the last day).
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(c) The Borrower agrees to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times
separately agreed upon between the Borrower and the Administrative
Agent.
(d) All fees payable hereunder shall be paid on the dates
due, in immediately available funds, to the Administrative Agent for
distribution, in the case of facility fees and utilization fees, to
the Lenders. Fees paid shall not be refundable under any
circumstances.
SECTION 2.10. Interest.
(a) Subject to paragraph (c) of this Section, the Loans
comprising each ABR Borrowing shall bear interest at a rate per annum
equal to the Alternate Base Rate plus the Applicable Rate.
(b) Subject to paragraph (c) of this Section, the Loans
comprising each Eurodollar Borrowing shall bear interest at a rate per
annum equal to the Adjusted LIBO Rate for the Interest Period in
effect for such Borrowing plus the Applicable Rate.
(c) Notwithstanding the provisions of the foregoing
paragraphs (a) and (b) of this Section, for each day during the period
from and including December 1, 1999 through and including January 15,
2000, all Loans will bear interest at a rate per annum equal to the
greater of (i) the ABR and (ii) the Federal Funds Effective Rate
determined by the Administrative Agent to be in effect for such day
plus 1.8%.
(d) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the
Borrower hereunder is not paid when due, whether at stated maturity,
upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal
to (i) in the case of overdue principal of any Loan, 2% plus the rate
otherwise applicable to such Loan as provided above or (ii) in the
case of any other amount, 2% plus the rate applicable to ABR Loans as
provided above.
(e) Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan; provided that (i)
interest accrued pursuant to paragraph (d) of this Section shall be
payable on demand, (ii) in the event of any repayment or prepayment of
any Loan (other than a prepayment of an ABR Revolving Loan prior to
the end of the Availability Period), accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such
repayment or prepayment, (iii) in the event of any conversion of any
Eurodollar Revolving Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion and (iv) all accrued interest shall
be payable upon termination of the Commitments.
(f) All interest hereunder shall be computed on the basis of
a year of 360 days, except that interest computed by reference to the
Alternate Base Rate at times
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when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days
elapsed (including the first day but excluding the last day). The
applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall
be determined by the Administrative Agent, and such determination
shall be conclusive absent manifest error. The Administrative Agent
shall as soon as practicable notify the Borrower and the Lenders of
the effective date and the amount of each change in interest rate.
SECTION 2.11. Alternate Rate of Interest. If prior to
the commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and
reasonable means do not exist for ascertaining the Adjusted LIBO Rate
or the LIBO Rate, as applicable, for such Interest Period; or
(b) the Administrative Agent is advised by the Required
Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period will not adequately and fairly reflect the
cost to such Lenders of making or maintaining their Loans included in
such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective, and (ii) if any Borrowing Request requests a Eurodollar Revolving
Borrowing, such Borrowing shall be made as an ABR Borrowing.
SECTION 2.12. Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by,
any Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank
market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or to
reduce the amount of any sum received or receivable by such Lender hereunder
(whether of principal, interest or otherwise), then the Borrower will pay
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to such Lender such additional amount or amounts as will compensate such Lender
for such additional costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law
regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's capital or on the capital
of such Lender's holding company, if any, as a consequence of this
Agreement or the Loans made by such Lender to a level below that which
such Lender or such Lender's holding company could have achieved but
for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with
respect to capital adequacy), then from time to time the Borrower will
pay to such Lender such additional amount or amounts as will
compensate such Lender or such Lender's holding company for any such
reduction suffered.
(c) A certificate of a Lender setting forth the amount or
amounts necessary to compensate such Lender or its holding company, as
the case may be, as specified in paragraph (a) or (b) of this Section
shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as
due on any such certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of
such Lender's right to demand such compensation; provided that the
Borrower shall not be required to compensate a Lender pursuant to this
Section for any increased costs or reductions incurred more than six
months prior to the date that such Lender notifies the Borrower of the
Change in Law giving rise to such increased costs or reductions and of
such Lender's intention to claim compensation therefor; provided,
further, that, if the Change in Law giving rise to such increased
costs or reductions is retroactive, then the six-month period referred
to above shall be extended to include the period of retroactive effect
thereof.
SECTION 2.13. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Revolving Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice is permitted to be
revocable under Section 2.8(b) and is revoked in accordance herewith), (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.16, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, the loss to any Lender attributable to any such event shall be
deemed to include an amount determined by such Lender to be equal to the excess,
if any, of (i) the amount of interest that such Lender would pay for a deposit
equal to the principal amount of such Loan for the period from the date of such
payment, conversion, failure or assignment to the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, convert
or continue, the duration of the Interest Period that would have resulted from
such borrowing, conversion or continuation) if the interest rate payable on such
deposit were equal to the Adjusted LIBO Rate
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for such Interest Period, over (ii)
the amount of interest that such Lender would earn on such principal amount for
such period if such Lender were to invest such principal amount for such period
at the interest rate that would be bid by such Lender (or an affiliate of such
Lender) for dollar deposits from other banks in the eurodollar market at the
commencement of such period. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
SECTION 2.14. Taxes.
(a) Any and all payments by or on account of any obligation of
the Borrower or the Guarantor hereunder shall be made free and clear of
and without deduction for any Indemnified Taxes or Other Taxes;
provided that if the Borrower or the Guarantor shall be required to
deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or
Lender (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower
or the Guarantor shall make such deductions and (iii) the Borrower or
the Guarantor shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent and
each Lender, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts
payable under this Section) paid by the Administrative Agent or such
Lender, as the case may be, and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Borrower by a
Lender, or by the Administrative Agent on its own behalf or on behalf
of a Lender, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the
Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or
other evidence of such payment reasonably satisfactory to the
Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in
which the Borrower is
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located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times
prescribed by applicable law or reasonably requested by the Borrower,
such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without
withholding or at a reduced rate.
SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.
(a) The Borrower shall make each payment required to be made
by it hereunder (whether of principal, interest or fees, or under
Section 2.12, 2.13 or 2.14, or otherwise) prior to 12:00 noon, New York
City time, on the date when due, in immediately available funds,
without set-off or counterclaim. Any amounts received after such time
on any date may, in the discretion of the Administrative Agent, be
deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall be
made to the Administrative Agent at its offices at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, except that payments pursuant to Sections 2.12, 2.13,
2.14 and 10.3 shall be made directly to + the Persons entitled thereto.
The Administrative Agent shall distribute any such payments received by
it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. If any payment hereunder shall be
due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments hereunder shall be made in
dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of
principal, interest and fees then due hereunder, such funds shall be
applied (i) first, to pay interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (ii) second, to pay
principal then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of principal then due to such
parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal
of or interest on any of its Revolving Loans resulting in such Lender
receiving payment of a greater proportion of the aggregate amount of
its Revolving Loans and accrued interest thereon than the proportion
received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in
the Revolving Loans of other Lenders to the extent necessary so that
the benefit of all such payments shall be shared by the Lenders ratably
in accordance with the aggregate amount of principal of and accrued
interest on their respective Revolving Loans, provided that (i) if any
such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by the Borrower
pursuant to and in accordance with the express terms of this Agreement
or any payment obtained by a
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Lender as consideration for the assignment of or sale of a
participation in any of its Loans to any assignee or participant, other
than to the Borrower or any Subsidiary or Affiliate thereof (as to
which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively
do so under applicable law, that any Lender acquiring a participation
pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders hereunder that the
Borrower will not make such payment, the Administrative Agent may
assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders
severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender with interest thereon,
for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at
the Federal Funds Effective Rate.
(e) If any Lender shall fail to make any payment required to
be made by it pursuant to Section 2.4(b) or 2.15(d), then the
Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by
the Administrative Agent for the account of such Lender to satisfy such
Lender's obligations under such Sections until all such unsatisfied
obligations are fully paid.
SECTION 2.16. Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.12, or
if the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to
Section 2.14, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another
of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.12 or 2.14, as the case may be,
in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous
to such Lender. The Borrower hereby agrees to pay all reasonable costs
and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) If any Lender requests compensation under Section 2.12, or
if the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to
Section 2.14, or if any Lender defaults in its obligation to fund Loans
hereunder, or if any Lender becomes an Objecting Lender, then the
Borrower may, at its sole expense and effort, upon notice to such
Lender
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and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 10.4), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts
such assignment); provided that (i) the Borrower shall have received
the prior written consent of the Administrative Agent, which consent
shall not unreasonably be withheld, (ii) such Lender shall have
received payment of an amount equal to the outstanding principal of its
Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrower
(in the case of all other amounts) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 2.12
or payments required to be made pursuant to Section 2.14, such
assignment will result in a reduction in such compensation or payments.
A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.
SECTION 2.17. Mandatory Prepayments and Commitment Reductions.
(a) If any Capital Stock or Indebtedness shall be issued or
incurred by the Guarantor, the Borrower or any Subsidiary (excluding
any Indebtedness incurred in accordance with Section 6.2(a), (b), (c),
(e), (f), (g), (h), (i), (j), (k), (l) and (m)), an amount equal to
100% of the Net Cash Proceeds thereof shall be applied on the date of
such issuance or incurrence toward the reduction of the Commitments as
set forth in Section 2.17(d).
(b) If on any date, the Guarantor, the Borrower or any
Subsidiary shall receive Net Cash Proceeds from any Asset Sale or
Recovery Event then such Net Cash Proceeds shall be applied on such
date toward the reduction of the Commitments as set forth in Section
2.17(d).
(c) If the Acquisition has not been consummated within seven
days after the Closing Date, the Commitments shall automatically
terminate on the date that is seven days after the Closing Date.
(d) Amounts to be applied in connection with Commitment
reductions made pursuant to Section 2.17 shall be applied to reduce
permanently the Commitments. Any such reduction of the Commitments
shall be accompanied by prepayment of the Loans to the extent, if any,
that the Loans exceed the amount of the Commitments as so reduced. The
application of any prepayment pursuant to Section 2.17 shall be made,
first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment
of the Loans under Section 2.17 (except in the case of Loans that are
ABR Loans) shall be accompanied by accrued interest to the date of such
prepayment on the amount prepaid.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of the Credit Parties represents and warrants to the Lenders that:
SECTION 3.1. Organization; Powers. Each of the Credit Parties and
the Subsidiaries is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, has the power and authority to
carry on its business as now conducted and, except where the failure to be so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.
SECTION 3.2. Authorization; Enforceability. The Transactions are
within each Credit Party's corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder action. This Agreement has
been duly executed and delivered by each Credit Party and constitutes a legal,
valid and binding obligation of each Credit Party, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
SECTION 3.3. Governmental Approvals; No Conflicts. The Transactions
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority, except such as have been
obtained or made and are in full force and effect, (b) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of any Credit Party or any Subsidiary or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument (other than those to be terminated on or prior to
the Closing Date) binding upon any Credit Party or any Subsidiary or their
assets, or give rise to a right thereunder to require any payment to be made by
any Credit Party or any Subsidiary, and (d) will not result in the creation or
imposition of any Lien on any asset of any Credit Party or any Subsidiary.
SECTION 3.4. Financial Condition; No Material Adverse Change.
(a) Each Credit Party has heretofore furnished to the Lenders
consolidated balance sheets and statements of income, stockholders'
equity and cash flows (i) as of and for the fiscal year ended April 30,
1999, (A) reported on by PricewaterhouseCoopers LLP, independent public
accountants, in respect of the financial statements of the Guarantor,
and (B) certified by its chief financial officer, in respect of the
financial statements of the Borrower, and (ii) as of and for the fiscal
quarter and the portion of the fiscal year ended July 31, 1999
certified by its chief financial officer. Such financial statements
present fairly, in all material respects, the financial position and
results of operations and cash flows of the Borrower and its
consolidated Subsidiaries and of the Guarantor and its consolidated
Subsidiaries as of such dates and for such periods in accordance with
GAAP, subject to year-end audit adjustments and the absence of
footnotes in the case of the statements referred to in clause (ii)
above. Except as set forth
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on Schedule 3.4(a), neither the Guarantor nor any of its consolidated
Subsidiaries had, at the date of the most recent balance sheet referred
to above, any material Guarantee Obligation, contingent liability or
liability for taxes, or any long-term lease or unusual forward or
long-term commitment, including, without limitation, any interest rate
or foreign currency swap or exchange transaction, which is not
reflected in the foregoing statements or in the notes thereto. During
the period from April 30, 1999 to and including the date hereof, and
except as disclosed in filings made by the Guarantor with the U.S.
Securities and Exchange Commission pursuant to the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended,
there has been no sale, transfer or other disposition by the Guarantor
or any of its consolidated Subsidiaries of any material part of its
business or property other than sales of financial services or mortgage
loans in the ordinary course of business and no purchase or other
acquisition of any business or property (including any Capital Stock of
any other Person) other than the acquisition of substantially all of
the assets of Xxxxxxx Xxxxxx, LLP, McGladrey & Xxxxxx, LLP and Kinder &
Xxxxx, P.C., material in relation to the consolidated financial
condition of the Guarantor and its consolidated Subsidiaries at April
30, 1999.
(b) Since April 30, 1999, there has been no material adverse
change in the business, assets, property or condition (financial or
otherwise) of the Guarantor and its Subsidiaries, taken as a whole.
(c) The unaudited pro forma consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at July 31, 1999
(including the notes thereto) (the "Pro Forma Balance Sheet"), a copy
of which has heretofore been furnished to each Lender, has been
prepared giving effect (as if such events had occurred on such date) to
(i) the consummation of the Acquisition, (ii) the Indebtedness of the
Borrower to be incurred in connection with the Acquisition and the use
of proceeds thereof and (iii) the payment of fees and expenses in
connection with the foregoing. The Pro Forma Balance Sheet has been
prepared based on the best information available to the Borrower as of
the date of delivery thereof, and presents fairly on a pro forma basis
the estimated financial position of the Borrower and its consolidated
Subsidiaries as at July 31, 1999, assuming that the events specified in
the preceding sentence had actually occurred at such date.
SECTION 3.5. Properties.
(a) Each of the Credit Parties and the Subsidiaries has good
title to, or valid leasehold interests in, all its real and personal
property material to its business, except for minor defects in title
that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended
purposes.
(b) Each of the Credit Parties and the Subsidiaries owns, or
is licensed to use, all trademarks, tradenames, copyrights, patents and
other intellectual property material to its business, and the use
thereof by the Credit Parties and the Subsidiaries does not infringe
upon the rights of any other Person, except for any such infringements
that,
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individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.6. Litigation and Environmental Matters.
(a) There are no actions, suits or proceedings by or before
any arbitrator or Governmental Authority pending against or, to the
knowledge of any Credit Party, threatened against or affecting any
Credit Party or any Subsidiary (i) as to which there is a reasonable
possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the
Disclosed Matters) or (ii) that involve this Agreement or the
Transactions.
(b) Except for the Disclosed Matters and except with respect
to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, neither
of the Credit Parties nor any Subsidiary (i) has failed to comply with
any Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Law, (ii)
has become subject to any Environmental Liability, (iii) has received
notice of any claim with respect to any Environmental Liability or (iv)
knows of any basis for any Environmental Liability.
(c) Since the date of this Agreement, there has been no change
in the status of the Disclosed Matters that, individually or in the
aggregate, has resulted in, or materially increased the likelihood of,
a Material Adverse Effect.
SECTION 3.7. Compliance with Laws and Agreements. Each of the
Credit Parties and the Subsidiaries is in compliance with all laws, regulations
and orders of any Governmental Authority applicable to it or its property and
all indentures, agreements and other instruments binding upon it or its
property, except where the failure to be so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect. No
Default has occurred and is continuing.
SECTION 3.8. Investment and Holding Company Status. Neither of the
Credit Parties nor any of the Subsidiaries is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.9. Taxes. Each of the Credit Parties and the
Subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being contested in good faith
by appropriate proceedings and for which the Guarantor, the Borrower or such
Subsidiary, as applicable, has set aside on its books adequate reserves or (b)
to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.
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SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $25,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $25,000,000 the fair
market value of the assets of all such underfunded Plans.
SECTION 3.11. Disclosure. The Credit Parties have disclosed to the
Lenders (i) all material agreements, instruments and corporate or other
restrictions to which any Credit Party or any Subsidiary is subject, and (ii)
all other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. None of the
reports, financial statements, certificates or other information furnished by or
on behalf of the Credit Parties to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or delivered hereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial
information, the Credit Parties represent only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time.
SECTION 3.12. No Default. Neither Credit Party nor any Subsidiary
is in default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
SECTION 3.13. Federal Regulations. No part of the proceeds of any
Loans will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U of the Board
as now and from time to time hereafter in effect. If requested by any Lender or
the Administrative Agent, the Borrower will furnish to the Administrative Agent
and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1 referred to in said Regulation U, as
the case may be.
SECTION 3.14. Subsidiaries. As of the date hereof, the Guarantor
has only the Subsidiaries set forth on Schedule 3.14.
SECTION 3.15. Solvency. Each Credit Party is, and after giving
effect to the incurrence of all Indebtedness and obligations being incurred in
connection herewith will be and will continue to be, Solvent.
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SECTION 3.16. Insurance. Each Credit Party and each Subsidiary of
each Credit Party maintains with financially sound and reputable insurers
insurance with respect to its properties and business and against at least such
liabilities, casualties and contingencies and in at least such types and amounts
as is customary in the case of companies engaged in the same or a similar
business or having similar properties similarly situated. The Guarantor will be
deemed to be a financially sound and reputable insurer up to the $1,000,000
limit of its self-insured retention.
SECTION 3.17. Refund Anticipation Loan Program Documents. Each of
the RAL Program Documents is in full force and effect, provided that for
purposes of this Section 3.17, clause (c) of the definition of RAL Program
Documents shall be deemed to include only those documents that have been entered
into as of the date this representation is deemed to be made; none of the
respective parties thereto is in breach of or default under any of the terms,
conditions or provisions thereof; and no event or condition has occurred or
exists which would give rise to any right on the part of any party to terminate
any or all of the obligations or liabilities of such party under any of the RAL
Program Documents. The Borrower has furnished to the Administrative Agent true,
correct and complete copies of each of the RAL Program Documents.
SECTION 3.18. Year 2000 Matters. Substantially all reprogramming
or modifications required to permit the proper functioning (but only to the
extent that such proper functioning would otherwise be impaired by the
occurrence of the year 2000) in and following the year 2000 of the computer
systems and other equipment containing embedded microchips, in either case owned
or operated by any Credit Party or any material Subsidiary or used or relied
upon in the conduct of their respective businesses (including any such systems
and other equipment supplied by others (other than any Credit Parties' external
phone systems) or with which the computer systems of any Credit Party or any
material Subsidiary interface), and the testing of substantially all such
systems and other equipment as so reprogrammed or so modified, has been
completed. The costs to any Credit Party or any Subsidiary that have not been
incurred as of the date hereof for such reprogramming and testing and for the
other reasonably foreseeable consequences to it if any improper functioning of
other computer systems and equipment containing embedded microchips due to the
occurrence of the year 2000 could not reasonably be expected to result in a
Default, Event of Default or Material Adverse Effect. Except for any
reprogramming referred to above, the computer systems of the Credit Parties and
the Subsidiaries are, and, with ordinary course upgrading and maintenance, will
continue for the term of this Agreement to be, sufficient for the conduct of
their business as currently conducted.
SECTION 3.19. Certain Documents. The Borrower has delivered to the
Administrative Agent a complete or correct copy of the Acquisition
Documentation, including any amendments, supplements or modifications with
respect thereto.
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ARTICLE IV
CONDITIONS
SECTION 4.1. Effective Date. Except as otherwise provided in
Sections 4.2 and 4.3, this Agreement shall become effective on the date on which
each of the following conditions is satisfied (or waived in accordance with
Section 10.2):
(a) The Administrative Agent (or its counsel) shall have
received from each party hereto a counterpart of this Agreement signed
on behalf of such party.
(b) The Lenders and the Administrative Agent shall have
received all fees required to be paid on or prior to the Effective
Date.
(c) Each Lender shall have received, for each Credit Party,
consolidated balance sheets and statements of income, stockholders'
equity and cash flows (i) as of and for the fiscal year ended April 30,
1999, (A) reported on by PricewaterhouseCoopers LLP, independent public
accountants, in respect of the financial statements of the Guarantor,
and (B) certified by its chief financial officer, in respect of the
financial statements of the Borrower, and (ii) as of and for the fiscal
quarter and the portion of the fiscal year ended July 31, 1999,
certified by such Credit Party's chief financial officer. Such
financial statements shall present fairly, in all material respects,
the financial position and results of operations and cash flows of the
Borrower and its consolidated Subsidiaries and of the Guarantor and its
consolidated Subsidiaries as of such dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments and the
absence of footnotes in the case of the statements referred to in
clause (ii) above.
(d) Each Lender shall have received (i) the Pro Forma Balance
Sheet, (ii) audited consolidated financial statements of Olde and
unaudited consolidated financial statements of FMS for the 1996, 1997
and 1998 fiscal years and (iii) unaudited interim consolidated
financial statements of each of Olde and FMS for each quarterly period
ended subsequent to the date of the latest applicable financial
statements delivered pursuant to clause (ii) of this paragraph as to
which such financial statements are available, and such financial
statements shall not, in the reasonable judgment of the Lenders,
reflect any material adverse change in the consolidated financial
condition of any of Olde and FMS, as reflected in the financial
statements or projections contained in the Confidential Information
Memorandum.
SECTION 4.2. Closing Date. The obligations of the Lenders to make
Loans hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 10.2):
(a) The Effective Date shall have occurred.
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(b) The Administrative Agent shall have received a reasonably
satisfactory written opinion (addressed to the Administrative Agent and
the Lenders and dated the Closing Date) of Xxxxx Xxxx LLP, counsel for
the Credit Parties, substantially in the form of Exhibit B, and
covering such other matters relating to the Credit Parties, this
Agreement, the Transactions or the Acquisition as the Required Lenders
shall reasonably request. The Credit Parties hereby request such
counsel to deliver such opinion.
(c) The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel
may reasonably request relating to the organization, existence and good
standing of the Credit Parties, the authorization of the Acquisition,
the Transactions and any other legal matters relating to the Credit
Parties, this Agreement, the Acquisition or the Transactions, all in
form and substance satisfactory to the Administrative Agent and its
counsel.
(d) The Administrative Agent shall have received a
certificate, dated the Closing Date and signed by the President, a Vice
President or a Financial Officer of each Credit Party, confirming
compliance with the conditions set forth in paragraphs (a) and (b) of
Section 4.3.
(e) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Closing Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the
Borrower hereunder.
(f) The $1,890,000,000 Credit and Guarantee Agreement, dated
as of November 1, 1999 by and among the Borrower, the Guarantor, the
lenders parties thereto from time to time and The Chase Manhattan Bank,
as administrative agent, shall be effective (such Agreement as amended
or replaced, the "Existing Credit Facility").
(g) (i) All governmental and material third party approvals
(including material landlords' and other consents) necessary in
connection with the Acquisition, the execution, delivery and
performance of this Agreement and the continuing operation of the
business of the Credit Parties and Subsidiaries shall have been
obtained and be in full force and effect, and (ii) all applicable
waiting periods shall have expired without any action being taken or
threatened by any competent Governmental Authority which would
restrain, prevent or otherwise impose adverse conditions on the
Acquisition, the financing contemplated by this Agreement or any Credit
Party or any Subsidiary.
The Administrative Agent shall notify the Borrower and the Lenders of the
Closing Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 10.2) at or prior to 3:00 p.m., New York City time, on
December 22, 1999 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).
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SECTION 4.3. Each Loan. The obligation of each Lender to make a
Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) The representations and warranties of the Credit Parties
set forth in this Agreement shall be true and correct in all material
respects on and as of the date of such Borrowing.
(b) At the time of and immediately after giving effect to such
Borrowing, no Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
each of the Credit Parties on the date thereof as to the matters specified in
paragraphs (a) and (b) of this Section.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, each of the Credit Parties covenants and agrees with the
Lenders that:
SECTION 5.1. Financial Statements and Other Information. The
Borrower will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the
Guarantor, an audited consolidated balance sheet and related statements
of operations, stockholders' equity and cash flows of the Guarantor and
its consolidated Subsidiaries as of the end of and for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by PricewaterhouseCoopers LLP or
other independent public accountants of recognized national standing
(without a "going concern" or like qualification or exception and
without any qualification or exception as to the scope of such audit)
to the effect that such consolidated financial statements present
fairly in all material respects the financial condition and results of
operations of the Guarantor and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied;
(b) within 45 days after the end of (i) in the case of the
Guarantor, each of the first three fiscal quarters of each fiscal year
of the Guarantor and (ii) in the case of the Borrower, each fiscal year
of the Borrower, consolidated balance sheets and related statements of
operations, stockholders' equity and cash flows of the Borrower and the
Guarantor and their consolidated Subsidiaries as of the end of and for
such fiscal quarter and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance
sheet, as of the end of) the previous fiscal year, all certified by a
Financial Officer of the
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Borrower and the Guarantor as presenting fairly in all material
respects the financial condition and results of operations of the
Borrower and the Guarantor and their consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments and the absence of
footnotes;
(c) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of a Financial Officer of
the Borrower and the Guarantor (i) certifying as to whether a Default
has occurred and, if a Default has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect
thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Section 6.1 and (iii) stating whether any
change in GAAP or in the application thereof has occurred since the
date of the audited financial statements referred to in Section 3.4
and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;
(d) concurrently with any delivery of financial statements
under clause (a) above, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the
extent required by accounting rules or guidelines);
(e) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
(other than routine monthly reports on Form 8-K filed by Block Mortgage
Finance, Inc. or routine filings by H&R Block Financial Advisors, Inc.
or HRB Financial Services, Inc.) filed by any Credit Party or any
Subsidiary with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of
said Commission, or with any national securities exchange, or
distributed by any Credit Party to its shareholders generally, as the
case may be; and
(f) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of any Credit Party or any Subsidiary, or compliance with the
terms of this Agreement, as the Administrative Agent or any Lender may
reasonably request.
SECTION 5.2. Notices of Material Events. The Borrower will furnish
to the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting any Credit Party or any Affiliate thereof that, if
adversely determined, could reasonably be expected to result in a
Material Adverse Effect;
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(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Borrower, the Guarantor or any
Subsidiary in an aggregate amount exceeding $25,000,000; and
(d) any other development that results in, or could reasonably
be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower and the Guarantor
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.
SECTION 5.3. Existence; Conduct of Business. Each Credit Party
will, and will cause each of the Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business; provided that the foregoing shall not prohibit
any merger, consolidation, liquidation, disposition or dissolution permitted
under Section 6.4.
SECTION 5.4. Payment of Obligations. Each Credit Party will, and
will cause each of the Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, could result in a Material Adverse Effect before
the same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b)
such Credit Party or such Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP and (c) the failure to
make payment pending such contest could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 5.5. Maintenance of Properties; Insurance. Each Credit
Party will, and will cause each of the Subsidiaries to, (a) keep and maintain
all property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain, with financially
sound and reputable insurers, insurance in such amounts and against such risks
as is customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations. The Guarantor will be
deemed to be a financially sound and reputable insurer up to the $1,000,000
limit of its self-insured retention.
SECTION 5.6. Books and Records; Inspection Rights. Each Credit
Party will, and will cause each of the Subsidiaries to, keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities. Each
Credit Party will, and will cause each of the Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.
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SECTION 5.7. Compliance with Laws. Each Credit Party will, and
will cause each of the Subsidiaries to, comply with all Contractual Obligations
and all laws, rules, regulations and orders of any Governmental Authority
applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 5.8. Use of Proceeds.
(a) The proceeds of the Loans will be used only for paying at
maturity commercial paper issued by the Borrower to finance the
Acquisition. No part of the proceeds of any Loan will be used, whether
directly or indirectly, for any purpose that entails a violation of any
of the Regulations of the Board, including Regulations U and X.
(b) The Borrower agrees that if the Borrower issues commercial
paper to finance the Acquisition on any day prior to the date that the
Acquisition is consummated, the maturity date of such commercial paper
will not be more than seven days after the date such commercial paper
is issued.
(c) The Borrower agrees that prior to the consummation of the
Acquisition, the proceeds of any commercial paper issued by the
Borrower to finance the Acquisition will be used by the Borrower solely
to pay the consideration payable in the Acquisition or to repay such
commercial paper and, pending such use, will be held by the Borrower in
the form of cash or Cash Equivalents.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal
of and interest on each Loan and all fees payable hereunder have been paid in
full, each of the Credit Parties covenants and agrees with the Lenders that:
SECTION 6.1. Adjusted Net Worth. The Guarantor will not permit
Adjusted Net Worth as at the last day of any fiscal quarter of the Guarantor to
be less than the sum of (a) $800,000,000 plus (b) 80% of the net gain attributed
to Consolidated Net Worth as a result of the sale by the Borrower of all or any
part of Option One Mortgage Corporation.
SECTION 6.2. Indebtedness. The Credit Parties will not, and will
not permit any Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness created hereunder;
(b) Indebtedness under the Existing Credit Facility;
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(c) Indebtedness existing on the date hereof and set forth in
Schedule 6.2 and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof;
(d) Indebtedness in an aggregate principal amount not to
exceed $1,000,000,000 issued pursuant to the Registration Statement of
the Borrower and the Guarantor on Form S-3 (Registration No. 333-33655
and 333-33655-01) filed with the Securities and Exchange Commission on
August 14, 1997, as amended by Amendment No. 1 filed with the
Securities and Exchange Commission on September 26, 1997, Amendment No.
2 filed with the Securities and Exchange Commission on October 2, 1997,
Amendment No. 3 filed with the Securities and Exchange Commission on
October 6, 1997 and Amendment No. 4 filed with the Securities and
Exchange Commission on October 8, 1997, which Registration Statement
became effective on October 17, 1997, provided that the obligations of
the Credit Parties hereunder shall rank pari passu with such
Indebtedness;
(e) Indebtedness consisting of trade accounts payable and
accrued expenses incurred in the ordinary cause of business;
(f) (i) Indebtedness in connection with commercial paper
issued in the United States through the Borrower which is guaranteed by
the Guarantor and (ii) Indebtedness in connection with commercial paper
issued in Canada through H&R Block Canada, Inc. which is guaranteed by
the Guarantor; provided that the sum of (A) the aggregate amount of all
Indebtedness incurred pursuant to this subsection 6.2(f) at any one
time outstanding plus (B) the Obligations outstanding at such time plus
(C) the "Obligations" (as such term is defined in the Existing Credit
Facility) under the Existing Credit Facility at such time, shall not
exceed $2,640,000,000;
(g) Indebtedness in connection with Guarantees of the
performance of any Subsidiary's obligations under or pursuant to (i)
any office lease entered into in the ordinary course of business, and
(ii) any promotional, joint-promotional, cross-promotional, joint
marketing, service, equipment or supply procurement, software license
or other similar agreement entered into by such Subsidiary with one or
more vendors, suppliers, retail businesses or other third parties in
the ordinary course of business, including, but not limited to,
indemnification obligations relating to such Subsidiary's failure to
perform its obligations under such lease or agreement;
(h) acquisition-related Indebtedness (either purchased or
assumed) and Indebtedness in connection with the Guarantor's guarantees
of the payment or performance of primary obligations of Subsidiaries of
the Guarantor in connection with such Subsidiaries' acquisition of
accounting firms and accounting related business; provided that the
aggregate amount of all Indebtedness incurred pursuant to this
subsection 6.2(h) shall not exceed $100,000,000 during any fiscal year;
(i) Indebtedness of any Credit Party to any other Credit
Party, of any Credit Party to any Subsidiary, of any Subsidiary to any
Credit Party and of any
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Subsidiary to any other Subsidiary; provided that such Indebtedness
shall not be prohibited by Section 6.5;
(j) Indebtedness in connection with repurchase agreements
pursuant to which mortgage loans of a Credit Party or a Subsidiary are
sold with the simultaneous agreement to repurchase the mortgage loans
at the same price plus interest at an agreed upon rate; provided that
the aggregate amount of all Indebtedness incurred pursuant to this
subsection 6.2(j) shall not at any time exceed $500,000,000; provided
further that no agreed upon repurchase date shall be later than 90
business days after the date of the corresponding repurchase agreement;
(k) Indebtedness in connection with Guarantees or Guarantee
Obligations which are made, given or undertaken as representations and
warranties, indemnities or assurances of the payment or performance of
primary obligations in connection with securitization transactions or
other transactions permitted hereunder, as to which primary obligations
the primary obligor is a Credit Party or a Subsidiary;
(l) Indebtedness of RSM McGladrey, Inc. ("RSM"), a Subsidiary
of the Guarantor, to McGladrey & Xxxxxx, LLP ("M&P") and certain
related trusts under (i) that certain Asset Purchase Agreement dated as
of June 28, 1999 among RSM, M&P, the Guarantor and certain other
parties signatory thereto (the "M&P Purchase Agreement") and (ii) the
Retired Partners Agreement and the Loan Agreement (as such terms are
defined in the M&P Purchase Agreement); provided that the amount
payable by RSM in respect of such Indebtedness permitted under this
paragraph (l) shall not exceed $325,000,000 in the aggregate; and
(m) Indebtedness of Olde and its Subsidiaries in connection
with (i) Capital Lease Obligations in an aggregate amount not exceeding
$10,000,000 at any time, (ii) obligations under existing mortgages in
an aggregate amount not exceeding $12,000,000 at any time, (iii)
securities sold and not yet purchased, provided that the aggregate
amount of all Indebtedness incurred pursuant to this clause (iii) shall
not at any time exceed $15,000,000, (iv) customer deposits in
the ordinary course of business, (v) payables to brokers and dealers in
the ordinary course of business and (vi) reimbursement obligations
relating to letters of credit in favor of a clearing corporation in a
face amount not to exceed $125,000,000 at any time, provided such
letters of credit are used solely to satisfy margin deposit
requirements.
SECTION 6.3. Liens. Each Credit Party will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect of
any thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of any Credit Party or
any Subsidiary existing on the date hereof and set forth in Schedule
6.3; provided that (i) such
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Lien shall not apply to any other property or asset of any Credit Party
or any Subsidiary and (ii) such Lien shall secure only those
obligations which it secures on the date hereof and extensions,
renewals and replacements thereof that do not increase the outstanding
principal amount thereof;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by any Credit Party or any Subsidiary or existing
on any property or asset of any Person that becomes a Subsidiary after
the date hereof prior to the time such Person becomes a Subsidiary;
provided that (i) such Lien is not created in -------- contemplation of
or in connection with such acquisition or such Person becoming a
Subsidiary, as the case may be, (ii) such Lien shall not apply to any
other property or assets of any Credit Party or any Subsidiary and
(iii) such Lien shall secure only those obligations which it secures on
the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be, and extensions, renewals and
replacements thereof that do not increase the outstanding principal
amount thereof;
(d) Liens arising in connection with the securitization of any
mortgage loans owned by the Borrower or any of its Subsidiaries;
(e) Liens arising in connection with the sale of any credit
card receivables owned by the Borrower or any of its Subsidiaries;
(f) Liens on fixed or capital assets acquired, constructed or
improved by any Credit Party or any Subsidiary to secure Indebtedness
of such Credit Party or such Subsidiary incurred to finance the
acquisition, construction or improvement of such fixed or capital
assets; provided that (i) such Liens and the Indebtedness secured
thereby are incurred prior to or within 90 days after such acquisition
or the completion of such construction or improvement, (ii) the
Indebtedness secured thereby does not exceed 100% of the cost of
acquiring, constructing or improving such fixed or capital assets and
(iii) such security interests shall not apply to any other property or
assets of any Credit Party or any Subsidiary;
(g) Liens arising in connection with repurchase agreements
contemplated by Section 6.2(j); provided that such security interests
shall not apply to any property or assets of any Credit Party or any
Subsidiary except for the mortgage loans or securities, as applicable,
subject to such repurchase agreements;
(h) Liens arising in connection with Indebtedness permitted by
Section 6.2(m)(v), which Liens are granted in the ordinary course of
business;
(i) Liens not otherwise permitted by this Section 6.3 so long
as the Obligations hereunder are contemporaneously secured equally and
ratably with the obligations secured thereby; and
(j) Liens not otherwise permitted by this Section 6.3 so long
as neither (i) the aggregate outstanding principal amount of the
obligations secured thereby nor (ii)
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the aggregate fair market value (determined as of the date such Lien is
incurred) of the assets subject thereto exceeds (as to the Credit
Parties and all Subsidiaries) $10,000,000 at any one time.
SECTION 6.4. Fundamental Changes.
(a) Each Credit Party will not, and will not permit any
Subsidiary to, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or sell,
transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) all or any substantial part of its assets, or
all or substantially all of the stock of any of the Subsidiaries (in
each case, whether now owned or hereafter acquired), or liquidate or
dissolve, except that, if at the time thereof and immediately after
giving effect thereto no Default shall have occurred and be continuing,
(i) any Subsidiary other than the Borrower may merge into a Credit
Party in a transaction in which the Credit Party is the surviving
corporation, (ii) any wholly owned Subsidiary other than the Borrower
may merge into any other wholly owned Subsidiary in a transaction in
which the surviving entity is a wholly owned Subsidiary, (iii) any
Subsidiary other than the Borrower may sell, transfer, lease or
otherwise dispose of its assets to the Guarantor or to another
Subsidiary and (iv) any Subsidiary other than the Borrower may
liquidate or dissolve if the Guarantor determines in good faith that
such liquidation or dissolution is in the best interests of the
Guarantor and is not materially disadvantageous to the Lenders;
provided that any such merger involving a Person that is not a
wholly owned Subsidiary immediately prior to such merger shall not be
permitted unless also permitted by Section 6.5.
(b) Except as set forth on Schedule 6.4(b), the Credit Parties
will not, and will not permit any Subsidiary to, engage to any material
extent in any business other than businesses of the type conducted by
the Credit Parties and the Subsidiaries on the date of execution of
this Agreement and businesses reasonably related thereto.
SECTION 6.5. Transactions with Affiliates. Each Credit Party will
not, and will not permit any Subsidiary to, sell, lease or otherwise transfer
any property or assets to, or purchase, lease or otherwise acquire any property
or assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
and conditions not less favorable to such Credit Party or such Subsidiary than
could be obtained on an arm's-length basis from unrelated third parties and (b)
transactions between or among the Guarantor and its wholly owned Subsidiaries
not involving any other Affiliate.
SECTION 6.6. Restrictive Agreements. The Credit Parties will not,
and will not permit any Subsidiary to, directly or indirectly, enter into, incur
or permit to exist any agreZement or other arrangement that by its terms
prohibits, restricts or imposes any condition upon (a) the ability of any Credit
Party or any Subsidiary to create, incur or permit to exist any Lien upon any of
its material property or assets, or (b) the ability of any Subsidiary to pay
dividends or other distributions with respect to any shares of its capital stock
or to make or repay loans or advances to the Guarantor or any other Subsidiary
or to Guarantee Indebtedness of the Guarantor or any
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other Subsidiary; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by this Agreement, (ii) the
foregoing shall not apply to restrictions and conditions existing on the date
hereof identified on Schedule 6.6 (but shall apply to any extension or renewal
of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(iv) clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness and (v) clause (a) of the foregoing shall not
apply to customary provisions in leases and other contracts restricting the
assignment thereof.
SECTION 6.7. Limitation on Sale of Assets. Each Credit Party will
not, and will not permit any Subsidiary to, convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person other than the
Guarantor or any wholly owned Subsidiary of the Guarantor, except:
(a) the sale or other disposition of obsolete or worn out
property in the ordinary course of business;
(b) the sale or other disposition of any property in the
ordinary course of business, provided that the aggregate book value of
all assets (other than inventory) so sold or disposed of in any period
of twelve consecutive months shall not exceed 5% of consolidated total
assets of the Guarantor and the Subsidiaries as at the beginning of
such twelve-month period;
(c) the sale of inventory (including mortgage loans) or
financial services in the ordinary course of business;
(d) the sale or discount without recourse of accounts
receivable arising in the ordinary course of business in connection
with the compromise or collection thereof;
(e) the Borrower may sell all or any part of Option One
Mortgage Corporation; and
(f) as permitted by Section 6.4.
SECTION 6.8. Amendments to Acquisition Documents. The Credit
Parties will not (a) amend, supplement or otherwise modify (pursuant to a waiver
or otherwise) the terms and conditions of the indemnities and licenses furnished
to the Credit Parties pursuant to the Acquisition Documentation or any other
document delivered by Olde, FMS, or any of their Affiliates or any of their
current or former shareholders in connection therewith such that after
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giving effect thereto such indemnities or licenses shall be materially less
favorable to the interests of the Credit Parties or the Lenders with respect
thereto or (b) otherwise amend, supplement or otherwise modify the terms and
conditions of the Acquisition Documentation or any such other documents except
for any such amendment, supplement or modification that (i) becomes effective
after the date hereof and (ii) could not reasonably be expected to have a
Material Adverse Effect.
ARTICLE VII
GUARANTEE
SECTION 7.1. Guarantee.
(a) The Guarantor hereby unconditionally and irrevocably
guarantees to the Administrative Agent and the Lenders and their
respective successors, indorsees, transferees and assigns, the prompt
and complete payment and performance by the Borrower when due (whether
at the stated maturity, by acceleration or otherwise) of the
Obligations.
(b) The Guarantor further agrees to pay any and all expenses
(including, without limitation, all fees and disbursements of counsel)
which may be paid or incurred by the Administrative Agent or any Lender
in enforcing, or obtaining advice of counsel in respect of, any rights
with respect to, or collecting, any or all of the Obligations and/or
enforcing any rights with respect to, or collecting against, the
Guarantor under this Article. This Article shall remain in full force
and effect until the Obligations and the obligations of the Guarantor
under the guarantee contained in this Article shall have been satisfied
by payment in full and the Commitments shall be terminated,
notwithstanding that from time to time prior thereto the Borrower may
be free from any Obligations.
(c) No payment or payments made by any Credit Party, any other
guarantor or any other Person or received or collected by the
Administrative Agent or any Lender from any Credit Party or any other
Person by virtue of any action or proceeding or any set-off or
appropriation or application, at any time or from time to time, in
reduction of or in payment of the Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of the
Guarantor hereunder which shall, notwithstanding any such payment or
payments, remain liable hereunder for the Obligations until the
Obligations are paid in full and the Commitments are terminated.
(d) The Guarantor agrees that whenever, at any time or from
time to time, it shall make any payment to the Administrative Agent or
any Lender on account of its liability hereunder, it will notify the
Administrative Agent and such Lender in writing that such payment is
made under this Article for such purpose.
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SECTION 7.2. No Subrogation. Notwithstanding any payment or
payments made by the Guarantor hereunder, or any set-off or application of funds
of the Guarantor by the Administrative Agent or any Lender, the Guarantor shall
not be entitled to be subrogated to any of the rights of the Administrative
Agent or any Lender against the Borrower or against any collateral security or
guarantee or right of offset held by the Administrative Agent or any Lender for
the payment of the Obligations, nor shall the Guarantor seek or be entitled to
seek any contribution or reimbursement from the Borrower in respect of payments
made by the Guarantor hereunder, until all amounts owing to the Administrative
Agent and the Lenders by the Borrower on account of the Obligations are paid in
full and the Commitments are terminated. If any amount shall be paid to the
Guarantor on account of such subrogation rights at any time when all of the
Obligations shall not have been paid in full, such amount shall be held by the
Guarantor in trust for the Administrative Agent and the Lenders, segregated from
other funds of the Guarantor, and shall, forthwith upon receipt by the
Guarantor, be turned over to the Administrative Agent in the exact form received
by the Guarantor (duly indorsed by the Guarantor to the Administrative Agent, if
required) to be applied against the Obligations, whether matured or unmatured,
in such order as the Administrative Agent may determine. The provisions of this
Section shall be effective notwithstanding the termination of this Agreement and
the payment in full of the Obligations and the termination of the Commitments.
SECTION 7.3. Amendments, etc. with respect to the Obligations;
Waiver of Rights. The Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against the Guarantor, and without
notice to or further assent by the Guarantor, any demand for payment of any of
the Obligations made by the Administrative Agent or any Lender may be rescinded
by the Administrative Agent or such Lender, and any of the Obligations
continued, and the Obligations, or the liability of any other party upon or for
any part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any Lender, and this
Agreement and any other documents executed and delivered in connection herewith
may be amended, modified, supplemented or terminated, in whole or in part, in
accordance with the provisions hereof as the Administrative Agent (or the
requisite Lenders, as the case may be) may deem advisable from time to time, and
any collateral security, guarantee or right of offset at any time held by the
Administrative Agent or any Lender for the payment of the Obligations may be
sold, exchanged, waived, surrendered or released. Neither the Administrative
Agent nor any Lender shall have any obligation to protect, secure, perfect or
insure any Lien at any time held by it as security for the Obligations or for
this Agreement or any property subject thereto. When making any demand hereunder
against the Guarantor, the Administrative Agent or any Lender may, but shall be
under no obligation to, make a similar demand on the Borrower or any other
guarantor, and any failure by the Administrative Agent or any Lender to make any
such demand or to collect any payments from the Borrower or any such other
guarantor or any release of the Borrower or such other guarantor shall not
relieve the Guarantor of its obligations or liabilities hereunder, and shall not
impair or affect the rights and remedies, express or implied, or as a matter of
law, of the Administrative Agent or any Lender against the Guarantor. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.
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SECTION 7.4. Guarantee Absolute and Unconditional. The Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Obligations and notice of or proof of reliance by the Administrative
Agent or any Lender upon this Agreement or acceptance of this Agreement; the
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon this Agreement; and all dealings between the Borrower and the Guarantor, on
the one hand, and the Administrative Agent and the Lenders, on the other, shall
likewise be conclusively presumed to have been had or consummated in reliance
upon this Agreement. The Guarantor waives diligence, presentment, protest,
demand for payment and notice of default or nonpayment to or upon the Borrower
and the Guarantor with respect to the Obligations. This Article shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity, regularity or enforceability of this
Agreement, any other documents executed and delivered in connection herewith,
any of the Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Administrative Agent or any Lender, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by the Guarantor against the Administrative Agent or
any Lender, or (c) any other circumstance whatsoever (with or without notice to
or knowledge of the Borrower or the Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower for the
Obligations, or of the Guarantor under this Article, in bankruptcy or in any
other instance. When pursuing its rights and remedies hereunder against the
Guarantor, the Administrative Agent and any Lender may, but shall be under no
obligation to, pursue such rights and remedies as it may have against the
Borrower or any other Person or against any collateral security or guarantee for
the Obligations or any right of offset with respect thereto, and any failure by
the Administrative Agent or any Lender to pursue such other rights or remedies
or to collect any payments from the Borrower or any such other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of the Borrower or any such other Person or of
any such collateral security, guarantee or right of offset, shall not relieve
the Guarantor of any liability hereunder, and shall not impair or affect the
rights and remedies, whether express, implied or available as a matter of law,
of the Administrative Agent or any Lender against the Guarantor. This Article
shall remain in full force and effect and be binding in accordance with and to
the extent of its terms upon the Guarantor and its successors and assigns, and
shall inure to the benefit of the Administrative Agent and the Lenders, and
their respective successors, indorsees, transferees and assigns, until all the
Obligations and the obligations of the Guarantor under this Agreement shall have
been satisfied by payment in full and the Commitments shall be terminated,
notwithstanding that from time to time during the term of this Agreement the
Borrower may be free from any Obligations.
SECTION 7.5. Reinstatement. This Article shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by the Administrative Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of any Credit
Party or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, any Credit Party or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
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SECTION 7.6. Payments. The Guarantor hereby agrees that all
payments required to be made by it hereunder will be made to the Administrative
Agent without set-off or counterclaim in accordance with the terms of the
Obligations, including, without limitation, in the currency in which payment is
due.
ARTICLE VIII
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall
occur:
(a) the Borrower shall fail to pay any principal of any Loan
when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause
(a) of this Article) payable under this Agreement, when and as the same
shall become due and payable, and such failure shall continue
unremedied for a period of five days;
(c) any representation or warranty made or deemed made by or
on behalf of any Credit Party or any Subsidiary in or in connection
with this Agreement or any amendment or modification hereof, or in any
report, certificate, financial statement or other document furnished
pursuant to or in connection with this Agreement or any amendment or
modification hereof, shall prove to have been incorrect in any material
respect when made or deemed made;
(d) any Credit Party shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.2, 5.3 (with
respect to the Credit Parties' existence) or 5.8 or in Article VI;
(e) any Credit Party shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement (other
than those specified in clause (a), (b) or (d) of this Article), and
such failure shall continue unremedied for a period of 30 days after
notice thereof from the Administrative Agent (given at the request of
any Lender) to the Borrower;
(f) any Credit Party or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become
due and payable (after expiration of any applicable grace or cure
period);
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (after expiration of any applicable grace or cure
period) the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material
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Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the
property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of any Credit Party or any
Subsidiary or its debts, or of a substantial part of its assets, under
any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for any Credit Party or any Subsidiary or for a substantial
part of its assets, and, in any such case, such proceeding or petition
shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;
(i) any Credit Party or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or petition described in
clause (h) of this Article, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary or
for a substantial part of its assets, (iv) file an answer admitting the
material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors
or (vi) take any action for the purpose of effecting any of the
foregoing;
(j) any Credit Party or any Subsidiary shall become unable,
admit in writing or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $15,000,000 shall be rendered against the
Guarantor, the Borrower, any Subsidiary or any combination thereof and
the same shall remain undischarged for a period of 30 consecutive days
during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to attach or levy upon
any assets of any Credit Party or any Subsidiary to enforce any such
judgment;
(l) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in a
Material Adverse Effect;
(m) a Change in Control shall occur;
(n) the Guarantee contained in Article VII herein shall cease,
for any reason, to be in full force and effect in any material respect
or any Credit Party shall so assert; or
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(o) any of the RAL Program Documents or any material term or
provision thereof shall cease to be in full force and effect; or any
party thereto shall, or shall purport to, terminate, repudiate, declare
voidable or void or otherwise contest any of the RAL Program Documents
or any material term or provision thereof or any material obligation or
liability of any party thereunder; or any party thereto shall default
beyond any applicable grace or cure period in the observance or
performance of any material term, provision or condition thereof;
then, and in every such event (other than an event with respect to the Credit
Parties described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other Obligations of the Credit Parties
accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Credit Parties; and in case of any event with respect to
the Credit Parties described in clause (h) or (i) of this Article, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
Obligations of the Credit Parties accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Credit Parties.
ARTICLE IX
THE ADMINISTRATIVE AGENT
Each of the Lenders hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent, and
such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
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discretionary rights and powers expressly contemplated hereby that the
Administrative Agent is required to exercise in writing by the Required Lenders,
and (c) except as expressly set forth herein, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to any Credit Party or any Subsidiary that is
communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or when expressly, required hereby, all the Lenders) or in
the absence of its own gross negligence or wilful misconduct. The Administrative
Agent shall be deemed not to have knowledge of any Default unless and until
written notice thereof is given to the Administrative Agent by any Credit Party
or a Lender, and the Administrative Agent shall not be responsible for or have
any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement, (ii) the contents
of any certificate, report or other document delivered hereunder or in
connection herewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement or any
other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for any Credit Party), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
The Administrative Agent may perform any and all of its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and of all its duties and exercise its rights and
powers through their respective Related Parties. The exculpatory provisions of
the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be a bank with an office in New York,
New York, or an Affiliate of any such bank.
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Upon the acceptance of its appointment as Administrative Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Article and
Section 10.3 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any related agreement or any document furnished hereunder or thereunder.
Notwithstanding anything to the contrary contained in this
Agreement, the parties hereto hereby agree that no agent (other than the
Administrative Agent) shall have any rights, duties or responsibilities in its
capacity as agent hereunder and that no agent (other than the Administrative
Agent) shall have the authority to take any action hereunder in its capacity as
such.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower or the Guarantor, to it at 0000 Xxxx
Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, Attention of Xxxxx Xxxxxx
(Telecopy No. (000) 000-0000);
(b) if to the Administrative Agent, to The Chase Manhattan
Bank, Agent Bank Services Group, One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxxxxx Xxxxxx (Telecopy No.
(000) 000-0000), with a copy to The Chase Manhattan Bank, 00 Xxxxx
XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention of Xxxx Xxxxx
(Telecopy No. (000) 000-0000); and
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(c) if to any Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
(d) Any party hereto may change its address or telecopy number
for notices and other communications hereunder by notice to the other
parties hereto. All notices and other communications given to any party
hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt.
SECTION 10.2. Waivers; Amendments.
(a) No failure or delay by the Administrative Agent or any
Lender in exercising any right or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such
right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and
remedies of the Administrative Agent and the Lenders hereunder are
cumulative and are not exclusive of any rights or remedies that they
would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by the Credit Parties therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b)
of this Section, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan
shall not be construed as a waiver of any Default, regardless of
whether the Administrative Agent or any Lender may have had notice or
knowledge of such Default at the time.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Credit Parties and the
Required Lenders or by the Credit Parties and the Administrative Agent
with the consent of the Required Lenders; provided that no such
agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any
Loan or reduce the rate of interest thereon, or reduce any fees payable
hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of
any Loan, or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written
consent of each Lender affected thereby, (iv) change Section 2.15(b) or
(c) in a manner that would alter the pro rata sharing of payments
required thereby, without the written consent of each Lender, (v)
release the guarantee contained in Article VII, without the written
consent of each Lender or (vi) change any of the provisions of this
Section or the definition of "Required Lenders" or any other provision
hereof specifying the number or percentage of Lenders required to
waive, amend or modify any rights hereunder or make any determination
or grant any consent hereunder, without the written consent of each
Lender; provided, further, that no such agreement shall amend, modify
or otherwise affect the rights or duties of the Administrative Agent
hereunder without the prior written consent of the Administrative
Agent.
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SECTION 10.3. Expenses; Indemnity; Damage Waiver.
(a) The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent, in connection with the syndication of the credit facilities provided for
herein, the preparation and administration of this Agreement and any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated) and (ii) all
out-of-pocket expenses incurred by the Administrative Agent, or any Lender,
including the fees, charges and disbursements of any counsel for the
Administrative Agent, or any Lender, in connection with the enforcement or
protection of its rights in connection with this Agreement, including its rights
under this Section, or in connection with the Loans made hereunder, including in
connection with any workout, restructuring or negotiations in respect thereof.
(b) The Credit Parties shall jointly and severally indemnify
the Administrative Agent and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an "Indemnitee") against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or the use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Credit Parties or any
Subsidiaries, or any Environmental Liability related in any way to the Credit
Parties or any Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) To the extent that any Credit Party fails to pay any
amount required to be paid by it to the Administrative Agent under paragraph (a)
or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent such Lender's Applicable Percentage (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent in its capacity as such. The
Administrative Agent shall have the right to deduct any amount owed to it by any
Lender under this paragraph (c) from any payment made by it to such Lender
hereunder.
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(d) To the extent permitted by applicable law, the Credit
Parties shall not assert, and hereby waive, any claim against any
Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable
promptly after written demand therefor.
SECTION 10.4. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that no Credit Party
may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by any Credit Party without such
consent shall be null and void). Nothing in this Agreement, expressed
or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted
hereby and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent and the Lenders) any legal
or equitable right, remedy or claim under or by reason of this
Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans at the time owing to
it); provided that (i) except in the case of an assignment to a Lender
or an Affiliate of a Lender, each of the Borrower and the
Administrative Agent must give its prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii)
except in the case of an assignment to a Lender or an Affiliate of a
Lender or an assignment of the entire remaining amount of the
assigning Lender's Commitment, the amount of the Commitment of the
assigning Lender subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than
$5,000,000 unless each of the Borrower and the Administrative Agent
otherwise consent, (iii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's
rights and obligations under this Agreement, (iv) the parties to each
assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a processing and recordation
fee of $3,500, and (v) the assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an Administrative
Questionnaire; provided, further, that any consent of the Borrower
otherwise required under this paragraph shall not be required if an
Event of Default has occurred and is continuing. Upon acceptance and
recording pursuant to paragraph (d) of this Section, from and after
the effective date specified in each Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights
and obligations of a Lender under this Agreement, and the assigning
Lender thereunder
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shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the
assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 2.12, 2.13, 2.14 and 10.3). Any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this paragraph shall be treated
for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with
paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices in The
City of New York a copy of each Assignment and Acceptance delivered to
it and a register for the recordation of the names and addresses of
the Lenders, and the Commitment of, and principal amount of the Loans
owing to, each Lender pursuant to the terms hereof from time to time
(the "Register"). The entries in the Register shall be conclusive, and
each Credit Party, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the
assignee's completed Administrative Questionnaire (unless the assignee
shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) of this Section and any written
consent to such assignment required by paragraph (b) of this Section,
the Administrative Agent shall accept such Assignment and Acceptance
and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it
has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of any Credit Party
or the Administrative Agent, sell participations to one or more banks
or other entities (a "Participant") in all or a portion of such
Lender's rights and obligations under this Agreement (including all or
a portion of its Commitment and the Loans owing to it); provided that
(i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such obligations and (iii) the Credit Parties, the
Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any
provision of this Agreement; provided that such agreement or
instrument may provide that such Lender will not, without the consent
of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 10.2(b) that affects such
Participant. Subject to paragraph (f) of this Section, the Borrower
agrees that each Participant shall be entitled to
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the benefits of Sections 2.12, 2.13 and 2.14 to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant
to paragraph (b) of this Section.
(f) A Participant shall not be entitled to receive any
greater payment under Section 2.12 or 2.14 than the applicable Lender
would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 2.14 unless the Borrower is
notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with
Section 2.14(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any such pledge or
assignment to a Federal Reserve Bank, and this Section shall not apply
to any such pledge or assignment of a security interest; provided that
no such pledge or assignment of a security interest shall release a
Lender from any of its obligations hereunder or substitute any such
assignee for such Lender as a party hereto.
SECTION 10.5. Survival. All covenants, agreements,
representations and warranties made by the Credit Parties herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the
making of any Loans regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent or any Lender
may have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any fee or any other amount payable under this Agreement is outstanding
and unpaid and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.12, 2.13, 2.14 and 10.3 and Article IX shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Commitments or the termination of this Agreement or any
provision hereof.
SECTION 10.6. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.1, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an
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executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 10.7. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.8. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of either Credit Party against any of and
all the obligations of such Credit Party now or hereafter existing under this
Agreement held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Lender under this Section are in addition to other
rights and remedies (including other rights of setoff) which such Lender may
have.
SECTION 10.9. Governing Law; Jurisdiction; Consent to Service
of Process.
(a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Each Credit Party hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction
of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement, or
for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law,
in such Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law. Nothing in this Agreement shall affect
any right that the Administrative Agent or any Lender may otherwise
have to bring any action or proceeding relating to this Agreement
against any Credit Party or its properties in the courts of any
jurisdiction.
(c) Each Credit Party hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so,
any objection which it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to
this Agreement in any court referred to in paragraph (b) of this
Section. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the
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defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 10.1.
Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 10.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 10.12. Confidentiality. Each of the Administrative
Agent and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to any assignee of
or Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the consent of the Borrower
or (h) to the extent such Information (i) becomes publicly available other than
as a result of a breach of this Section by it or (ii) becomes available to the
Administrative Agent or any Lender on a nonconfidential basis from a source
other than any Credit Party. For the purposes of this Section, "Information"
means all information received from any Credit Party relating to any Credit
Party or its business, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by such Credit Party; provided that, in the case of information
received from any Credit Party after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the
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confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
SECTION 10.13. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
BLOCK FINANCIAL CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------------------
Title: President
H&R BLOCK, INC.
By: /s/ Xxxxx Xxxxxx
--------------------------------------------
Title: Senior Vice President and Chief
Financial Officer
THE CHASE MANHATTAN BANK,
as a Lender and as Administrative Agent
By: /s/ Xxxx Xxxxxxxx
--------------------------------------------
Title: Vice President
BANK OF AMERICA, N.A.
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------------
Title: Vice President
CITIBANK, N.A.
By: /s/Xxxx Xxxxxxxxx Packard
--------------------------------------------
Title: Vice President
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00
XXXXX XXXX XX XXXXXX
By: /s/ X.X. Xxxxxx
-------------------------------------------
Title: Senior Manager
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH
By: /s/ Xxxx Xxxxxx
-------------------------------------------
Title: Vice President
By: /s/ Xxxxx Xxxxxx
-------------------------------------------
Title: Associate
BANK ONE, NA
(Main Office Chicago)
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------------
Title: Vice President
COMMERZBANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By: /s/ Xxxx Xxxxxx
-------------------------------------------
Title: Assistant Vice President
By: /s/ J. Xxxxxxx Shortly
-------------------------------------------
Title: Senior Vice President
TORONTO DOMINION (TEXAS), INC.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------------
Title: Vice President
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CREDIT LYONNAIS, NEW YORK BRANCH
By: /s/ W. Xxx Xxxxxxx
-------------------------------------------
Title: Vice President
THE BANK OF NEW YORK
By: /s/ Xxxxx X. Xxxxx
-------------------------------------------
Title: Vice President
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SCHEDULE 2.1
COMMITMENTS
Lender Commitment
------ ----------
ADMINISTRATIVE AND SYNDICATION AGENT
THE CHASE MANHATTAN BANK $ 75,000,000
CO-DOCUMENTATION AGENTS
BANK OF AMERICA, N.A. 75,000,000
CITIBANK, N.A. 75,000,000
PARTICIPANTS
ROYAL BANK OF CANADA 75,000,000
WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH 75,000,000
BANK ONE, NA 75,000,000
COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES 75,000,000
TORONTO DOMINION (TEXAS), INC. 75,000,000
CREDIT LYONNAIS, NEW YORK BRANCH 75,000,000
THE BANK OF NEW YORK 75,000,000
------------
TOTAL: $750,000,000
============
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SCHEDULE 3.4(a)
GUARANTEE OBLIGATIONS
- Guarantee Obligations of the Borrower which have been given or made as
representations or warranties, indemnities or assurance of the payment
or performance of primary obligations of Subsidiaries of the Borrower
in connection with securitization transactions.
- Guarantee Obligations of the Guarantor or its Subsidiaries which have
been given or made as indemnities or assurance of the payment or
performance of primary obligations of Subsidiaries of the Guarantor in
connection with such Subsidiaries' acquisitions of (i) all the Capital
Stock of Xxxxxxxx Xxxxxxx Xxxxxx Xxxxx, Inc. on May 15, 1998, (ii)
substantially all of the assets of Xxxxxxxx Xxxxxxxxxx Xxxxxx and
Xxxxxxxx, LLP and Practice Development Institute, LLC on October 21,
1998, (iii) substantially all of the assets Xxxx, Sapper & Xxxxxx, LLP
on November 2, 1998, (iv) substantially all of the assets of Freed
Xxxxxx Xxxxx & Xxxxxx, P.C. and Freed Xxxxxx ABL Services, Inc. on
November 3, 1998, (v) substantially all of the assets of Xxxxxxx
Xxxxxx, LLP, on May 28, 1999, (vi) substantially all of the assets of
McGladrey & Xxxxxx, LLP on August 2, 1999, (vii) substantially all of
the assets of Xxxxxxx Xxxxxxx & Company on December 15, 1998, (viii)
substantially all of the assets of X.X. Xxxx & Company on April 16,
1999, (ix) substantially all of the assets of Berg, DeMarco, Xxxxx &
Sawatski & Co. on February 25, 1999, (x) Troupe Xxxxx Xxxxxxxxx & Xxxx,
L.L.C., by merger on December 2, 1998, (xi) substantially all of the
assets of X.X. Xxxxxx & Associates, P.C. on March 18, 1999, (xii)
substantially all of the assets of Xxxxxxxxx, Xxxxxxx & Xxxx, P.C. on
February 26, 1999, and (xiv) substantially all of the assets of Kinder
& Xxxxx, P.C. on September 24, 1999.
72
SCHEDULE 3.6
DISCLOSED MATTERS
-NONE-
73
SCHEDULE 3.14
SUBSIDIARIES
The following is a list of the direct and indirect subsidiaries of H&R
Block, Inc., a Missouri corporation. All active subsidiaries do business under
their corporate names listed below or close derivatives thereof:
Name Jurisdiction in
---- which organized
---------------
H&R Block Group, Inc...................................................... Delaware (1)
Block Investment Corporation.............................................. Delaware (1)
HRB Management, Inc....................................................... Missouri (2)
H&R Block Tax Services, Inc............................................... Missouri (2)
H&R Block Eastern Tax Services, Inc....................................... Missouri (3)
H&R Block of Dallas, Inc.................................................. Texas (3)
HRB Partners, Inc......................................................... Delaware (4)
H&R Block and Associates, L.P............................................. Delaware (5)
HRB Royalty, Inc.......................................................... Delaware (3)
BWA Advertising, Inc...................................................... Missouri (3)
H&R Block Canada, Inc..................................................... Canada (3)
H&R Block (Nova Scotia), Incorporated..................................... Nova Scotia (6)
Cashplan Systems, Inc..................................................... British Columbia (6)
H&R Block (Guam), Inc..................................................... Guam (3)
H&R Block Limited......................................................... New South Wales (7)
Block Financial Corporation............................................... Delaware (2)
Franchise Partner, Inc.................................................... Nevada (8)
MECA Sub - LFOD, Ltd...................................................... New Hampshire (8)
Block Mortgage Finance, Inc............................................... Delaware (9)
Option One Mortgage Corporation........................................... California (8)
74
Name Jurisdiction in
---- which organized
---------------
Option One Mortgage Acceptance Corporation................................ Delaware (10)
Premier Trust Deed Services, Inc.......................................... California (10)
Companion Insurance, Ltd.................................................. Bermuda (11)
H&R Block Tax and Financial Services Limited.............................. United Kingdom (11)
H&R Block Financial Advisors, Inc......................................... Delaware (8)
H&R Block Insurance Services, Inc......................................... Delaware (8)
Premier Mortgage Services of Washington Inc............................... Washington (10)
H&R Block Home Loans, Inc................................................. California (10)
H&R Block Mortgage Corporation............................................ Ontario (10)
HRB Business Services, Inc................................................ Delaware (2)
DMJK Business Services, Inc............................................... Missouri (13)
FERS Business Services, Inc............................................... Delaware (13)
Practice Development Institute, Inc....................................... Delaware (13)
Block Holdings, Inc....................................................... Illinois (13)
FERS Personal Financial Services, Inc..................................... Delaware (13)
KSM Business Services, Inc................................................ Delaware (13)
FM Business Services, Inc................................................. Delaware (13)
Freed Xxxxxx ABL Services, Inc........................................... Delaware (13)
NCS Mortgage Services, L.L.C.............................................. Georgia (14)
NCS Mortgage Services II, L.L.C........................................... Georgia (14)
Birchtree Financial Services, Inc......................................... Oklahoma (8)
Companion Mortgage Corporation............................................ Delaware (8)
Option One Direct Insurance Agency, Inc................................... California (10)
Assurance Mortgage Corporation of America................................. Massachusetts (10)
RSM McGladrey, Inc........................................................ Delaware (13)
X.X. Xxxx Business Services, Inc.......................................... Delaware (13)
75
Name Jurisdiction in
---- which organized
---------------
RP Business Services, Inc................................................. Delaware (13)
76
WS Business Services, Inc................................................. Delaware (13)
Xxx Investments, Inc...................................................... Texas (15)
X.X. Xxxx Investment Advisors, LLC........................................ Maryland (16)
McGladrey Contract Business Services, L.L.C............................... Minnesota (17)
H&R Block Enterprises, Inc................................................ Missouri (3)
H&R Block Eastern Enterprises, Inc........................................ Missouri (18)
H&R Block NC Tax Services, Inc............................................ Missouri (18)
AJR Acquisition, Inc...................................................... North Carolina (1)
HRB Retail Services, Inc.................................................. Delaware (2)
Notes to Subsidiaries of H&R Block, Inc.:
(1) Wholly owned subsidiary of H&R Block, Inc.
(2) Wholly owned subsidiary of H&R Block Group, Inc.
(3) Wholly owned subsidiary of H&R Block Tax Services, Inc.
(4) Wholly owned subsidiary of H&R Block of Dallas, Inc.
(5) Limited partnership in which H&R Block Tax Services, Inc. is a 1%
general partner and HRB Partners, Inc. is a 99% limited partner.
(6) Wholly owned subsidiary of H&R Block Canada, Inc.
(7) Wholly owned subsidiary of HRB Royalty, Inc.
(8) Wholly owned subsidiary of Block Financial Corporation.
(9) Wholly owned subsidiary of Companion Mortgage Corporation.
(10) Wholly owned subsidiary of Option One Mortgage Corporation.
(11) Wholly owned subsidiary of HRB Management, Inc.
(12) Wholly owned subsidiary of Premier Trust Deed Services, Inc.
(13) Wholly owned subsidiary of HRB Business Services, Inc.
(14) Limited liability company in which Block Financial Corporation has a
96.25% membership interest and non-affiliated individuals have a
combined 3.75% membership interest.
(15) Wholly owned subsidiary of WS Business Services, Inc.
(16) Limited liability company in which X.X. Xxxx Business Services, Inc.
has a 100% membership interest.
(17) Limited liability company in which
RSM McGladrey, Inc. has a 100% membership interest.
(18) Wholly owned subsidiary of H&R Block Eastern Tax Services, Inc.
77
SCHEDULE 6.2
EXISTING INDEBTEDNESS
- Back-up credit facility for Canadian commercial paper program which is
guaranteed by H&R Block, Inc., in an aggregate principal amount of
approximately $125,000,000.
- H&R Block, Inc. guarantee of Subsidiaries' obligations under surety
bonds and fidelity bonds issued pursuant to state mortgage licensing
requirements.
- Indebtedness or obligations in respect of one or more Hedging
Agreements of any one or more of the Credit Parties and any
Subsidiaries in an aggregate principal amount not exceeding
$25,000,000. For purposes hereof, the "principal amount" of the
obligations of any Credit Party or any Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Credit Party or such
Subsidiary would be required to pay if such Hedging Agreement were
terminated at such time.
- Credit facility for New York licensing purposes for Option One Mortgage
Corporation in an aggregate principal amount of $1,000,000.
78
SCHEDULE 6.3
EXISTING LIENS
-NONE-
79
SCHEDULE 6.4(b)
ADDITIONAL BUSINESSES
- Financial planning and/or advisory products and services in the United
States, Canada, the United Kingdom and Australia, including (without
limitation) brokerage services (stocks, bonds, mutual funds), IRAs
(United States) and RSPs (Canada), 401(k) rollover products and
services, insurance and annuities.
- Finance Company Business (consumer finance and mortgage loan related
products and services in addition to the consumer finance, credit card
and mortgage business currently conducted by the Credit Parties and
their Subsidiaries).
- Check cashing.
80
SCHEDULE 6.6
EXISTING RESTRICTIONS
- Indenture, dated as of October 20, 1997, by and between the Credit
Parties and Bankers Trust Company, as trustee.
- Repurchase Agreements pursuant to which mortgage loans of a Credit
Party or a Subsidiary of a Credit Party are sold with the simultaneous
agreement to repurchase the mortgage loans at some point in the future
at the same price plus interest at an agreed upon rate; provided that
(i) the aggregate principal balance of such mortgage loans subject to a
repurchase agreement at any given time shall not exceed $500,000,000
and (ii) no agreed upon repurchase date shall be later than 90 business
days after the date of the applicable repurchase agreement.
81
EXHIBIT A
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the $750,000,000 Credit and Guarantee
Agreement, dated as of November 1, 1999 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among Block Financial
Corporation (the "Borrower"), H&R Block, Inc., the Lenders party thereto and The
Chase Manhattan Bank, as administrative agent for the Lenders (in such capacity,
the "Agent"). Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
The Assignor identified on Schedule l hereto (the "Assignor")
and the Assignee identified on Schedule l hereto (the "Assignee") agree as
follows:
1. The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as of
the Effective Date (as defined below), the interest described in Schedule 1
hereto (the "Assigned Interest") in and to the Assignor's rights and obligations
under the Credit Agreement with respect to those credit facilities contained in
the Credit Agreement as are set forth on Schedule 1 hereto (individually, an
"Assigned Facility"; collectively, the "Assigned Facilities"), in a principal
amount for each Assigned Facility as set forth on Schedule 1 hereto.
2. The Assignor (a) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or with
respect to the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim; (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Credit Party, any of their respective Subsidiaries or
any other obligor or the performance or observance by any Credit Party, any of
their Subsidiaries or any other obligor of any of their respective obligations
under the Credit Agreement or any other instrument or document furnished
pursuant hereto or thereto; and (c) attaches any promissory notes held by it
evidencing the Assigned Facilities and (i) requests that the Agent, upon request
by the Assignee, exchange the attached promissory notes for a new promissory
note or promissory notes payable to the Assignee and (ii) if the Assignor has
retained any interest in the Assigned Facility, requests that the Agent exchange
the attached promissory notes for a new promissory note or promissory notes
payable to the Assignor, in each case in amounts which reflect the assignment
being made hereby (and after giving effect to any other assignments which have
become effective on the Effective Date).
82
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements delivered pursuant to Section 3.4 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (c) agrees
that it will, independently and without reliance upon the Assignor, the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement or any other instrument or document
furnished pursuant hereto or thereto; (d) appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement or any other instrument or document
furnished pursuant hereto or thereto as are delegated to the Agent by the terms
thereof, together with such powers as are incidental thereto; and (e) agrees
that it will be bound by the provisions of the Credit Agreement and will perform
in accordance with its terms all the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender including, if it
is organized under the laws of a jurisdiction outside the United States, its
obligation pursuant to Section 2.14 of the Credit Agreement.
4. The effective date of this Assignment and Acceptance shall
be the Effective Date of Assignment described in Schedule 1 hereto (the
"Effective Date"). Following the execution of this Assignment and Acceptance, it
will be delivered to the Agent for acceptance by it and recording by the Agent
pursuant to the Credit Agreement, effective as of the Effective Date (which
shall not, unless otherwise agreed to by the Agent, be earlier than five
Business Days after the date of such acceptance and recording by the Agent).
5. Upon such acceptance and recording, from and after the
Effective Date, the Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignor for amounts which have accrued to the Effective Date and to the
Assignee for amounts which have accrued subsequent to the Effective Date. The
Assignor and the Assignee shall make all appropriate adjustments in payments by
the Agent for periods prior to the Effective Date or with respect to the making
of this assignment directly between themselves.
6. From and after the Effective Date, (a) the Assignee shall
be a party to the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and shall be bound by the provisions thereof and (b) the Assignor
shall, to the extent provided in this Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Credit Agreement.
7. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed as of the date first above written by
their respective duly authorized officers on Schedule 1 hereto.
83
Schedule 1
to Assignment and Acceptance
Name of Assignor:
-----------------------------
Name of Assignee:
-----------------------------
Effective Date of Assignment:
-----------------
Credit Principal
Facility Assigned Amount Assigned Commitment Percentage Assigned
Revolving Credit $ . %
--- ----------
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By: By:
----------------------- --------------------------
Title: Title:
-------------------- -----------------------
[Consented to and] Accepted: [Consented To:
THE CHASE MANHATTAN BANK, as BLOCK FINANCIAL CORPORATION
Administrative Agent
By: By:
----------------------- --------------------------
Title: Title:
-------------------- ----------------------
84
EXHIBIT B
[LETTERHEAD OF XXXXX XXXX LLP]
, 1999
The Chase Manhattan Bank,
as Administrative Agent
and
The Lenders Party to the Credit and Guarantee
Agreement Referenced Below
RE: CREDIT AND GUARANTEE AGREEMENT DATED AS OF NOVEMBER
1, 1999 AMONG BLOCK FINANCIAL CORPORATION, AS
BORROWER, H&R BLOCK, INC., AS GUARANTOR, THE LENDERS
PARTY THERETO AND THE CHASE MANHATTAN BANK, AS
ADMINISTRATIVE AGENT (THE "CREDIT AGREEMENT")
Ladies and Gentlemen:
We have acted as counsel to Block Financial Corporation, a
Delaware corporation (the "Borrower"), and H & R Block, Inc., a Missouri
corporation (the "Guarantor"), in connection with the above-referenced Credit
Agreement. The Borrower and the Guarantor are sometimes individually referred to
herein as a "Credit Party" and collectively referred to herein as the "Credit
Parties." This opinion is furnished to you pursuant to subsection 4.2(b) of the
Credit Agreement. Capitalized terms used herein without definition have the same
meanings as in the Credit Agreement. With your permission, for purposes of this
opinion, we have assumed that the Acquisition Documentation consists of those
documents specifically identified as such in the Officer's Certificates attached
hereto as Exhibits 1 and 2.
For purposes of this opinion, we have examined the following
documents:
(a) a copy of the Credit Agreement;
(b) a copy of the certificate delivered to the
Administrative Agent by each Credit Party pursuant to
Sections 4.2(c) and 4.2(d) of the Credit Agreement;
(c) the Officer's Certificates delivered to us by the
Credit Parties, copies of which are attached hereto
as Exhibits 1 and 2;
85
(d) a copy of the Certificate of Good Standing with
respect to the Borrower issued by the Secretary of
State of the State of Delaware dated , 1999;
(e) a copy of the Certificate of Good Standing with
respect to the Guarantor issued by the Secretary of
State of the State of Missouri dated ,
1999; and
(f) such other corporate records of the Credit Parties as
we have deemed necessary or appropriate to enable us
to render the opinions expressed below.
Whenever our opinion with respect to the existence or absence
of facts is indicated to be based on our knowledge or awareness, we are
referring solely to the actual knowledge of the particular Xxxxx Xxxx LLP
attorneys who have represented the Credit Parties in connection with the
transactions contemplated by the Credit Agreement and the Acquisition
Documentation. Except as expressly set forth herein, we have not undertaken any
independent investigation to determine the existence or absence of such facts
and no inference as to our knowledge concerning such facts should be drawn from
the fact that such representation has been undertaken by us.
In rendering this opinion, we have made and relied on the
following assumptions with your permission, and without independent
investigation: (i) the representations and warranties made in the Credit
Agreement and the Acquisition Documentation, and the other factual matters
contained in certificates and other documents examined by us, are true and
accurate; (ii) the signatures of individuals (other than individuals signing on
behalf of any Credit Party) signing all documents in connection with which this
opinion is rendered are genuine and authorized; (iii) all documents submitted to
us as copies, whether certified or not, conform to authentic original documents;
(iv) all parties (other than any Credit Party) to the documents reviewed by us
have full power and authority to execute, deliver and perform thereunder, and
all such documents have been duly authorized by all necessary corporate or other
actions on the part of such parties and others, have been duly executed by such
parties, have been duly delivered by such parties and, as to all such parties,
constitute legal, valid and binding obligations of such parties; (v) no consent,
approval, authorization, declaration or filing by or with any governmental
commission, board or agency is required for the valid execution and delivery by
the Administrative Agent or any Lender of the Credit Agreement or by any party
(other than any Credit Party) of the Acquisition Documentation; and (vi) there
are no agreements between any of the parties that would alter the agreements set
forth in the Credit Agreement or the Acquisition Documentation.
Based on the foregoing and in reliance thereon, and subject to
the limitations, qualifications and exceptions set forth below, we are of the
opinion that:
86
1. Each Credit Party is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has the full corporate power and corporate authority to own
and operate its material properties and to carry on its business as now
conducted.
2. Each Credit Party has the full corporate power and
corporate authority to execute, deliver and perform the Credit Agreement and the
Acquisition Documentation to which it is a signatory party.
3. The execution, delivery and performance by each Credit
Party of the Credit Agreement and the Acquisition Documentation to which it is a
signatory party (a) have been duly authorized by all necessary corporate action
on the part of such Credit Party, and (b) do not, in respect of the Credit
Parties or any of their respective Subsidiaries, require the approval or consent
of, authorization by, or registration, declaration or filing with, any
governmental authority, except for those which have been obtained and remain in
effect.
4. The Credit Agreement and the Acquisition Documentation have
been duly executed and delivered by each Credit Party that is a signatory party
thereto and constitute the legal, valid and binding obligations of such Credit
Party, enforceable in accordance with their respective terms.
5. The execution, delivery and performance by each Credit
Party of the Credit Agreement and the Acquisition Documentation to which it is a
signatory party will not: (a) contravene the terms of the Certificate or
Articles of Incorporation or bylaws of such Credit Party; (b) conflict with or
result in the breach of any material provision of or constitute a default (with
due notice or lapse of time, or both) under any material agreement to which such
Credit Party is a party or its properties are subject, or result in the creation
or imposition of any lien or encumbrance upon any of the property of any Credit
Party pursuant to the provisions of any such agreement or instrument; (c)
contravene, to our knowledge, any order, injunction, writ or decree of any court
or arbiter to which any Credit Party or its property is subject; or (d) violate
any law, treaty, rule or regulation, in each case applicable to or binding upon
any Credit Party or any of its property or to which any Credit Party or any of
its property is subject.
6. To our knowledge there are no actions, suits or proceedings
pending or threatened against any Credit Party in any court or before any
governmental authority which have a significant likelihood of materially and
adversely affecting either (i) the ability of such Credit Party to perform its
obligations under the Credit Agreement or the Acquisition Documentation to which
it is a signatory party or (ii) the financial condition or operations of the
Guarantor and its Subsidiaries taken as a whole.
7. The making of any Loan and the application of the proceeds
thereof as provided in the Credit Agreement will not violate Regulation T, U or
X of the Board of Governors of the Federal Reserve System.
87
8. Neither Credit Party is an "investment company" or a
company "controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
The opinions set forth above are subject to the following
qualifications:
a. Our opinions expressed herein are limited to the
laws of the State of Missouri, the laws of the State of New York,
the federal law of the United States, and the General Corporation
Law of the State of Delaware, and we do not express any opinion
concerning any other law nor do we purport to be experts in the
laws of any other states.
b. Our opinion above as to enforceability of the
Credit Agreement and the Acquisition Documentation is subject to
(i) the effect of any applicable bankruptcy, insolvency,
reorganization, receivership, moratorium or similar laws affecting
creditors' rights and remedies generally, and (ii) the effect of
general principles of equity including, without limitation,
concepts of materiality, reasonableness, good faith and fair
dealing, and the possible unavailability of specific performance,
injunctive relief or other equitable remedies (regardless of
whether considered in a proceeding in equity or at law).
c. We have not been requested to render, and with
your permission we do not express, any opinion as to the
applicability of Section 548 of the Bankruptcy Code, Article 10 of
the New York Debtor & Creditor Law or any other law relating to
fraudulent conveyances, transfers and obligations, or to
fraudulent transfers and conveyances generally, to the
transactions and documents referred to herein.
d. We express no opinion as to the enforceability of
(i) any provision relating to jurisdiction or service of process,
(ii) any forum selection or waiver of venue or waiver of jury
trial provisions, or (iii) any waiver or other provision contained
in the Credit Agreement or the Acquisition Documentation that is
against public policy.
e. While Missouri choice-of-law rules are not
entirely settled, we believe that a properly instructed state or
federal court sitting in the State of Missouri and applying
Missouri choice-of-law rules would likely find sufficient contacts
with New York in the transactions contemplated by the Credit
Agreement to honor the choice of New York law contained therein in
the absence of a determination that application of New York law
would violate the public policy of the State of Missouri. In this
regard, a Missouri court (or a court applying Missouri law) would
consider, among other things, the following facts, factors or
circumstances in analyzing such choice of law provisions: (i) the
place of contracting; (ii) the place of negotiation; (iii) the
place of performance (i.e., where repayment must be made); (iv)
the location of the subject matter of the contract; and (v) the
domicile or jurisdiction of incorporation and place of business of
the parties. For the purposes of this opinion we have assumed that
(x) the Administrative Agent maintains an office in the State of
New York and is qualified to do business in the State of New York
and that the Loans will be made in the State of New York, and (y)
the repayment of the Loans is made in the State of New York.
