1
Exhibit 10.23
L20,000,000
CREDIT AGREEMENT
Dated as of
July 10, 1996
Among
PM HOLDINGS, INC.,
as Borrower
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY,
as Guarantor
THE BANKS SIGNATORY HERETO,
FIRST NATIONAL BANK OF BOSTON,
as Administrative Agent
and
DEUTSCHE BANK AG LONDON,
as Documentation Agent
2
TABLE OF CONTENTS
PAGE
SECTION 1. REVOLVING CREDIT FACILITY............................................................................ 1
Section 1.1. The Loans........................................................................................ 1
Section 1.2. Minimum Borrowing Amounts........................................................................ 1
Section 1.3. Manner of Borrowing.............................................................................. 1
SECTION 2. INTEREST............................................................................................. 2
Section 2.1. Eurocurrency Loans............................................................................... 2
Section 2.2. Substitute Rate.................................................................................. 4
Section 2.3. Default Rate..................................................................................... 4
Section 2.4. Rate Determinations.............................................................................. 5
Section 2.5. Funding Indemnity................................................................................ 5
Section 2.6. Change of Law.................................................................................... 5
Section 2.7. Increased Cost and Reduced Return................................................................ 6
Section 2.8. Lending Offices.................................................................................. 6
Section 2.9. Discretion of Banks as to Manner of Funding...................................................... 6
Section 2.10. Exemptions from Withholding...................................................................... 7
SECTION 3. PROVISIONS APPLICABLE TO ALL LOANS................................................................... 8
Section 3.1. Maturity of Loans................................................................................ 8
Section 3.2. The Notes........................................................................................ 8
Section 3.3. Agent's Fee...................................................................................... 8
Section 3.4. Facility Fee..................................................................................... 9
Section 3.5. Terminations..................................................................................... 9
Section 3.6. Voluntary Prepayments............................................................................ 9
Section 3.7. Capital Adequacy................................................................................. 9
Section 3.8. Place and Application of Payments................................................................ 10
2
3
Section 3.9. Funding by Administrative Agent.................................................................. 10
SECTION 4. REPRESENTATIONS AND WARRANTIES....................................................................... 11
Section 4.1. Corporate Organization and Authority............................................................. 11
Section 4.2. Financial Statements............................................................................. 11
Section 4.3. Full Disclosure.................................................................................. 12
Section 4.4. Restrictions on Companies........................................................................ 12
Section 4.5. Pending Litigation............................................................................... 12
Section 4.6. Licenses and Franchises.......................................................................... 12
Section 4.7. Financing is Legal and Authorized................................................................ 12
Section 4.8. Agreement and Notes Valid and Binding............................................................ 13
Section 4.9. No Defaults...................................................................................... 13
Section 4.10. Governmental Consent............................................................................. 13
Section 4.11. Taxes............................................................................................ 13
Section 4.12. Not an Investment Company........................................................................ 14
Section 4.13. Use of Proceeds.................................................................................. 14
Section 4.14. ERISA............................................................................................ 14
Section 4.15. Compliance with Law.............................................................................. 14
Section 4.16. Pari Passu....................................................................................... 14
Section 4.17. Ratings.......................................................................................... 14
SECTION 5. CONDITIONS PRECEDENT................................................................................. 14
Section 5.1. Each Borrowing................................................................................... 14
Section 5.2. Initial Borrowing................................................................................ 15
SECTION 6. COVENANTS............................................................................................ 16
3
4
Section 6.1. Corporate Existence, Etc......................................................................... 16
Section 6.2. Insurance........................................................................................ 16
Section 6.3. Taxes, Compliance with Laws...................................................................... 16
Section 6.4. Maintenance of Properties........................................................................ 17
Section 6.5. Nature of Business............................................................................... 17
Section 6.6. Reports and Rights of Inspection................................................................. 17
Section 6.7. Limitation on Liens.............................................................................. 19
Section 6.8. Adjusted Capital to Assets....................................................................... 20
Section 6.9. Risk Based Capital Ratio......................................................................... 21
Section 6.10. Minimum Capital.................................................................................. 21
Section 6.11. 3 to 6 Rated Assets to Net Invested Assets....................................................... 21
Section 6.12. 5 to 6 Rated Bonds to Capital.................................................................... 21
Section 6.13. Real Estate Investments to Net Invested Assets................................................... 21
Section 6.14. Non-Performing Real Estate....................................................................... 21
Section 6.15. Total Debt to Adjusted Capital................................................................... 21
Section 6.16. ERISA Compliance................................................................................. 22
Section 6.17. Minimum Ratings.................................................................................. 22
Section 6.18. Mergers, Consolidations and Sales of Assets...................................................... 22
SECTION 7. GUARANTEE............................................................................................ 23
Section 7.1. Guarantee........................................................................................ 23
Section 7.2. Obligations Unconditional........................................................................ 23
Section 7.3. Reinstatement.................................................................................... 24
Section 7.4. Subrogation...................................................................................... 24
4
5
Section 7.5. Remedies......................................................................................... 24
Section 7.6. Continuing Guarantee............................................................................. 24
SECTION 8. EVENTS OF DEFAULT AND REMEDIES....................................................................... 25
Section 8.1. Events of Default................................................................................ 25
Section 8.2. Non-Bankruptcy Defaults.......................................................................... 26
Section 8.3. Bankruptcy Defaults.............................................................................. 26
SECTION 9. DEFINITIONS; INTERPRETATION OF AGREEMENT............................................................. 27
Section 9.1. Definitions...................................................................................... 27
Section 9.2. Accounting Principles............................................................................ 33
Section 9.3. Moody's Ratings and S&P Ratings.................................................................. 33
Section 9.4. Directly or Indirectly........................................................................... 34
SECTION 10. THE AGENTS........................................................................................... 34
Section 10.1. Appointment and Duties........................................................................... 34
Section 10.2. Sufficiency of the Agreement..................................................................... 34
Section 10.3. Independent Investigation........................................................................ 35
Section 10.4. Agents as Bank................................................................................... 35
Section 10.5. Indemnification of Agents........................................................................ 35
Section 10.6. Refusal to Act................................................................................... 35
Section 10.7. Successor Administrative Agent................................................................... 35
SECTION 11. MISCELLANEOUS........................................................................................ 36
Section 11.1. Waiver of Rights................................................................................. 36
Section 11.2. Non-Business Day................................................................................. 36
Section 11.3. Documentary Taxes................................................................................ 36
5
6
Section 11.4. Survival of Representations...................................................................... 36
Section 11.5. Survival of Indemnities.......................................................................... 36
Section 11.6. Set-off Sharing.................................................................................. 36
Section 11.7. Notices.......................................................................................... 37
Section 11.8. Counterparts..................................................................................... 37
Section 11.9. Successors and Assigns........................................................................... 37
Section 11.10. Participants..................................................................................... 37
Section 11.11. Assignment Agreements............................................................................ 38
Section 11.12. Costs and Expenses............................................................................... 38
Section 11.13. Amendments and Waivers........................................................................... 39
Section 11.14. Governing Law.................................................................................... 39
Section 11.15. Entire Agreement................................................................................. 39
Section 11.16. Headings and Severability........................................................................ 39
Section 11.17. Waiver of Jury Trial............................................................................. 39
Section 11.18. Judgment Currency................................................................................ 40
Section 11.19. Pounds Sterling/U.S. Dollar...................................................................... 40
Section 11.20. Change of Currency............................................................................... 40
Exhibit A - Promissory Note
Exhibit B - Borrowing Certificate
Exhibit C - Description of Closing Opinion of Counsel for the Company
Exhibit D - Certain Tax Assessments
Schedule I - Associated Costs Rate
Schedule II - Definition of the Floating Rate
6
7
CREDIT AGREEMENT
To each of the Banks which are or become parties hereto:
Ladies and Gentlemen:
The undersigned, PM Holdings, Inc., a Connecticut corporation (the
"Borrower"), applies to you for several commitments, subject to all of the terms
and conditions hereof and on the basis of the representations and warranties
hereinafter set forth to make a revolving credit facility available to the
Borrower guaranteed by Phoenix Home Life Mutual Insurance Company, a New York
mutual insurance company (the "Guarantor").
SECTION 1. REVOLVING CREDIT FACILITY.
Section 1.1. The Loans. Subject to and on the terms and conditions
hereof, each Bank, by its acceptance hereof, severally agrees to make a loan or
loans (individually a "Loan" and collectively the "Loans") to the Borrower from
time to time prior to the Termination Date on a revolving basis not at any time
exceeding in the aggregate the amount of its commitment as set forth on the
applicable signature page hereof or on an Assignment Agreement to which it is a
party, all as reduced from time to time pursuant to Section 3.5 hereof (its
"Commitment" and cumulatively for all the Banks the "Commitments"). The
aggregate principal amount of all Loans outstanding at any one time shall not
exceed the Commitments as then in effect. Each Borrowing of Loans shall be made
ratably from the Banks in proportion to the amounts of their Commitments. All
Borrowings will be made available by means of Eurocurrency Loans, which Loans
may be repaid and the principal amount thereof reborrowed through the
Termination Date, subject to all reductions in the Commitments permitted by
Section 3.5 hereof and all other terms and conditions hereof. The Borrower
promises to pay interest on each Loan made to it at the rates and times provided
in Section 2 hereof. All Loans will be made available, and all payments of
principal, interest and fees due hereunder will be payable, in Pounds Sterling.
Section 1.2. Minimum Borrowing Amounts. Each Borrowing of Loans
shall be in an amount not less than L1,000,000.
Section 1.3. Manner of Borrowing.
(a) Notice to the Administrative Agent. The Borrower shall give
telephonic, telex or telecopy notice to the Administrative Agent (which notice
shall be irrevocable once given and if by telephone shall be promptly confirmed
in writing) by no later than 10:00 A.M. (London time) on the date at least three
(3) Business Days prior to the date of each requested Borrowing. Each such
notice shall specify the date of the
7
8
requested Borrowing (which shall be a Business Day), the amount of the requested
Borrowing and the Interest Period applicable thereto. The Borrower agrees that
the Administrative Agent may rely on any such telephonic, telex or telegraphic
notice given by any person which it in good faith believes is an Authorized
Representative without the necessity of independent investigation and in the
event any notice by such means conflicts with the written confirmation, such
notice shall govern if the Administrative Agent has acted in reliance thereon.
(b) Notice to the Banks. The Administrative Agent shall give
telephonic, telex, telecopy or facsimile notice to each of the Banks of any
Borrowing request received pursuant to Section 1.3(a) hereof by the close of
business on the date the Administrative Agent received the Borrower's request,
the Administrative Agent shall give notice to the Borrower and each of the Banks
by like means of the interest rate applicable thereto, on the day the
Administrative Agent has made such determination.
(c) Failure to Notify. In the event the Borrower fails to give notice
pursuant to Section 1.3(a) hereof of the reborrowing of the principal amount of
any maturing Borrowing of Eurocurrency Loans and has not notified the
Administrative Agent by 10:00 A.M. (London time) on the day such Borrowing
matures that it intends to repay such Borrowing, such Borrowing shall
automatically begin to bear interest at the rate per annum equal to the sum of
the Floating Rate as of the last day of such Interest Period plus the Associated
Costs Rate plus the Applicable Eurocurrency Margin.
(d) Disbursement. On the date of any Borrowing, each Bank shall make
available its Loan in funds immediately available in London, England by
depositing the same with the Administrative Agent for remittance to an account
in London designated by the Borrower, except to the extent such Borrowing is a
reborrowing, in whole or in part, of the principal amount of a maturing
Borrowing of Eurocurrency Loans (a "Refunding Borrowing"), in which case each
Bank shall record the Loan made by it as a part of such Refunding Borrowing on
its books or records or on a schedule to the Note held by it, and shall effect
the repayment, in whole or in part, as appropriate, of its maturing Eurocurrency
Loan through the proceeds of such new Loan.
SECTION 2. INTEREST.
Section 2.1. Eurocurrency Loans. Each Eurocurrency Loan made by a
Bank shall bear interest (computed on the basis of a year of 365 days and actual
days elapsed) on the unpaid principal amount thereof from time to time
outstanding from the date of the Borrowing of such Loan until maturity (whether
by acceleration or otherwise) at a rate per annum equal to the sum of the
Applicable Eurocurrency Margin plus the Associated Costs Rate plus LIBOR,
payable on the last day of the applicable Interest Period and at maturity
(whether by acceleration or otherwise), and, if the applicable Interest Period
is longer than three months, on the date occurring three months after the
8
9
date of the Borrowing of such Loan. The interest rate applicable to a
Eurocurrency Loan shall be fixed during the Interest Period applicable to such
Loan except as expressly provided below with respect to adjustments for changes
in the Applicable Eurocurrency Margin applicable to such Loan.
"LIBOR" means, for an Interest Period for a Borrowing of Eurocurrency
Loans, (a) the LIBOR Index Rate for such Interest Period, if such rate is
available, and (b) if the LIBOR Index Rate cannot be determined, the average
rate of interest per annum (rounded upwards, if necessary, to the nearest one
hundred-thousandth of a percentage point) at which deposits in Pound Sterling,
as appropriate, in immediately available funds are offered to the Administrative
Agent at 11:00 a.m. (London, England time) on the first day of such Interest
Period by major banks in the interbank eurocurrency market for delivery on the
first day of and for a period equal to such Interest Period in an amount equal
or comparable to the principal amount of the Eurocurrency Loan scheduled to be
made by the Administrative Agent as part of such Borrowing.
"LIBOR Index Rate" means, for any Interest Period, the rate per annum
(rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point) for deposits in Pounds Sterling, as appropriate, for a period
equal to such Interest Period, which appears on the Telerate Page 3750, as of
11:00 a.m. (London, England time) on the first day of such Interest Period.
"Telerate Page 3750" means the display designated as "Page 3750", as
appropriate, on the Telerate Service (or such other page as may replace Page
3750 on that service or such other service as may be nominated by the British
Bankers' Association as the information vendor for the purpose of displaying
British Bankers' Association Interest Settlement Rates for Pound Sterling.
"Applicable Eurocurrency Margin" means the applicable rate per annum
specified below:
when:
GUARANTOR'S GUARANTOR'S APPLICABLE
S&P MOODY'S EUROCURRENCY
CATEGORY RATING IS RATING IS MARGIN SHALL BE
a. AA or Aa2 .17%
or higher or higher
b. AA- or Aa3 .22%
9
10
11
c. A+ or A1 .27%
d. A or A2 .32%
e. A- or A3 .37%
f. BBB or Baa1 .42%
or lower or lower
provided, however, that the foregoing is subject to the following:
(i) if the Guarantor's Xxxxx'x Rating and the Guarantor's S&P
Rating fall in different categories, then the Applicable Eurocurrency Margin
shall be that set forth above for the category in which the higher of the two
ratings falls unless the two categories in which such ratings fall are separated
by one or more intermediate categories in which event the Applicable
Eurocurrency Margin shall be the arithmetic average of the Applicable
Eurocurrency Margins for the two categories in which such ratings fall; and
(ii) changes in the Applicable Eurocurrency Margin resulting from a
change in the Guarantor's S&P Rating or the Guarantor's Xxxxx'x Rating shall
become effective on the date of the relevant change.
Section 2.2. Substitute Rate. (a) Notwithstanding any other
provision of this Agreement or any Note to the contrary, if prior to the
commencement of any Interest Period the Administrative Agent shall determine
that (i) by reason of circumstances affecting the London interbank market,
adequate and reasonable means do not exist for ascertaining LIBOR, or (ii) LIBOR
does not accurately reflect the cost to the Banks of making or continuing any
such Loan, or (iii) Pound Sterling deposits in the amount of any Loan scheduled
to be outstanding are not available to the Banks in the London interbank market,
then the Administrative Agent shall promptly give notice thereof to the
Borrower, and the affected Loans shall accrue interest thereon at the rate per
annum equal to the sum of the Floating Rate plus the Associated Costs Rate plus
the Applicable Eurocurrency Margin.
(b) Upon the Administrative Agent giving such notice, the Borrower
may elect to prepay any affected Loan on the last day of the then applicable
Interest Period. In the event the Borrower does not prepay such Loan, the
Borrower and the Banks shall negotiate in good faith for a maximum of thirty
(30) days in order to arrive at a mutually satisfactory method of computing the
interest rate applicable to the Loans hereunder to be substituted for the
interest rate specified in Section 2.1 hereof. If within such thirty (30) day
period the Borrower and the Banks (i) shall agree in writing upon a substituted
interest rate, such substituted interest rate shall be effective from the first
day of the relevant Interest Period for such Loan or (ii) shall not agree in
writing upon a
10
12
substituted interest rate, such affected Loan or Loans shall become immediately
due and payable together with any interest accrued thereon at the interest rate
specified in Section 2.2(a) hereof and any other amounts due and payable to the
Banks under this Agreement, at which time any obligations of the Banks to create
or continue such Loans shall, subject to Section 2.2(c) hereof, immediately
terminate.
(c) If the circumstances described in Section 2.2(a) hereof, giving
rise to a substitute rate, cease to exist, the obligations of the Banks to make
Eurodollar Loans shall continue and the Borrower may request that any Loans
thereafter accrue interest as determined under Section 2.1 hereof.
Section 2.3. Default Rate. If any payment of principal on any Loan
is not made when due (whether by acceleration or otherwise), such principal
shall bear interest (computed on the same basis as in effect thereon at the time
of such default) from the date such payment was due until paid in full, payable
on demand, at a rate per annum equal to the Applicable Eurocurrency Margin plus
the Associated Costs Rate plus the sum of two percent (2.0%) plus the rate of
interest per annum as determined by the Administrative Agent (rounded upwards,
if necessary, to the nearest whole multiple of 1/16th of 1%) that is equal to
the cost as computed by the Administrative Agent of maintaining such Loans from
Pound Sterling deposits of the Administrative Agent, provided that, if Pound
Sterling deposits are not available in the London interbank market, such rate
per annum shall be equal to two percent (2.0%) plus the sum of the Applicable
Eurocurrency Margin plus a rate per annum equal to the Administrative Agent's
cost of funds as reasonably determined by the Administrative Agent.
Section 2.4. Rate Determinations. The Administrative Agent shall
determine each interest rate applicable to the Loans hereunder in accordance
herewith, and its determination thereof shall be conclusive and binding except
in the case of manifest error or willful misconduct.
Section 2.5. Funding Indemnity. In the event any Bank shall incur
any loss, cost or expense (including, without limitation, any loss, cost or
expense incurred by reason of the liquidation or re-employment of deposits or
other funds acquired by such Bank to fund or maintain any Eurocurrency Loan or
the relending or reinvesting of such deposits or amounts paid or prepaid to such
Bank, and any loss of profit) as a result of:
(a) any payment or prepayment of a Eurocurrency Loan on a date
other than the last day of its Interest Period or its due date for any reason
and whether or not such payment is required to be made under this Agreement;
(b) any failure (because of a failure to meet the conditions of
Section 5 hereof or otherwise) by the Borrower to borrow a Eurocurrency Loan on
the date specified in a notice given pursuant to this Agreement; or
11
13
(c) any failure by the Borrower to make any payment of principal on
any Eurocurrency Loan when due (whether by acceleration or otherwise),
then, upon the demand of such Bank, the Borrower shall pay to such Bank
such amount as will reimburse such Bank for such loss, cost or expense. If any
Bank makes such a claim for compensation, it shall provide to the Borrower a
certificate executed by an officer of such Bank setting forth the amount of such
loss, cost or expense in reasonable detail (including an explanation of the
basis for and the computation of such loss, cost or expense) and such
certificate shall be deemed prima facie correct.
Section 2.6. Change of Law. (a) Notwithstanding any other
provisions of this Agreement or any Note, if at any time any change in
applicable law or regulation or in the interpretation thereof makes it unlawful
for any Bank to make or continue to maintain Eurocurrency Loans or to give
effect to its obligations to make Eurocurrency Loans as contemplated hereby,
such Bank shall promptly give notice thereof to the Borrower and the
Administrative Agent and such Bank's obligations to make or maintain
Eurocurrency Loans under this Agreement shall terminate until it is no longer
unlawful for such Bank to make or maintain Eurocurrency Loans. To the extent
required to comply with any such law as changed, the Borrower shall prepay on
demand the outstanding principal amount of any such affected Eurocurrency Loans,
together with all interest accrued thereon and all other amounts then due and
payable to such Bank under this Agreement.
(b) In the event Section 2.6(a) hereof comes into effect, the
Borrower and the Banks shall negotiate in good faith for a maximum of thirty
(30) days to determine whether alternative arrangements for making Loans to the
Borrower under this Agreement can be agreed. If within such thirty (30) day
period the Borrower and the Banks shall agree in writing upon such alternative
arrangements, the terms and conditions of the alternative arrangement shall be
incorporated into this Agreement with effect from the date of such written
agreement.
Section 2.7. Increased Cost and Reduced Return. If the adoption of
or any change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:
(a) shall subject any Bank (or its Lending Office) to any tax, duty
or other charge with respect to its Eurocurrency Loans, its Notes or its
obligation to make Eurocurrency Loans, or shall change the basis of taxation of
payment to any Bank (or its Lending Office) of the principal of or interest on
its Eurocurrency Loans or any other amounts due under this Agreement in respect
of its Eurocurrency Loans or its obligation
12
14
to make Eurocurrency Loans (except for changes involving the imposition or
increase of a tax on the overall net income or gross receipts of such Bank or
its Lending Office and imposed by the jurisdiction or any political subdivision
or taxing authority thereof, in which such Bank's principal executive office or
its Lending Office is located); or
(b) shall impose, modify or deem applicable any reserve, special
deposit or similar requirements (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System),
against assets of, deposits with or for the account of, or credit extended by,
any Bank (or its Lending Office) or shall impose on any Bank (or its Lending
Office) or on the United States market for certificates of deposit or the
offshore interbank market any other condition affecting its Eurocurrency Loans,
its Notes or its obligation to make Eurocurrency Loans;
and the result of any of the foregoing is to increase the cost to such
Bank (or its Lending Office) of making or maintaining any Eurocurrency Loan, or
to reduce the amount of any sum received or receivable by such Bank (or its
Lending Office) under this Agreement or under its Note with respect thereto,
then, within fifteen (15) days after demand by such Bank (with a copy to the
Administrative Agent), the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank for such increased cost or
reduction. A certificate of any Bank claiming compensation under this Section
2.7 and setting forth the additional amount or amounts to be paid to it
hereunder shall be prima facie correct. In determining such amount, such Bank
may use any reasonable averaging and attribution methods.
Section 2.8. Lending Offices. Each Bank may, at its option, elect
to make its Loans hereunder at the branch, office or affiliate specified on the
appropriate signature page hereof (each a "Lending Office") for each type of
Loan available hereunder or at such other of its branches, offices or affiliates
as it may from time to time elect and designate in a notice to the Borrowers and
the Administrative Agent (but such funds shall in any event be made available to
the Borrower at the office of the Administrative Agent as herein provided for).
Section 2.9. Discretion of Banks as to Manner of Funding.
Notwithstanding any other provision of this Agreement, each Bank shall be
entitled to fund and maintain its funding of all or any part of its Loans in any
manner it sees fit, it being understood, however, that for the purposes of this
Agreement all determinations under this Agreement shall be made as if each Bank
had actually funded and maintained each Eurocurrency Loan through the purchase
of deposits in the relevant market having a maturity corresponding to such
Loan's Interest Period and bearing an interest rate equal to LIBOR for such
Interest Period.
Section 2.10. Exemptions from Withholding. (a) Payments Free of
Withholding. Except as otherwise required by law and subject to Section 2.10(b)
hereof,
13
15
each payment by the Companies under this Agreement and under any Note shall be
made without withholding for or on account of any present or future taxes (other
than overall net income taxes on the recipient) imposed by or within the
jurisdiction in which either of the Companies is domiciled, any jurisdiction
from which either of the Companies makes any payment, or (in each case) any
political subdivision or taxing authority thereof or therein. If any such
withholding is so required, the Companies shall make the withholding, pay the
amount withheld to the appropriate governmental authority before penalties
attach thereto or interest accrues thereon and forthwith pay such additional
amount as may be necessary to ensure that the net amount actually received by
each Bank and the Administrative Agent free and clear of such taxes (including
such taxes on such additional amount) is equal to the amount which that Bank or
the Administrative Agent (as the case may be) would have received had such
withholding not been made. If the Administrative Agent or any Bank pays any
amount in respect of any such taxes, penalties or interest, the Borrower or the
Guarantor, as the case may be, shall reimburse the Administrative Agent or such
Bank for that payment on demand in the currency in which such payment was made.
If either of the Companies pays any such taxes, penalties or interest, it shall
deliver official tax receipts evidencing that payment or certified copies
thereof to the Bank or Administrative Agent on whose account such withholding
was made (with a copy to the Administrative Agent if not the recipient of the
original) on or before the thirtieth day after payment.
(b) U.S. Withholding Tax Exemptions. Each Bank that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) shall
submit to the Borrower, the Guarantor and the Administrative Agent duly
completed and signed copies of either Form 1001 (relating to such Bank and
entitling it to a complete exemption from withholding on all amounts to be
received by such Bank, including fees, pursuant to this Agreement and its Loans)
or Form 4224 (in duplicate) (relating to all amounts to be received by such
Bank, including fees, pursuant to this Agreement and its Loans) of the United
States Internal Revenue Service. Thereafter and from time to time, each such
Bank shall submit such additional duly completed and signed copies of one or the
other of such forms (or such successor forms as shall be adopted from time to
time by the relevant United States taxing authorities) and duly updated forms as
the Borrower, the Guarantor or the Administrative Agent may notify such Bank are
required under then-current United States law or regulations to avoid United
States withholding taxes on payments in respect of all amounts to be received by
such Bank, including fees, pursuant to this Agreement or the Loans.
(c) Inability of Bank to Submit Forms. If any Bank determines, as a
result of any change in applicable law, regulation or treaty, or in any official
application or interpretation thereof, that it is unable to submit any form or
certificate that such Bank is obligated to submit pursuant to subsection (a) of
this Section 2.10 or that such Bank is required to withdraw or cancel any such
form or certificate previously submitted or any such form or certificate
otherwise becomes ineffective or inaccurate, such Bank shall
14
16
promptly notify the Borrower, the Guarantor and the Administrative Agent of such
fact and such Bank shall to that extent not be obligated to provide any such
form or certificate and will be entitled to withdraw or cancel any affected form
or certificate, as applicable. In the event any Bank so notifies the Borrower,
the Guarantor and the Administrative Agent, such Bank agrees that it will at any
time thereafter at the request of the Borrower assign its Note and rights and
obligations hereunder to another lender designated by the Borrower and approved
by the Administrative Agent (which approval will not be unreasonably withheld)
under and pursuant to Section 11.11 hereof (except that the L2,000,000
assignment minimum shall not apply) upon payment to it of the amount of
principal and accrued and unpaid interest and fees owing it as of the date such
assignment becomes effective and any amount which would be due it hereunder had
its Eurocurrency Loans been prepaid rather than assigned.
SECTION 3. PROVISIONS APPLICABLE TO ALL LOANS.
Section 3.1. Maturity of Loans. Each Eurocurrency Loan shall mature
and become due and payable on the last day of the Interest Period applicable
thereto, provided that, subject to the terms and conditions of this Agreement,
such Eurocurrency Loan may be refunded through a Refunding Borrowing.
Section 3.2. The Notes. (a) All Loans made to the Borrower by a
Bank shall be evidenced by a promissory note of the Borrower in the form of
Exhibit A hereto (individually a "Note" and collectively the "Notes"), each such
Note to be dated the date hereof, payable to the order of the applicable Bank in
the principal amount of its Commitment and otherwise in the form of Exhibit A
hereto. A Bank may request that separate Notes be issued to each of its Lending
Offices but all such offices shall be treated as one "Bank" hereunder and all
Notes issued to Lending Offices of any one Bank shall expressly state that they
may not collectively be enforced for a principal amount in excess of such Bank's
Loans hereunder.
(b) Each Bank shall record on its books and records or on a schedule
to its Note the amount of each Loan made by it, the Interest Period and/or
maturity date thereof, all payments of principal and interest and the principal
balance from time to time outstanding thereon, the type of such Loan and, in
respect of any Eurocurrency Loan, the interest rate applicable thereto; provided
that prior to the transfer of any Note such information relating to any
outstanding Loans made by such Bank shall be recorded on the back of such Note
or on a schedule to such Note. The record thereof, whether shown on such books
and records of a Bank or on a schedule to any Note, shall be prima facie
evidence as to all such matters; provided, however, that the failure of any Bank
to record any of the foregoing or any error in any such record shall not limit
or otherwise affect the obligation of each Borrower hereunder or under any Note.
15
17
Section 3.3. Agent's Fee. The Borrower shall pay to the
Administrative Agent in U.S. Dollars for its own use and benefit such agency and
other fees as the Borrower and the Administrative Agent may mutually agree.
Section 3.4. Facility Fee. For the period from the date hereof to
and including the Termination Date, the Borrower shall pay to the Administrative
Agent for the ratable account of the Banks a facility fee at the Applicable
Facility Fee Rate (computed on the basis of a year of 365 days, for the actual
number of days elapsed) on the average daily amount of the Commitments in effect
under this Agreement from time to time (whether or not in use), such fee to be
payable in arrears on the last Business Day of each March, June, September and
December thereafter to and including, and on, the Termination Date provided that
if the Commitments terminate in whole or in part prior to the Termination Date
any accrued and unpaid facility fee on the amount of the Commitments so
terminated shall be paid on the date of such termination.
The term "Applicable Facility Fee Rate" shall mean .08%.
Section 3.5. Terminations. The Borrower shall have the privilege at
any time and from time to time upon five (5) Business Days' prior notice to the
Agents (which shall promptly notify the Banks) to ratably terminate the
Commitments in whole or in part (but if in part then in a minimum amount of
L2,000,000 or an integral multiple thereof) and on the date of termination and
as a condition thereto the Borrower shall pay to the Administrative Agent for
the account of the Banks (i) any amount due under the first paragraph of Section
3.4 hereof in respect of such termination and (ii) the amount necessary to
reduce the unpaid principal balance of the Notes to the amount of the
Commitments as so reduced, together with interest thereon if such amount prepays
the Notes in full or prepays a Eurocurrency Loan and with any amount due the
Banks under Section 2.5 hereof. No termination of the Commitments may be
reinstated.
Section 3.6. Voluntary Prepayments. The Borrower shall have the
privilege of prepaying the Notes in whole or in part (but if in part then in an
aggregate minimum amount for all Banks of L1,000,000) at any time upon one
Business Day's prior notice to the Administrative Agent (such notices, if
received subsequent to 10:00 A.M. London time on a given day, to be treated as
though received at the opening of business on the next Business Day), which
shall promptly so notify the Banks, by paying to the Administrative Agent for
the account of the Banks the principal amount to be prepaid and (i) if such
prepayment prepays the Notes in full, accrued interest thereon to the date fixed
for prepayment and (ii) any amount due the Banks under Section 2.5 hereof.
Section 3.7. Capital Adequacy. If any Bank shall determine that any
applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration
16
18
thereof or compliance by such Bank (or its Lending Office) with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Bank's capital as a consequence of
its Commitment or other obligations hereunder or credit extended by it hereunder
to a level below that which such Bank could have achieved but for such adoption,
change or compliance (taking into consideration such Bank's policies with
respect to capital adequacy), then from time to time as specified by such Bank
the Borrower shall pay to such Bank, such additional amount or amounts as will
compensate such Bank for such reduction. A certificate of any Bank claiming
compensation under this Section 3.6 and setting forth the additional amount or
amounts to be paid to it hereunder shall be prima facie evidence thereof. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods.
Section 3.8. Place and Application of Payments. All payments of
principal of and interest on the Loans and all payments of facility fees and all
other amounts payable under this Agreement shall be made to the Administrative
Agent by no later than 12:00 noon (London time) at the principal office of the
Administrative Agent in London (or such other location as the Administrative
Agent may designate to the Borrower) for the benefit of the Banks. All such
payments shall be made in Pounds Sterling, in immediately available funds at the
place of payment, without setoff or counterclaim and without reduction for, and
free from, any and all present or future taxes, levies, imposts, duties, fees,
charges, deductions, withholdings, restrictions or conditions of any nature
imposed by any government or any political subdivision or taxing authority
thereof (other than taxes on the overall income or gross receipts of any Bank or
its Lending Office and imposed by the jurisdiction or any political subdivision
or taxing authority thereof, in which such Bank's principal executive office or
its Lending Office is located). The Administrative Agent will on the day such
funds are received, subject to unavoidable delays, cause to be distributed like
funds relating to the payment of principal or interest (ratably in accordance
with the respective amount of principal and interest then due and owing each
Bank) or fees (ratably in accordance with the amount owing each) to the Banks,
and like funds relating to the payment of any other amount payable to any Bank
to such Bank, in each case to be applied in accordance with the terms of this
Agreement. Unless the Borrower otherwise directs, principal repayments shall be
applied to the Eurocurrency Loans in the order of their maturity. Unless the
Administrative Agent shall have been notified by the Borrower prior to the date
a payment of principal or interest is due hereunder that the Borrower does not
intend to make such payment (the right of the Borrower to give such a notice to
be to only avoid the application of this sentence and to not in any manner imply
that the Borrower has a right not to make a payment of principal or interest as
and when the same becomes due) the Administrative Agent may assume that the
Borrower has made such payment available to the Administrative Agent on such
date and the Administrative Agent may in reliance upon such assumption
distribute an amount equal to the amount of such payment to the Banks.
17
19
If such payment is not in fact made available to the Administrative Agent by the
Borrower and the Administrative Agent has made the amount of such payment
available to the Banks, each Bank shall promptly upon demand of the
Administrative Agent return the amount of the payment so remitted to it to the
Administrative Agent together with interest thereon in respect of each day
during the period commencing on the date such amount was paid to such Bank and
ending on but excluding the date the Administrative Agent recovers such amount
from such Bank at a rate per annum equal to the effective cost as computed by
the Administrative Agent of maintaining such loans from Pounds Sterling deposits
of the Administrative Agent.
Section 3.9. Funding by Administrative Agent. Unless the
Administrative Agent shall have been notified by a Bank prior to noon (London
time) on the date a Borrowing is to be made that such Bank does not intend to
make its Loan as part of such Borrowing available to the Administrative Agent
(which notice a Bank shall not be entitled to give unless a condition precedent
to lending has not been satisfied or waived), the Administrative Agent may
assume that such Bank has made such Loan available to the Administrative Agent
on such date and the Administrative Agent may in reliance upon such assumption
make available to the Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative Agent by such Bank
and the Administrative Agent has made such amount available to the Borrower, the
Administrative Agent shall be entitled to receive such amount from such Bank
forthwith upon its demand, together with interest thereon in respect of each day
during the period commencing on the date such amount was made available to the
Borrower and ending on but excluding the date the Administrative Agent recovers
such amount at a rate per annum equal to the effective cost as computed by the
Administrative Agent of maintaining such loans from Pounds Sterling deposits of
the Administrative Agent. If such Bank has not made such funds available within
one Business Day of the Administrative Agent's demand therefor, the Borrower
shall, promptly upon demand of the Administrative Agent, return such funds to it
together with interest thereon at the same daily rate per annum specified in the
immediately preceding sentence.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
The Companies represent and warrant to each of the Banks as follows:
Section 4.1. Corporate Organization and Authority. The Guarantor
and each Primary Subsidiary,
(a) is a corporation duly organized, validly existing and in good
standing under the laws of the state of its organization identified herein;
18
20
(b) has all requisite power and authority and all licenses and
permits necessary in any respect material to it taken as a whole to own and
operate its material properties and to carry on its business as now conducted;
and
(c) is duly licensed or qualified and is in good standing as a
foreign corporation in each jurisdiction in which the nature of the business
transacted by it or the nature of the property owned or leased by it makes such
licensing or qualification necessary if the failure to be so licensed or
qualified would materially and adversely affect its business, properties or
operations.
Section 4.2. Financial Statements. (a) The consolidated balance
sheet of the Guarantor and the Borrower as at December 31, 1995, and the related
statements of income and cash flow for the fiscal year ending on such date
reported on by Price Waterhouse and the interim balance sheet of the Guarantor
and interim consolidated balance sheet of the Borrower and its Subsidiaries each
as at March 31, 1996 and the related statements of income and cash flow, in the
case of the Guarantor only, for the three-month period ended on such date as
prepared by the Guarantor and the Borrower (copies of which have been furnished
to the Banks), have been prepared in accordance with AAP consistently applied
and present fairly in accordance with AAP the financial condition of the
Guarantor and of the Borrower and its Subsidiaries as of such dates and the
results of operations and changes in the financial position for such fiscal
periods.
(b) Since March 31, 1996, there has been no material adverse change
in the financial condition or business of the Guarantor and the Borrower taken
as a whole, from the most recent above-described balance sheets as of such date.
Section 4.3. Full Disclosure. The financial statements referred to
in Section 4.2 hereof do not, nor do the written statements, if any, furnished
by the Guarantor or the Borrower to any Bank in connection with the negotiation
of or its participation in this Agreement, taken as a whole, contain any untrue
statement of a material fact or omit a material fact necessary to make the
material statements contained therein not misleading except as corrected in
subsequent written statements furnished the Banks, the Banks acknowledging that
as to any projections furnished to any Bank, the Companies represent only that
such projections were made on the basis of assumptions the Companies believe to
be reasonable.
Section 4.4. Restrictions on Companies. The Companies are not a
party to or bound by any note, contract, indenture, agreement, instrument, order
of any court or governmental agency, law or rule or regulation which (i)
restricts or limits in any material respect the right or ability of the
Companies or either of them to incur the indebtedness, obligations and
liabilities contemplated herein or (ii) which would render any of the Companies'
obligations hereunder or under the Notes void or unenforceable.
19
21
Section 4.5. Pending Litigation. There are no proceedings pending
or, to the knowledge of the Companies or either of them, threatened against the
Guarantor or its Primary Subsidiaries in any court or before any governmental
authority or arbitration board or tribunal in which, either individually or in
the aggregate, there is a reasonable possibility of an adverse decision which
could result in any material adverse change in the properties, business, profits
or financial condition of the Guarantor and its Primary Subsidiaries or could
result in the Companies' obligations under this Agreement or the Notes being
declared invalid or unenforceable. The Guarantor and its Primary Subsidiaries
are not in default with respect to any order of any court or governmental
authority or arbitration board or tribunal.
Section 4.6. Licenses and Franchises. The Guarantor and its Primary
Subsidiaries own or possess all patents, trademarks, trade names, service marks,
copyrights, licenses, franchises and rights necessary and material to them for
the conduct of their business, without any known conflict by, or with the rights
of, others.
Section 4.7. Financing is Legal and Authorized. The execution and
delivery of this Agreement, the Borrowings hereunder, the issuance of the Notes
in evidence thereof and compliance by the Companies with all of the provisions
hereof and of the Notes:
(a) are within the corporate powers of the Companies and have been
duly authorized by proper corporate action on the part of the Companies; and
(b) will not (i) violate any provisions of any law or any order of
any court or governmental authority or agency and will not conflict with or
result in any breach of any of the terms, conditions or provisions of, or
constitute a default under, the Articles of Incorporation or By-laws of the
Companies or any indenture or other agreement or instrument to which the
Guarantor or any Primary Subsidiary is a party or by which it may be bound if
the violation, conflict or default in question (aa) could reasonably be expected
to have or does have a material adverse effect on the financial condition or
business of the Guarantor or the Primary Subsidiaries or on the ability of the
Companies to perform their obligations hereunder and under the Notes or (ab)
would render any of the Companies' obligations hereunder or under the Notes void
or unenforceable or (ii) result in the imposition of any Liens on any property
of the Guarantor or any Primary Subsidiary not permitted hereby.
Section 4.8. Agreement and Notes Valid and Binding. This Agreement
and the Notes each constitute the legal, valid and binding contract and
agreement of the Companies party thereto enforceable in accordance with their
respective terms except as such terms may be limited by bankruptcy, insolvency
or similar laws and legal and equitable principles affecting or limiting the
enforcement of creditor's rights generally.
20
22
Section 4.9. No Defaults. No Default or Event of Default has
occurred and is continuing.
Section 4.10. Governmental Consent. No approval, authorization,
consent or withholding of objection on the part of any regulatory body, state,
federal or local, is necessary in connection with the execution and delivery by
the Companies of this Agreement, the issuance of the Notes by the Borrower, any
Borrowing hereunder, compliance by the Companies with any of the provisions of
this Agreement or the Notes or for the validity or enforceability of this
Agreement or the Notes except for any of such which have been obtained and are
in full force and effect.
Section 4.11. Taxes. All tax returns required to be filed by the
Guarantor and the Primary Subsidiaries in any jurisdiction have, in fact, been
filed, except where the failure to file such returns would not have a material
adverse effect on the Guarantor and the Primary Subsidiaries as a whole or on
either Companies' ability to perform its obligations hereunder and under the
Notes, and all taxes, assessments, fees and other governmental charges upon the
Guarantor and the Primary Subsidiaries or upon any of their properties, income
or franchises which are shown to be due and payable in such filed returns have
been paid. For all taxable years ending on or before December 31, 1990, the
Federal income tax liability of the Guarantor and the Primary Subsidiaries has
been satisfied and either the period of limitations on assessment of additional
Federal income tax has expired or the Guarantor or affected Primary Subsidiary
has entered into an agreement with the Internal Revenue Service closing
conclusively the total tax liability for the taxable year. Except as disclosed
on Exhibit D hereto, the Companies do not know of any proposed additional tax
assessment against either of them or a Primary Subsidiary for which adequate
provision has not been made in its accounts in accordance with AAP, and no
material controversy in respect of additional Federal or state taxes is pending
or to the knowledge of either of the Companies threatened. The provisions for
taxes on the books of the Guarantor and the Primary Subsidiaries are adequate in
all material respects for all open years, and for its current fiscal year.
Section 4.12. Not an Investment Company. Neither of the Companies
is an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
Section 4.13. Use of Proceeds. The proceeds of the Loans will be
used for general corporate purposes. None of the proceeds of the Loans will be
used, directly or indirectly for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any "margin stock," within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System. The
Borrower is not engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying any
margin stock within the meaning of such Regulation U.
21
23
Section 4.14. ERISA. No "employee pension benefit plans," as defined
in ERISA ("Plans" and individually a "Plan"), maintained by the Guarantor or any
Primary Subsidiary or any Person which is under common control with the
Guarantor or any Primary Subsidiary within the meaning of Section 4001(b) of
ERISA, nor any trusts created thereunder, have incurred any "accumulated funding
deficiency" as defined in Section 302 of ERISA nor does the present value of all
benefits vested under all Plans exceed the value of the assets of the Plans
allocable to such vested benefits, in either case in any respect material to the
Guarantor and the Primary Subsidiaries.
Section 4.15. Compliance with Law. The Guarantor and the Primary
Subsidiaries are not (i) in default under any order, writ, injunction or decree
of any court of competent jurisdiction or (ii) in default under any law,
ordinance, order, regulation, license or demand of any federal, state, municipal
or other governmental agency, which default may, in each case, reasonably be
expected to have consequences which would materially and adversely affect the
business or properties of the Guarantor and the Primary Subsidiaries taken as a
whole.
Section 4.16. Pari Passu. All the payment obligations of the
Companies arising under or pursuant to this Agreement and the Notes will at all
times rank pari passu with or senior to all other unsecured and unsubordinated
obligations of the Companies and will be accounted for as an unsubordinated
liability.
Section 4.17. Ratings. As of the date hereof the Guarantor has a
Xxxxx'x Rating of not less than Aa3 and an S&P Rating of not less than AA-.
SECTION 5. CONDITIONS PRECEDENT.
Section 5.1. Each Borrowing. The obligation of the Banks to make
any Loan hereunder shall be subject to the following conditions precedent:
(a) the Administrative Agent shall have received the notice
required hereunder;
(b) each of the representations and warranties set forth in Section
4 hereof shall be and remain true and correct as of said time except to the
extent such a representation or warranty relates solely to an earlier date and
except that the representations and warranties made in the first sentence of
Section 4.2(a) hereof shall be deemed to refer to the most recent quarterly or
annual report, respectively, furnished to the Banks pursuant to Section 6.6
hereof;
(c) no Default or Event of Default shall have occurred and be
continuing or will occur as a result of making such Loan; and
22
24
(d) after giving effect to the proposed Borrowing and to the
application of the proceeds thereof the aggregate amount of indebtedness
guaranteed by the Guarantor or borrowed by the Borrower will not exceed the
maximum approved amount thereof.
Each notice requesting that a Loan be made shall be and constitute a
warranty as to the matters specified in subsections (b), (c) and (d) above, but
prior to funding, the Borrower shall confirm the foregoing by delivering a
certificate to the Administrative Agent in the form annexed hereto as Exhibit B)
signed by an Authorized Representative, it being agreed that such certificate
may be delivered by facsimile communication, with the original delivered by the
close of business on the Business Day following the date of funding.
Section 5.2. Initial Borrowing. Prior to or concurrently with the
initial Borrowing hereunder:
(a) the Administrative Agent shall have received an opinion of Xxxx
Xxxxxxx, Esquire, counsel to the Companies covering the matters set forth on
Exhibit C hereto;
(b) the Administrative Agent shall have received for each Bank a
Note of the Borrower in the amount of such Bank's Commitment, properly signed
and completed;
(c) the Administrative Agent shall have received copies (executed
or certified as may be appropriate) of all legal documents or proceedings taken
by the Companies in connection with the execution and delivery of this Agreement
and the Notes to the extent the Banks or their counsel may reasonably request,
together with a certificate of the secretary or an assistant secretary of the
Companies attesting to the incumbency and specimen signatures of the officers of
the Companies executing this Agreement and the Notes and authorized to act
hereunder;
(d) the Administrative Agent shall have received a copy of the
charter and by-laws of the Companies;
(e) legal matters incident to the execution and delivery of this
Agreement and the Notes shall be reasonably satisfactory to the Banks and their
counsel;
(f) the Administrative Agent shall have received for the account of
the Agents such fees as the Borrower shall have agreed to pay the Agents; and
(g) as of the date all of the other conditions precedent to
effectiveness, all of the representations and warranties of the Companies and
each of them contained herein shall be true and correct and no Default or Event
of Default shall have occurred
23
25
and be continuing and the Administrative Agent shall have received a certificate
of the Companies to the foregoing effects.
SECTION 6. COVENANTS.
The Companies agree that, so long as any Note is outstanding hereunder
or any credit is available to or in use by the Borrower hereunder, except to the
extent compliance in any case or cases is waived in writing by the Required
Banks:
Section 6.1. Corporate Existence, Etc. The Companies will, and
(subject to Section 6.18 hereof) the Guarantor will cause each Primary
Subsidiary to, preserve and keep in force and effect its corporate existence and
all material franchises, licenses and permits necessary to the proper conduct of
its business; provided, however, that the Companies and the Primary Subsidiaries
shall not be required to preserve any such franchise, license or permit if the
applicable Company or such Primary Subsidiary shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Companies and the Primary Subsidiaries taken as a whole.
Section 6.2. Insurance. The Companies will, and the Guarantor will
cause the Primary Subsidiaries to, maintain insurance coverage by financially
sound and reputable insurers in such forms and amounts, with such deductibles
and against such risks, as are customary for business entities of established
reputation engaged in the same or a similar business and owning and operating
similar properties.
Section 6.3. Taxes, Compliance with Laws. (a) The Companies will,
and the Guarantor will cause the Primary Subsidiaries to, promptly pay and
discharge all lawful taxes, assessments and governmental charges or levies
imposed upon it or upon or in respect of all or any part of its property or
business; provided the Companies and the Primary Subsidiaries shall not be
required to pay any such tax, assessment, charge, levy or claim if (i) the
validity, applicability or amount thereof is being contested in good faith by
appropriate actions or proceedings and either (aa) such proceedings will prevent
the forfeiture or sale of any property of the Companies and the Primary
Subsidiaries or any material interference with the use thereof by the Companies
and the Primary Subsidiaries or any material interference with the conduct of
the business of the Companies and the Primary Subsidiaries or (ab) no such
forfeiture, sale or interference has occurred or is reasonably likely to occur
and (ii) the applicable Company or the applicable Primary Subsidiary shall have
set aside on its books reserves deemed by the applicable Company or applicable
Primary Subsidiary in its reasonable business judgment to be adequate with
respect thereto or such greater amount as may be required by AAP.
(b) The Companies will, and the Guarantor will cause the Primary
Subsidiaries to, comply, in all material respects, with all laws, ordinances and
governmental rules and regulations to which it is subject, the violation of
which would
24
26
materially and adversely affect the properties, business, profits or financial
condition of the Companies and the Primary Subsidiaries taken as a whole.
Section 6.4. Maintenance of Properties. The Companies will
maintain, preserve and keep, and the Guarantor will cause each Primary
Subsidiary to maintain, preserve and keep, its properties which are necessary to
it for the conduct of its business in good repair and working order (ordinary
wear and tear excepted) and from time to time will make all necessary repairs,
replacements, renewals and additions so that at all times the efficiency thereof
shall be maintained.
Section 6.5. Nature of Business. The Companies will not, and the
Guarantor will not permit any Primary Subsidiary to, engage in any business or
activity if, as a result, the general nature of the business which would then be
engaged in by the Guarantor and the Primary Subsidiaries would be substantially
changed from the general nature of the business engaged in by the Guarantor and
the Primary Subsidiaries on the date of this Agreement.
Section 6.6. Reports and Rights of Inspection. The Companies will,
and the Guarantor will cause the Primary Subsidiaries to, keep proper books of
record and account in which full and correct entries will be made of all
dealings or transactions of or in relation to the business and affairs of the
Companies and the Primary Subsidiaries in accordance with AAP and will furnish
to the Banks:
(a) Quarterly Statements. As soon as available and in any event
within 90 days after the end of each quarterly fiscal period of each fiscal
year, copies of:
(1) balance sheets of the Guarantor and of the Borrower and its
Subsidiaries as of the close of such quarterly period, and
(2) statements of income and cash flows of the Guarantor and
statements of income of the Borrower and its Subsidiaries for such quarterly
period and for the portion of the fiscal year then ended,
in each case setting forth in comparative form the figures for or as of
the end of (as appropriate) the corresponding period in the preceding fiscal
year, all in reasonable detail and certified as presenting fairly in accordance
with AAP the financial condition of the Guarantor and of the Borrower and its
Subsidiaries as of the end of such period and the results of operations for such
period by an Authorized Representative;
(b) Annual Statements of the Guarantor. As soon as available and in
any event within 90 days after the close of each fiscal year of the Guarantor,
copies of:
(1) a balance sheet of the Guarantor as of the close of such fiscal
year, and
25
27
(2) statements of income and cash flows of the Guarantor for such
fiscal year,
in each case setting forth in comparative form the figures for or as of
the end of (as appropriate) the preceding fiscal year and prepared in accordance
with AAP, all in reasonable detail and accompanied by an opinion thereon of
Price Waterhouse or another firm of independent public accountants of recognized
national standing, selected by the Guarantor (the "Auditors") and reasonably
acceptable to the Administrative Agent, to the effect that the financial
statements have been prepared in accordance with AAP (except for changes in
application in which such accountants concur) and present fairly in all material
respects in accordance with AAP the financial condition of the Guarantor as of
the end of such fiscal year and the results of its operations for the fiscal
year then ended and that the examination of such accountants in connection with
such financial statements has been made in accordance with generally accepted
auditing standards and, accordingly, included such tests of the accounting
records and such other auditing procedures as were considered necessary in the
circumstances;
(c) Annual Statements of the Borrower. As soon as available and in
any event within 120 days after the end of each fiscal year of the Borrower,
consolidated and consolidating statements of operations, stockholder's equity
and cash flow of the Borrower and its Subsidiaries for such fiscal year and the
related consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as at the end of such fiscal year, setting forth in each case in
comparative form the corresponding consolidated and consolidating figures for or
as of the end of (as appropriate) the preceding fiscal year, and accompanied (i)
in the case of said consolidated statements and balance sheet of the Borrower,
by an opinion thereon of the Auditors, which opinion shall state that said
consolidated financial statements fairly present the consolidated financial
condition and results of operations of the Borrower and its Subsidiaries as at
the end of, and for, such fiscal year in accordance with AAP, and (ii) in the
case of said consolidating statements and balance sheets, by a certificate of a
senior financial officer of the Borrower which certificate shall state that said
consolidating financial statements fairly present the respective individual
unconsolidated financial condition and results of operations of the Borrower and
of each of its Subsidiaries, in each case in accordance with generally accepted
accounting principles, consistently applied, as at the end of, and for, such
fiscal year;
(d) Notice of Downgrade. Promptly upon becoming aware of same,
notice of any downgrade by any rating agency in its claims paying ability rating
for the Guarantor;
(e) Annual Reports. Promptly upon it becoming available, a copy of
each annual statement filed by the Guarantor with the insurance department of
the State of New York;
26
28
(f) Requested Information. With reasonable promptness, such other
data and information as any Bank may reasonably request;
(g) Officers' Certificates. Within the periods provided in
paragraphs (a) and (b) above, a certificate of an Authorized Representative
stating that he has reviewed the provisions of this Agreement and setting forth:
(i) the information and computations (in sufficient detail) required in order to
establish whether the applicable Company was in compliance with the requirements
of Sections 6.7(b), and 6.8 to 6.15, both inclusive, hereof at the end of the
period covered by the financial statements then being furnished, and (ii) to the
best of his knowledge, whether there exists on the date of the certificate or
existed at any time during the period covered by such financial statement any
Default or Event of Default and, if any such condition or event exists on the
date of the certificate or existed during such period, specifying the nature and
period of existence thereof and the action the applicable Company is taking, has
taken or proposes to take with respect thereto; and
(h) Certain Notices. Promptly after knowledge thereof shall have
come to the attention of any Authorized Representative:
(i) notice of any Default or Event of Default specifying the nature
and period of existence thereof and the action the applicable Company is taking,
has taken or proposes to take with respect thereto;
(ii) notice of any pending or overtly threatened litigation or
governmental proceeding against the Guarantor or any Primary Subsidiary which in
the good faith judgment of the Guarantor involves a reasonable possibility of
materially and adversely affecting the financial condition of the Guarantor and
its Primary Subsidiaries taken as a whole or the ability of the Companies to
perform their obligations hereunder and under the Notes or the validity or
enforceability of either Companies' obligations hereunder or under the Notes;
and
(iii) notice of the occurrence of any other event or condition
which in the reasonable judgment of the Guarantor materially and adversely
affects the financial condition or business prospects of the Guarantor and the
Primary Subsidiaries taken as a whole.
Without limiting the foregoing, the Companies will permit each Bank (or
such persons as any Bank may designate), to visit and inspect, under the
applicable Company's reasonable guidance, any of the properties of the
Companies, to examine all its books of account, records, reports and other
papers, to make copies and extracts therefrom (except with respect to
confidential proprietary nonfinancial information), and to discuss their
respective affairs, finances and accounts with their respective officers and
27
29
employees and auditors, all at such reasonable times and as often as may be
reasonably requested.
Section 6.7. Limitation on Liens. The Companies will not, and the
Guarantor will not permit any Primary Subsidiary to, create or incur, or suffer
to be incurred or to exist, any Lien of any kind on its Property, whether now
owned or hereafter acquired, or upon any income or profits therefrom, or
transfer any Property for the purpose of subjecting the same to the payment of
obligations in priority to the payment of its or their general creditors, or
acquire or agree to acquire, any Property or assets upon conditional sales
agreements or other title retention devices, except:
(a) Liens incurred in the ordinary course of business (x) for
taxes, assessments or other governmental charges or levies not at the time
delinquent or thereafter payable without penalty or being contested in good
faith in compliance with Section 6.3 hereof, (y) to carriers, warehousemen,
mechanics, materialmen and landlords for sums not overdue for a period of 45
days or more or being contested in good faith, or (z) for workmen's
compensation, unemployment insurance or other forms of governmental insurance or
benefits;
(b) Liens on real property and related assets granted to any home
loan bank, provided that the aggregate amount of Debt secured by all such Liens,
when taken together with the aggregate amount of Adjusted Debt secured by Liens
permitted by clause (g) of this Section 6.7 shall not exceed $100,000,000 at any
one time outstanding;
(c) any Lien (including judgment liens) arising pursuant to any
order of attachment, distraint or similar legal process arising in connection
with court proceedings so long as the execution or other enforcement thereof is
effectively stayed and the claims secured thereby are being contested in good
faith by appropriate proceedings and are either covered in full (subject to a
deductible in an amount which, if paid, would not have a material adverse effect
on the financial condition of the Guarantor and the Primary Subsidiaries), by
insurance as to which the carrier admits liability or the amount secured by such
Lien and not so covered by insurance is less than $10,000,000 in the aggregate);
(d) any Lien resulting from deposits which the Guarantor or a
Primary Subsidiary is required to make under the laws, rules, regulations or
administrative practices of any state or jurisdiction in which the Guarantor or
such Primary Subsidiary is qualified to do business;
(e) easements (including, without limitation, reciprocal easement
agreements and utility agreements), rights-of-way, covenants, consents,
reservations, encroachments, variations and other restrictions, charges or
encumbrances (whether or
28
30
not recorded) affecting the use of real property, which do not materially
detract from the value of such property or impair the use thereof;
(f) Liens on assets acquired by the Guarantor or any Primary
Subsidiary in satisfaction of past due obligations owing it which were in
existence at the time of acquisition, provided that neither the Guarantor nor
any Primary Subsidiary assumes liability for the indebtedness secured by such
Liens; and
(g) Liens not otherwise permitted by this Section 6.7 securing
Adjusted Debt not in excess of $5,000,000 at any one time outstanding.
Section 6.8. Adjusted Capital to Assets. The Guarantor shall at all
times maintain Adjusted Capital in an amount equal to or greater than 6.5% of
total assets of the Guarantor (exclusive of assets maintained in Separate
Accounts).
Section 6.9. Risk Based Capital Ratio. The Guarantor shall at all
times maintain a Risk Based Capital Ratio in an amount equal to or greater than
195%.
Section 6.10. Minimum Capital. The Guarantor shall at all times
during each of the calendar years set forth below maintain Capital of not less
than the amount specified for such year below:
Calendar Year Minimum Capital Shall Be
1996 $700,000,000
1997 $730,000,000
1998 $735,000,000
1999 $750,000,000
2000 $750,000,000
2001 $800,000,000
Section 6.11. 3 to 6 Rated Assets to Net Invested Assets. The
Guarantor will not at any time permit the portion of the invested assets of the
Guarantor and the Primary Insurance Subsidiaries consisting of notes, bonds and
other obligations of a character classified as "Bonds" on a consolidated balance
sheet of the Guarantor and the Primary Insurance Subsidiaries prepared in
accordance with AAP which bear NAIC Ratings of from 3 to 6 both inclusive to
exceed 5.5% of Net Invested Assets.
29
31
Section 6.12. 5 to 6 Rated Bonds to Capital. The Guarantor will not
at any time permit the portion of the invested assets of the Guarantor and the
Primary Insurance Subsidiaries consisting of notes, bonds and other obligations
of a character classified as "Bonds" on a consolidated balance sheet of the
Guarantor and the Primary Insurance Subsidiaries prepared in accordance with AAP
which bear NAIC Ratings of from 5 to 6 both inclusive to exceed 13% of Capital.
Section 6.13. Real Estate Investments to Net Invested Assets. The
Guarantor will not at any time permit the sum of the investment of the Guarantor
and the Primary Insurance Subsidiaries in real estate, real estate acquired in
satisfaction of indebtedness (exclusive, however, of any investments in real
estate otherwise included in the foregoing categories which consist of real
estate occupied by the Guarantor or the Primary Insurance Subsidiaries for use
in their business) plus mortgage loans on real estate to exceed 32% of Net
Invested Assets.
Section 6.14. Non-Performing Real Estate. The Guarantor will not at
any time permit the book value of the investment of the Guarantor and the
Primary Insurance Subsidiaries in Non-Performing Real Estate to exceed 80% of
Adjusted Capital.
Section 6.15. Total Debt to Adjusted Capital. The Guarantor will
not at any time permit the consolidated Debt of the Guarantor and its
Subsidiaries to exceed 100% of Adjusted Capital.
Section 6.16. ERISA Compliance.
(a) Relationship of Vested Benefits to Pension Plan Assets. The
Companies will, and the Guarantor will cause the Primary Subsidiaries to, at all
times maintain the qualified status of those Plans which are intended to be
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(the "Code"). The Companies will not, and the Guarantor will not permit any
Primary Subsidiary to, at any time terminate any Plan subject to Title IV of
ERISA unless on the date of such termination the present value of all employee
benefits vested under such Plan does not exceed the present value of the assets
allocable to such vested benefits.
(b) Valuations. All assumptions and methods used to determine the
actuarial valuation of vested employee benefits under Plans subject to Title IV
of ERISA at any time maintained by any one or more of the Guarantor or the
Primary Subsidiaries and the present value of assets of such Plans shall be
reasonable in the good faith judgment of the Guarantor and shall comply with all
requirements of law in all material respects.
30
32
(c) Prohibited Actions. Neither of the Companies nor any Primary
Subsidiary nor any Plan at any time maintained by either of the Companies or
any Primary Subsidiary will:
(1) engage in any "prohibited transaction" (as such term is defined
in Section 406 or Section 2003(a) of ERISA) which is not entitled to an
exemption under ERISA or the Code;
(2) incur any "accumulated funding deficiency" (as such term is
defined in Section 302 of ERISA) whether or not waived; or
(3) terminate any such Plan in a manner which could result in the
imposition of a Lien on the Property of either Company or any Primary Subsidiary
pursuant to Section 4068 of ERISA.
Section 6.17. Minimum Ratings. The Guarantor shall at all times
maintain a Xxxxx'x Rating of not less than A3 and an S&P Rating of not less than
A-.
Section 6.18. Mergers, Consolidations and Sales of Assets. The
Guarantor will not, and will not permit any Primary Subsidiary to, (a)
consolidate with or be a party to a merger with any other Person or (b) sell,
lease or otherwise dispose of any substantial part of its Properties, provided
that the foregoing shall not apply to or operate to prevent (i) reinsurance and
similar risk sharing arrangements entered into in the ordinary course of
business, (ii) sales or other dispositions of assets acquired in satisfaction of
obligations owing the Guarantor or a Primary Subsidiary, (iii) mergers of a
Primary Subsidiary with and into the Guarantor and other mergers not involving
the Guarantor, or (iv) the sale of all or any substantial part of the assets of,
or of the equity interests held by the Guarantor in, any Primary Subsidiary so
long as in the case of each of the matters described in clauses (i) through (iv)
above, no Default or Event of Default shall have occurred and be continuing or
would occur as a result thereof. The foregoing to the contrary notwithstanding,
the Guarantor will not in any event sell, transfer or otherwise dispose of
capital stock of the Borrower or permit the merger of the Borrower into any
other Person other than the Guarantor if after giving effect thereto the
Borrower would no longer be a Subsidiary of the Guarantor or would not be the
survivor of the merger in question.
SECTION 7. GUARANTEE.
Section 7.1. Guarantee. The Guarantor hereby absolutely,
irrevocably and unconditionally guarantees to each Bank and the Agents and their
respective successors and assigns the prompt payment in full when due (whether
at stated maturity, by acceleration or otherwise) of the principal of and
interest on the Loans made by the Banks to, and the Notes held by each Bank of,
the Borrower and all other amounts from
31
33
time to time owing to the Banks or the Agents by the Borrower under this
Agreement and under the Notes, in each case strictly in accordance with the
terms hereof and thereof (such obligations being herein collectively called the
"Guaranteed Obligations"). The Guarantor hereby further agrees that if the
Borrower shall fail to pay in full when due (whether by stated maturity, by
acceleration or otherwise) any of the Guaranteed Obligations, the Guarantor will
promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, by acceleration or otherwise) in accordance with the terms of
such extension or renewal.
Section 7.2. Obligations Unconditional. The obligations of the
Guarantor under Section 7.1 hereof are absolute, irrevocable and unconditional,
irrespective of the value, genuineness, validity, regularity or enforceability
of the obligations of the Borrower under this Agreement, the Notes or any other
agreement or instrument referred to herein or therein, or any substitution,
release or exchange of any other guarantee of or security for any of the
Guaranteed Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 7.2 that the obligations of the Guarantor
hereunder shall be absolute, irrevocable and unconditional under any and all
circumstances. Without limiting the generality of the foregoing, it is agreed
that the occurrence of any one or more of the following shall not alter or
impair the liability of the Guarantor hereunder which shall remain absolute,
irrevocable and unconditional as described above:
(i) at any time or from time to time, without notice to the
Guarantor, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or the Notes or any other agreement or instrument referred to herein
or therein shall be done or omitted; or
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this Agreement or the
Notes or any other agreement or instrument referred to herein or therein shall
be waived or any other guarantee of any of the Guaranteed Obligations or any
security therefor shall be released or exchanged in whole or in part or
otherwise dealt with.
The Guarantor hereby expressly waives diligence, presentment, demand of
payment, protest and all notices whatsoever (including notice of acceptance),
and any
32
34
requirement that the Agents or any Bank exhaust any right, power or remedy or
proceed against the Borrower under this Agreement or the Notes or any other
agreement or instrument referred to herein or therein, or against any other
Person under any other guarantee of, or security for, any of the Guaranteed
Obligations.
Section 7.3. Reinstatement. The obligations of the Guarantor under
this Section 7 shall be automatically reinstated if and to the extent that for
any reason any payment by or on behalf of the Borrower in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored by any holder
of any of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise and the Guarantor agrees that it will
indemnify the Agents and each Bank on demand for all reasonable costs and
expenses (including, without limitation, fees of counsel) incurred by the Agents
or such Bank in connection with such rescission or restoration, including any
such costs and expenses incurred in defending against any claim alleging that
such payment constituted a preference, fraudulent transfer or similar payment
under any bankruptcy, insolvency or similar law.
Section 7.4. Subrogation. The Guarantor hereby waives all rights of
subrogation or contribution, whether arising by contract or operation of law
(including, without limitation, any such right arising under the Bankruptcy
Code) or otherwise by reason of any payment by it pursuant to the provisions of
this Section 7 and further agrees with the Borrower for the benefit of each of
its creditors (including, without limitation, each Bank and the Agent) that any
such payment by it shall constitute a contribution of capital by the Guarantor
to the Company.
Section 7.5. Remedies. The Guarantor agrees that, as between the
Guarantor and the Banks, the obligations of the Guarantor under this Agreement
and the Notes may be declared to be forthwith due and payable as provided in
Section 8 hereof (and shall be deemed to have become automatically due and
payable in the circumstances provided in said Section 8) for purposes of Section
7.1 hereof notwithstanding any stay, injunction or other prohibition preventing
such declaration (or such obligation from becoming automatically due and
payable) as against the Borrower and that, in the event of such declaration (or
such obligations being deemed to have become automatically due and payable),
such obligations (whether or not due and payable by the Borrower) shall
forthwith become due and payable by the Guarantor for purposes of said Section
7.1.
Section 7.6. Continuing Guarantee. The guarantee in this Section 7
is a continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.
Section 8.1. Events of Default. Any one or more of the following
shall constitute an Event of Default:
33
35
(a) Default in the payment when due of any principal amount of any
Note or any Loan evidenced thereby or default for two Business Days in the
payment when due of any interest thereon or any other amount payable by the
Borrower hereunder; or
(b) Default shall be made in the payment of the principal of or
interest on any Adjusted Debt of the Guarantor or any Subsidiary in an amount in
excess of $10,000,000 as and when the same shall become due and payable by the
lapse of time, by declaration, by call for redemption or otherwise, and such
default shall continue beyond any period of grace or notice, if any, allowed
with respect thereto or any other default shall have occurred under the terms of
any instrument or agreement evidencing or setting forth terms and conditions
applicable to Adjusted Debt of the Guarantor or any Subsidiary in an amount in
excess of $5,000,000, such default shall have been declared by the requisite
holder or holders of such Adjusted Debt and any period of grace applicable
thereto shall have expired; or
(c) Default shall be made in the payment when due of any amount
payable by the Guarantor or any Primary Subsidiary under any policy of
insurance, surety bond or similar undertaking, provided that the failure to pay
a disputed claim shall not be an Event of Default hereunder if and so long as
the Guarantor or the applicable Primary Subsidiary is contesting such claim in
good faith by appropriate actions or proceedings and, if the amount involved is
material, the Guarantor or the applicable Primary Subsidiary shall have set
aside on its books reserves deemed by the Guarantor in its reasonable judgment
to be adequate with respect thereto or such greater amount as may be required by
AAP; or
(d) Default shall occur in the observance or performance of any
covenant or agreement contained in Section 6.17 or 6.18 hereof; or
(e) Default shall occur in the observance or performance of any
other provision of this Agreement which is not remedied within 20 days after the
date on which notice of such default is first given to the Borrower by the
Administrative Agent or any Bank; or
(f) Any representation or warranty made or deemed made by the
Companies or either of them herein, or in any statement or certificate furnished
in connection with this Agreement or any Loan or furnished pursuant hereto, is
untrue in any material respect as of the date of the issuance or making (or
deemed issuance or making) thereof; or
(g) Final judgment or judgments for the payment of money not fully
covered by insurance as to which the carrier has admitted, accepted or assumed
liability aggregating in excess of $10,000,000 is or are outstanding against the
Guarantor or any
34
36
Primary Subsidiary or against any of their Property (other than judgments which
are nonrecourse as to the Guarantor and the Primary Subsidiaries and are
outstanding only against Property acquired by the Guarantor in satisfaction of
past due obligations owing it) and any one of such judgments has remained
unpaid, unvacated, unbonded or unstayed by appeal or otherwise for a period of
30 days from the date of its entry; or
(h) A custodian, receiver, liquidator, rehabilitator, conservator
or trustee of the Guarantor or any Primary Subsidiary, or of any of their
Property, is appointed or takes possession; or an order is entered for the
liquidation, dissolution or rehabilitation of the Guarantor or any Primary
Subsidiary; or the Guarantor or any Primary Subsidiary generally fails to pay
its debts as they become due or admits in writing its inability to pay its debts
as they mature; or the Guarantor or any Primary Subsidiary is adjudicated
bankrupt or insolvent; or any of their material Property is sequestered by court
order and the order remains in effect for more than 45 days; or an application
or a petition is filed against the Guarantor or any Primary Subsidiary under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution, liquidation, rehabilitation or conservation law of any
jurisdiction, whether now or subsequently in effect; or
(i) The Guarantor or any Primary Subsidiary files a petition or
consents to a petition or order seeking relief under any provision of any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution, liquidation, rehabilitation or conservation law of any
jurisdiction, whether now or subsequently in effect; or consents to the filing
of any petition against it under any such law; or consents to the appointment of
or taking possession by a custodian, receiver, trustee, liquidator,
rehabilitator or conservator for the Guarantor or any Primary Subsidiary or any
of their Property.
Section 8.2. Non-Bankruptcy Defaults. When any Event of Default,
other than an Event of Default described in subsection (h) or (i) of Section 8.1
hereof, has occurred and is continuing, the Administrative Agent may, and if so
directed by Banks holding 66-2/3% or more of the outstanding principal balance
of the Loans or, if no Loans are outstanding, Banks granting 66-2/3% or more of
the Commitments shall, take either or both of the following actions: (i)
terminate the Commitments of the Banks hereunder on the date (which may be the
date thereof) stated in the notice from the Administrative Agent and (ii)
declare the principal of and the accrued interest on the Notes to be forthwith
due and payable and thereupon said Notes, including both principal and interest,
shall be and become immediately due and payable together with all other amounts
payable under this Agreement accrued through the date of such termination or
declaration without further demand, presentment, protest or notice of any kind.
Section 8.3. Bankruptcy Defaults. When any Event of Default
described in subsection (h) or (i) of Section 8.1 hereof has occurred and is
continuing,
35
37
then the principal of and accrued interest on all Notes shall immediately become
due and payable together with all other amounts payable under this Agreement and
then outstanding without presentment, demand, protest or notice of any kind, and
the obligation of the Banks to extend further credit pursuant to any of the
terms of this Agreement shall immediately terminate.
SECTION 9. DEFINITIONS; INTERPRETATION OF AGREEMENT.
Section 9.1. Definitions. The following terms when used herein
shall have the following meanings, such terms to be equally applicable to both
the singular and the plural of the terms defined:
"AAP" shall mean the accounting practices prescribed or permitted by
the Insurance Departments of the State of New York (or the relevant state of
domicile of the Guarantor and the Primary Subsidiaries at the relevant time) as
such practices are predominantly promulgated by the National Association of
Insurance Commissioners.
"Adjusted Capital" shall mean as of the time of determination the sum
at such time of (i) Capital and (ii) the Guarantor's reserves for losses on real
estate.
"Adjusted Debt" of any Person shall mean for such Person the sum of
Debt plus the obligations excluded from Debt by the proviso to the definition of
that term.
"Administrative Agent" shall mean First National Bank of Boston acting
out of its London office and its successors as agent hereunder.
"Agents" shall mean First National Bank of Boston and Deutsche Bank AG
London.
"Applicable Eurocurrency Margin" has the meaning specified in Section
2.1 hereof.
"Asset Valuation Reserve" shall mean the consolidated asset valuation
reserves of the Guarantor and the Primary Insurance Subsidiaries as computed in
accordance with the asset valuation procedures of the National Association of
Insurance Commissioners.
"Assignment Agreement" has the meaning specified in Section 11.11
hereof.
"Associated Costs Rate" has the meaning specified on Schedule I hereto.
"Auditors" has the meaning specified in Section 6.6(b) hereof.
"Authorized Representative" shall mean the Vice President-Treasurer of
the Borrower or such other persons as may from time to time be designated as
such in writing
36
38
from the Vice President-Treasurer of the Borrower or other authorized officers
of the Borrower to the Administrative Agent.
"Banks" shall mean the banks signatory hereto together with assignees
pursuant to Section 11.11 hereof.
"Borrower" shall mean PM Holdings, Inc., a Connecticut corporation.
"Borrowing" shall mean the total of Loans of a single type made by one
or more of the Banks on a single date and for a single Interest Period.
"Borrowing Date" shall mean the date a Borrowing is to be funded
pursuant to this Agreement, which must be a Business Day.
"Business Day" shall mean any day other than a Saturday or Sunday on
which banks are not authorized or required to close in any of Hartford,
Connecticut, New York, New York and Boston, Massachusetts and a day on which
banks are also open for business and dealing in Pound Sterling deposits in
London, England.
"Capital" shall mean the sum for the Guarantor of its unrestricted
surplus accounts plus the Asset Valuation Reserve.
"Capitalized Lease" shall mean any lease the obligation for Rentals
with respect to which is required to be capitalized on a balance sheet of the
lessee in accordance with AAP, but in any event including any lease entered into
as part of a sale/leaseback transaction.
"Capitalized Rentals" shall mean as of the date of any determination
the amount at which the aggregate Rentals due and to become due under all
Capitalized Leases under which the Guarantor or a Primary Subsidiary is a lessee
would be reflected as a liability on a consolidated balance sheet of the
Guarantor and the Primary Subsidiaries prepared in accordance with AAP.
"Code" has the meaning specified in Section 6.16(a) hereof.
"Commitment" has the meaning specified in Section 1.1 hereof.
"Companies" shall mean the Borrower and the Guarantor.
"Debt" of any Person shall mean and include, without duplication, the
sum for such Person of all (i) obligations of such Person for borrowed money
(but not including in any case unborrowed amounts under ordinary revolving loan
commitments) or which have been incurred in connection with the acquisition of
Property or assets other than current accounts payable, (ii) obligations secured
by any Lien or other charge upon
37
39
Property or assets owned by such Person, even though such Person has not assumed
or become liable for the payment of such obligations, (iii) obligations created
or arising under any conditional sale or other title retention agreement with
respect to Property acquired by such Person, notwithstanding the fact that the
rights and remedies of the seller, lender or lessor under such agreement in the
event of default are limited to repossession or sale of property, (iv)
obligations (other than obligations under any lease which is not a Capitalized
Lease and obligations in an amount equal to the demand component of any contract
providing for usual and customary utility services, including gas, water,
electricity and wastewater treatment services) to purchase any Property or to
obtain the services of another Person if the contract requires that payment for
such Property or services be made regardless of whether such Property is
delivered or such services are performed, except that no obligation shall
constitute Debt solely because the contract provides for liquidated damages or
reimbursement of expenses following cancellation, (v) all Guaranties by such
Person, (vi) Capitalized Rentals and (vii) obligations (absolute or contingent)
in respect of letters of credit but only to the extent that the letter of credit
does not support an obligation of such Person already included in Debt or which
would constitute a current account payable of such Person, provided that the
following shall be excluded from Debt: (aa) repurchase obligations under short
term securities lending arrangements with securities dealers and banks so long
as such Person's repurchase obligation is conditional on delivery of the
securities in question and (ab) the liability of such Person under interest rate
swaps and other interest rate hedging arrangements. The consolidated Debt of the
Guarantor and its Subsidiaries shall be computed without duplication, so that a
Guaranty of a Subsidiary's Debt will not be added to consolidated Debt.
"Default" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute an
Event of Default.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974
as amended.
"Eurocurrency Loan" shall mean a Loan bearing interest as specified in
Section 2.1 hereof.
"Event of Default" shall mean any of the events specified in Section
8.1 hereof.
"Floating Rate" shall have the meaning specified on Schedule II hereto.
"Guaranteed Obligations" has the meaning specified in Section 7.1
hereof.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other
38
40
obligation of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, all obligations incurred
through an agreement, contingent or otherwise, by such Person: (i) to purchase
on default such indebtedness or obligation or any Property or assets
constituting security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of such indebtedness or obligation, (y) to maintain working
capital or other balance sheet condition or otherwise to advance or make
available funds for the purchase or payment of such indebtedness or obligation,
or (iii) to lease Property or to purchase securities or other Property or
services primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of the primary obligor to make payment of such
indebtedness or obligation, or (iv) otherwise to assure the owner of such
indebtedness or obligation against loss in respect thereof resulting from the
primary obligor's failure to pay or perform. For the purposes of all
computations made under this Agreement, a Guaranty in respect of any Debt for
money borrowed shall be deemed to be Debt equal to the principal amount of such
outstanding Debt for money borrowed which has been guaranteed, and a Guaranty in
respect of any other obligation or any dividend shall be deemed to be
indebtedness equal to the maximum aggregate amount of such obligation or
dividend for which the person guaranteeing may be liable.
"Guarantor" shall mean Phoenix Home Life Mutual Insurance Company, a
New York mutual insurance company.
"Interest Period" shall mean the period commencing on the date a
Borrowing of Loans is made and ending on the date, as the Borrower may select,
in the case of Eurocurrency Loans, 1, 2, 3, or 6 months thereafter provided,
however, that:
1. no Interest Period may extend beyond the Termination Date; and
2. whenever the last day of any Interest Period would otherwise be
a day that is not a Business Day, the last day of such Interest Period shall be
extended to the next succeeding Business Day, provided, that, in the case of an
Interest Period for a Borrowing of Eurocurrency Loans, if such extension would
cause the last day of such Interest Period to occur in the following calendar
month, the last day of such Interest Period shall be the immediately preceding
Business Day.
For purposes of determining an Interest Period, a month means a period
starting on one day in a calendar month and ending on the numerically
corresponding day in the next calendar month, provided, however, if an Interest
Period begins on the last day of a month or if there is no numerically
corresponding day in the month in which an Interest Period is to end, then such
Interest Period shall end on the last Business Day of such month.
"Lending Office" has the meaning specified in Section 2.8 hereof.
39
41
"LIBOR" has the meaning specified in Section 2.1 hereof.
"Lien" shall mean any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, including, without
limitation, the security interest or lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes and including any Capitalized Lease. For the purpose of
this Agreement, the Guarantor or a Primary Subsidiary shall be deemed to be the
owner of any Property which it has acquired or holds subject to a conditional
sale agreement or other arrangement pursuant to which title to such Property has
been retained by or vested in another Person for security purposes.
"Loans" is defined in Section 1.1 hereof.
"Xxxxx'x Rating" shall mean at any time the rating assigned by Xxxxx'x
Investors Service, Inc. to the claims paying ability of the Guarantor.
"NAIC Ratings" shall mean the quality ratings assigned by the
Securities Valuation Office of the National Association of Insurance
Commissioners to investments of the Guarantor and the Primary Insurance
Subsidiaries. References in this Agreement to particular NAIC ratings are
references to such ratings as currently defined and classified by the Securities
Valuation Office of the National Association of Insurance Commissioners and if
such rating system is changed then each reference to a particular rating in this
Agreement shall be deemed to be a reference to the rating under such changed
rating system which most closely approximates the credit quality of the
particular rating as currently defined. The Guarantor will use its best efforts
to at all times have not less than 90% of its bond portfolio and that of the
Primary Insurance Subsidiaries covered by NAIC Ratings. If for any reason beyond
the control of the Guarantor NAIC Ratings are unavailable for such percentage of
the bond portfolios of the Guarantor and the Primary Insurance Subsidiaries or
the NAIC rating system is discontinued then in that event the Guarantor and the
Banks agree to negotiate in good faith for an amendment to this Agreement
replacing Sections 6.11 and 6.12 hereof with new covenants measuring the credit
quality of the bond portfolio of the Guarantor and the Primary Insurance
Subsidiaries and which are not materially more liberal nor restrictive than
Sections 6.11 and 6.12 hereof as presently in effect, but in the event that the
Guarantor and the Required Banks are unable to agree to such an amendment within
60 days of the date the NAIC rating system is discontinued or the Guarantor is
unable to comply with the preceding sentence then in that event this Agreement
may, at the option of the Required Banks or the Guarantor, terminate whereupon
the Commitments shall terminate and all outstanding Loans, together with
interest thereon and any amounts due the Banks under this Agreement, including
Section 2.5 hereof, shall be repaid.
40
42
"Net Invested Assets" shall mean the Guarantor's and the Primary
Insurance Subsidiaries' portfolios of stocks, bonds, mortgage loans, real
estate, policy loans and other assets classified as invested assets under AAP
less separate account assets.
"Non-Performing Real Estate" shall mean the book value of the sum of
(i) real estate acquired by the Guarantor and the Primary Insurance Subsidiaries
in satisfaction of indebtedness, whether by foreclosure, deed in lieu of
foreclosure or otherwise, which during the period of 180 days prior to the date
of determination had a net operating income (gross income less taxes,
maintenance and other operating expenses and also less principal and interest on
indebtedness not owing to the Guarantor or the applicable Primary Insurance
Subsidiary) of less than 6% of book value, (ii) mortgage loans the terms of
which have been modified because of the borrower's inability to comply with the
terms as originally agreed or which are in the process of foreclosure and under
which the amount received by the Guarantor or the applicable Primary Insurance
Subsidiary (exclusive of amounts received for taxes or insurance or in payment
of expenses) during the 90 days preceding the date of determination is an amount
which on an annual basis would return to the Guarantor or the applicable Primary
Insurance Subsidiary less than 6% of the book value of the mortgage loan in
question and (iii) mortgage loans on which any payment of principal or interest
is more than 90 days past due.
"Notes" has the meaning specified in Section 3.2 hereof.
"Person" shall mean an individual, partnership, corporation, limited
liability company, trust or unincorporated organization, and a government or
agency or political subdivision thereof.
"Plan" has the meaning specified in Section 4.14 hereof.
"Pound Sterling" and "L" each shall mean the lawful currency of the
United Kingdom.
"Primary Insurance Subsidiaries" shall mean those Primary Subsidiaries
principally engaged in the business of insurance.
"Primary Subsidiaries" shall mean Phoenix American Life Insurance Co.,
the Borrower, Phoenix Duff & Xxxxxx Inc., and any other Subsidiary of the
Guarantor which at the time of determination has capital or a net worth in
excess of $25,000,000.
"Property" shall mean any interest of any kind in property or assets,
whether real, personal or mixed, and whether tangible or intangible.
"Refunding Borrowing" has the meaning specified in Section 1.3(d)
hereof.
41
43
"Rentals" shall mean and include all fixed rents (including as such all
payments which the lessee is obligated to make to the lessor on termination of
the lease or surrender of the Property) payable by the Guarantor or a Primary
Subsidiary, as lessee or sublessee under a lease of real or personal Property,
but shall be exclusive of any amounts required to be paid by the Guarantor or a
Primary Subsidiary (whether or not designated as rents or additional rents) on
account of maintenance, repairs, insurance, taxes and similar charges. Fixed
rents under any so-called "percentage leases" shall be computed solely on the
basis of the minimum rents, if any, required to be paid by the lessee regardless
of sales volume or gross revenues.
"Required Banks" shall mean Banks granting 66-2/3% or more of the
Commitments or if the Commitments are not outstanding, Banks holding 66-2/3% or
more of the outstanding principal amount of the Loans.
"Risk Based Capital Ratio" shall mean, as of any time the same is to be
determined, the ratio of Total Adjusted Capital of the Guarantor to the Company
Action Level of the Guarantor. The Total Adjusted Capital of the Guarantor shall
be computed in the manner from time to time prescribed by the Insurance
Department of the State of New York for inclusion in the annual statement of the
Guarantor to such Department (Total Adjusted Capital currently appearing on page
23 of such annual statement in column 1, line 27 and currently consisting of
capital and surplus, the asset valuation reserve of the Guarantor and 50% of the
Guarantor's dividend liability). The "Company Action Level" of the Guarantor
shall equal 200% of the Authorized Control Level Risk-Based Capital of the
Guarantor. The Authorized Control Level Risk-Based Capital of the Guarantor
shall be computed in the manner from time to time prescribed by the Insurance
Department of the State of New York for inclusion in the annual statement of the
Guarantor to such Department, such Authorized Control Level Risk-Based Capital
currently appearing on page 23 of such statement in column 1, line 28.
"S&P Rating" shall mean at any time the rating assigned by Standard &
Poor's Ratings Services, a Division of the McGraw Hill Companies, Inc. to the
claims paying ability of the Guarantor.
"Separate Accounts" shall mean accounts maintained by the Guarantor and
the Primary Insurance Subsidiaries pursuant to the New York Insurance Law of a
character such that the assets allocated thereto are to provide for annuities or
life insurance benefits under specific annuity and/or insurance contracts and
are not chargeable with other liabilities of the Guarantor or the Primary
Insurance Subsidiaries.
"Subsidiary" shall mean, as to any particular parent corporation, any
corporation of which more than 50% (by number of votes) of the Voting Stock
shall be owned by such parent corporation and/or one or more corporations which
are themselves Subsidiaries of such parent corporation.
42
44
"Termination Date" shall mean July 11, 2001.
"U.S. Dollars" and "$" each shall mean the lawful currency of the
United States of America.
"Voting Stock" shall mean securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
vote for the election of corporate directors (or Persons performing similar
functions).
Section 9.2. Accounting Principles. Where the character or amount
of any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, the same shall be done in accordance
with AAP, to the extent applicable, applied consistently (except for changes in
application with respect to which the Auditors concur) with the principles used
in preparation of the December 31, 1994 financial statements of the Guarantor
heretofore delivered to the Banks, except where such principles are inconsistent
with the specific provisions of this Agreement.
Section 9.3. Moody's Ratings and S&P Ratings. All references in
this Agreement to particular Moody's Ratings and S&P Ratings are references to
such ratings as currently defined by Xxxxx'x Investors Service, Inc. and/or
Standard & Poor's, a Division of the McGraw Hill Companies, Inc. and in the
event either of such corporations changes its rating system, each reference to a
particular rating set forth in this Agreement shall be deemed to be a reference
to the rating under such changed rating system which, in the reasonable judgment
of the Administrative Agent, after consultation with the rating service
involved, most closely approximates the level of claims paying ability
associated with the particular rating as currently defined. Whenever a
determination of compliance with any provision of this Agreement or any interest
rate or fee is dependent upon the availability of both a Xxxxx'x Rating and an
S&P Rating and one or the other (but not both) of such rating services ceases to
rate the claims paying ability of the Guarantor, compliance with the applicable
provisions of this Agreement and determinations of interest rates and fees shall
be made on the basis of the rating which is available. If for any reason neither
a Xxxxx'x Rating nor an S&P Rating is available for the Guarantor then in that
event compliance with the provisions of this Agreement where a determination of
such a rating is necessary and determinations of interest rates and fees shall
be made by the Required Banks, after consultation with the Guarantor, based on
the Required Banks' good faith estimates of what such ratings would have been
had they been available, the determination of the Required Banks in such regards
to be final and conclusive provided that they have been made in good faith.
Section 9.4. Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited
43
45
from taking, such provision shall be applicable whether the action in question
is taken directly or indirectly by such Person.
SECTION 10. THE AGENTS.
Section 10.1. Appointment and Duties. For the convenience of the
parties hereto, The First National Bank of Boston is appointed Administrative
Agent hereunder and Deutsche Bank AG London is appointed Documentation Agent
hereunder, in each case, by and for the Banks with such powers as are
specifically delegated to the Administrative Agent and Documentation Agent,
respectively, by the terms of this Agreement, together with such other powers as
are reasonably incidental thereto, and by its execution hereof accepts such
agency, solely for the purposes herein set forth and as such agency is described
herein. Neither Agent shall have authority to enforce, nor any duty or
responsibility for the enforcement of, any of the terms hereof except as a Bank
hereunder. Neither Agent nor any of their respective directors, officers or
employees shall be liable for any action taken or omitted to be taken by it or
them hereunder, except for its or their own gross negligence or willful
misconduct. Each Agent shall be protected in acting upon any notice, request,
certificate, letter, statement (oral or written) or other documents believed by
it in good faith to be genuine and correct and to have been signed or sent by
the proper person or persons and, in the case of legal matters, upon the advice
of counsel selected by such Agent. The Agents may treat the Banks that are named
herein as the holders of the Notes and the indebtedness contemplated herein
unless and until the Agents receive notice of the assignment of a Note and
indebtedness held by a Bank hereunder. As to any matters not expressly provided
for by this Agreement, the Agents shall in all cases be fully protected in
acting, or refraining from acting, hereunder in accordance with the instructions
of the Required Banks, and such instructions of the Required Banks and any
action taken or not taken pursuant thereto shall be binding on all Banks. Each
Agent shall be acting as an independent contractor hereunder and nothing herein
shall be deemed to impose on either Agent any fiduciary obligations to the Banks
or the Borrowers. None of the Agents other than the Administrative Agent shall
have any duties or responsibilities hereunder.
Section 10.2. Sufficiency of the Agreement. The Agents take no
responsibility for the truth of any warranties or representations given or made
herein, except expressed representations made by the Administrative Agent
herein, and the Agents shall not be responsible to the Banks for the validity,
effectiveness, enforceability or sufficiency of this Agreement, the Notes or any
other related documents.
Section 10.3. Independent Investigation. Each Bank warrants that it
has made its own independent investigations of the financial condition and
affairs of the Companies in connection with the making and continuance of the
Loans hereunder and has not relied upon information provided to such Bank by the
Agents (provided that it is acknowledged that the Banks have relied on
information provided to them by the
44
46
Companies through the Agents and the Companies' liability therefor shall be the
same as though they had directly provided such information to the Banks) and
each Bank represents that it shall continue throughout the duration of this
Agreement to make its own independent appraisal of the Companies.
Section 10.4. Agents as Bank. Each Agent shall be under the same
obligations and be entitled to the same rights and powers in its capacity as a
Bank as if it were not an Agent and the Agents shall not be obliged by reason of
their position as Agents to account to any other Bank for any sum received by
them hereunder in their capacity as Banks or for the profit element thereof and
the Agents or any Bank may, without liability to account to the other Banks,
accept deposits from, lend money to, and generally engage in any kind of banking
or trust business with, the Companies and their affiliates as if they were not
the Agents or a Bank, as the case may be.
Section 10.5. Indemnification of Agents. The Companies and (to the
extent not reimbursed by the Companies) each Bank (pro-rata in accordance with
their respective Commitments) agree to indemnify the Agents and each of them
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Agents or any of them (in their capacities as such) in any way
relating to or arising out of this Agreement, provided that neither the
Companies nor any Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements arising from the gross negligence or willful
misconduct of the party seeking indemnity.
Section 10.6. Refusal to Act. Except for action expressly required
of the Administrative Agent hereunder, the Administrative Agent shall in all
cases be fully justified in failing or refusing to act hereunder unless it shall
be indemnified to its reasonable satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action (other than liability for its own gross
negligence or willful misconduct). In all cases in which this Agreement does not
require the Administrative Agent to take certain actions, the Administrative
Agent shall be fully justified in using its discretion in failing to take or in
taking any action hereunder.
Section 10.7. Successor Administrative Agent. Subject to the
appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving written notice
thereof to the Banks and the Companies. Upon any such resignation, the Required
Banks shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Required
Banks and shall have accepted such appointment within thirty (30) days after the
retiring Administrative Agent's giving notice of resignation, then the retiring
Administrative Agent may, on behalf of the Banks,
45
47
appoint a successor Administrative Agent, which shall be a bank or trust company
with capital and surplus in excess of $500,000,000. Upon the acceptance of any
appointment as successor Administrative Agent hereunder, such successor
Administrative Agent shall thereupon 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. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provision of this Section 10 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 the Administrative Agent.
SECTION 11. MISCELLANEOUS.
Section 11.1. Waiver of Rights. No delay or failure on the part of
the Administrative Agent or any Bank or the holder or holders of any Note in the
exercise of any power or right shall operate as a waiver thereof, nor as an
acquiescence in any default, nor shall any single or partial exercise thereof,
or the exercise of any other power or right, preclude any other right or the
further exercise of any other rights, and the rights and remedies hereunder of
the Administrative Agent, the Banks and the holder or holders of any Note are
cumulative to, and not exclusive of, any rights or remedies which any of them
would otherwise have.
Section 11.2. Non-Business Day. If any payment of principal or
interest on any Eurocurrency Loan shall fall due on a day which is not a
Business Day, the payment date therefor shall be extended to the next date which
is a Business Day and the Interest Period for such Loan and the period for which
interest is to be paid shall be accordingly extended, unless as a result thereof
any payment date would fall in the next calendar month, in which case such
payment date shall be the immediately preceding Business Day and the relevant
Interest Period shall be correspondingly abbreviated. In either case the next
Interest Period shall be measured from the payment date so adjusted.
Section 11.3. Documentary Taxes. The Borrower agrees to pay any
documentary, stamp or similar taxes payable in respect of this Agreement or any
Note, including interest and penalties, in the event any such taxes are assessed
irrespective of when such assessment is made and whether or not any credit is
then in use or available hereunder.
Section 11.4. Survival of Representations. All representations and
warranties made herein or in certificates given pursuant hereto shall survive
the execution and delivery of this Agreement and of the Notes, and shall
continue in full force and effect with respect to the date as of which they were
made as long as any credit is in use or available hereunder.
46
48
Section 11.5. Survival of Indemnities. All indemnities and all
other provisions relative to reimbursement to the Banks of amounts sufficient to
protect the yield of the Banks with respect to the Eurocurrency Loans,
including, but not limited to, Sections 2.7, 2.10, 3.7, 11.3 and 11.12 hereof,
and the other protective provisions hereof including Section 7.3 hereof, shall
survive the termination of this Agreement and the payment of the Notes.
Section 11.6. Set-off Sharing. Each Bank agrees with each other
Bank a party hereto that in the event such Bank shall receive and retain any
payment, whether by setoff or application of deposit balances or otherwise
(other than pursuant to Section 2.7 or 11.11 hereof) on or in respect of its
Notes in excess of its ratable share of payments on all Notes then outstanding
to the Banks then such Bank shall purchase for cash at face value, but without
recourse, ratably from each of the other Banks such amount of the Notes held by
each such other Bank (or interest therein) as shall be necessary to cause such
Bank to share such excess payment ratably with all the other Banks; provided,
however, that if any such purchase is made by any Bank, and if such excess
payment or part thereof is thereafter recovered from such purchasing Bank, the
related purchases from the other Banks shall be rescinded ratably and the
purchase price restored as to the portion of such excess payment so recovered,
but without interest. Each Company acknowledges and agrees that the Banks shall
have the right to set off amounts due it against any claims of such Company
purchased by them from other Banks pursuant to this Section 11.6, such right to
be in addition to and not in lieu of any rights of setoff to which they would
otherwise be entitled to exercise.
Section 11.7. Notices. All communications provided for herein shall
be in writing or by telex, telegraph or facsimile transmission, except as
otherwise specifically provided for hereinabove, addressed, if to the Companies
or either of them at Xxx Xxxxxxxx Xxx, Xxxxxxxx, XX 00000, Attention: Xxxxxxx
Xxxxxxxx or if to the Administrative Agent or Banks at their respective
addresses set forth opposite their respective signatures hereto, or at such
other address as shall be designated by any party hereto in a written notice to
each other party pursuant to this Section 11.7. Any notice in writing shall be
deemed to have been given or made when served personally or when received if
sent by United States mail, and any notice given by telex or telegraphic means
shall be deemed given when transmitted (answerback confirmed); provided that any
notice to the Administrative Agent or any Bank under Sections l and 2 hereof
shall only be effective upon receipt.
Section 11.8. Counterparts. This Agreement may be executed in any
number of counterparts, and by the different parties on different counterparts,
each of which when executed shall be deemed an original, but all such
counterparts taken together shall constitute one and the same instrument.
47
49
Section 11.9. Successors and Assigns. This Agreement shall be
binding upon the Companies and their successors and assigns, and shall be
binding upon and inure to the benefit of the Banks and their respective
successors and permitted assigns, including any subsequent holder of any Note.
Neither Company may assign its rights or obligations hereunder without the prior
written consent of all Banks.
Section 11.10. Participants. Each Bank shall have the right at its
own cost to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the Loans made by such Bank and in such Bank's
Commitment at any time and from time to time to one or more other financial
institutions, provided that no such participant shall have any rights under this
Agreement or any Note (the participant's rights against the Bank granting its
participation to be those set forth in the participation agreement between the
participant and such Bank), no such Bank shall be relieved of its obligations to
the Borrower under its Commitment and no such Bank shall agree with any such
participant to refrain from agreeing to waivers, amendments or modifications
hereunder or under the Notes without the consent of such participant except for
waivers, amendments and modifications which pursuant to the terms of Section
11.13 hereof require the consent of all Banks. Each such Bank shall be entitled
to the benefits of Sections 2.7, 2.10 and 3.7 hereof to the extent such Bank
would have been so entitled had no such participation been sold.
Section 11.11. Assignment Agreements. Each Bank may, from time to
time, with the written consent of the Companies and Administrative Agent (which
will not in either instance be unreasonably withheld or delayed), assign to
other financial institutions part of the indebtedness evidenced by the Notes
then owned by it together with an equivalent proportion of its obligation to
make Loans hereunder pursuant to written agreements executed by the assignor,
the assignee and the Companies, which agreements shall specify in each instance
the portion of the indebtedness evidenced by the Notes which is to be assigned
to each such assignee and the portion of the Commitment of the assignor to be
assumed by it (the "Assignment Agreements"), provided that either of the
Companies may in its sole discretion withhold its consent to any assignment by a
Bank of less than all of its Commitment if as a result thereof the assignee will
have a Commitment hereunder of less than L2,000,000. Upon the execution of each
Assignment Agreement by the assignor, the assignee and the Companies (i) such
assignee shall thereupon become a "Bank" for all purposes of this Agreement with
a Commitment in the amount set forth in such Assignment Agreement and with all
the rights, powers and obligations afforded a Bank hereunder, (ii) the assignor
shall have no further liability for funding the portion of its Commitment
assumed by such other Bank and (iii) the address for notices to such Bank shall
be as specified in the Assignment Agreement executed by it. Concurrently with
the execution and delivery of such Assignment Agreement, and upon return to the
Borrower of the outstanding Note of the assignor, the Borrower shall execute and
deliver a new Note to the assignee Bank in the amount of its Commitment and a
new Note to the assignor Bank in the amount of its
48
50
Commitment after giving effect to the reduction occasioned by such assignment,
all such Notes to constitute "Notes" for all purposes of this Agreement, and
there shall be paid to the Administrative Agent, as a condition to such
assignment, an administrative fee of $2,500 plus any reasonable out-of-pocket
costs and expenses incurred by it in effecting such assignment, such fee to be
paid by the assignor or the assignee as they may mutually agree, but under no
circumstances shall any portion of such fee be payable by or charged to the
Borrower. No provision of this Section 11.11 or of Section 11.10 hereof shall be
deemed to affect or impair the right of any Bank to pledge and assign its Note
to a Federal Reserve Bank as collateral for obligations owing such Federal
Reserve Bank or to assign its rights and obligations hereunder and under its
Note to a financial institution which is directly or indirectly wholly owned by
it without notice to or consent of the Administrative Agent or the Companies.
Section 11.12. Costs and Expenses. The Borrower agrees to pay on
demand all reasonable out-of-pocket costs and expenses of the Administrative
Agent in connection with the negotiation, preparation, execution, delivery and
syndication of this Agreement, the Notes, and the other instruments and
documents to be delivered hereunder or thereunder or in connection with the
transactions contemplated hereby or thereby or in connection with any consents
hereunder or thereunder or waivers or amendments hereto or thereto, including
the reasonable fees and out-of-pocket expenses of counsel for the Administrative
Agent with respect to all of the foregoing, and all reasonable costs and
expenses (including reasonable attorneys' fees), incurred by the Administrative
Agent, the Banks or any other holders of a Note in connection with a default or
the enforcement of this Agreement or the Notes and the other instruments and
documents to be delivered hereunder or thereunder. The Companies agree to
indemnify and save harmless the Banks and the Agents from any and all
liabilities, losses, costs and expenses incurred by the Banks or the Agents in
connection with any action, suit or proceeding brought against the Banks, the
Agents or any of them by any Person which arises out of the transactions
contemplated or financed hereby or by the Notes or out of any action or inaction
by the Agents or Banks or any of them hereunder, except for such thereof as is
caused by the gross negligence or willful misconduct of the party to be
indemnified. The provisions of this Section 11.12 and the protective provisions
of Sections 2 and 3.6 hereof shall survive payment of the Notes.
Section 11.13. Amendments and Waivers. No provision of this
Agreement may be amended or waived except in writing signed by the Companies and
the Required Banks and, if the rights or duties of any Agent are affected
thereby, by such Agent; provided that no such amendment or waiver shall, unless
signed by all Banks, (i) increase or extend any Commitment or subject any Bank
to any additional obligation, (ii) reduce the principal of or rate of interest
on any Loan or any fees due a Bank hereunder, (iii) change the stated time or
manner of any payment of principal of or interest on any Loan or any fees due a
Bank hereunder, (iv) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the number of Banks,
49
51
required for the Banks or any of them to take any action under this Section
11.13 or any other provisions of this Agreement or (v) amend, modify or waive
Section 1.1, 2.6, 2.7, 2.8 or 2.9, 3.7, 6.17, 7, 11.5, 11.6, 11.10, 11.11, 11.12
or 11.13 hereof.
Section 11.14. Governing Law. This Agreement and the Notes, and the
rights and duties of the parties hereto, shall be construed and determined in
accordance with the laws of the State of New York.
Section 11.15. Entire Agreement. This Agreement constitutes the
entire understanding of the parties with respect to the subject matter hereof
and any prior agreements, whether written or oral, with respect thereto are
superseded hereby.
Section 11.16. Headings and Severability. Section headings used in
this Agreement are for reference only and shall not affect the construction of
this Agreement. Any provision of this Agreement which is unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 11.17. Waiver of Jury Trial. EACH OF THE COMPANIES, THE
AGENTS AND THE BANKS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
Section 11.18. Judgment Currency. If for any reason (including any
judgment, order or award) any obligation or liability of the Borrower hereunder
or under the Note is or becomes dischargeable other than in immediately
available, freely transferable Pounds Sterling then as a separate and distinct
indemnity and obligation and cause of action the Borrower shall pay on demand to
the Agent the amount by which the obligation and liability of the Borrower
hereunder or under the Note denominated in Pounds Sterling exceeds the amount of
Pounds Sterling which the Agent could purchase with the amount of the funds in
which the obligation or liability in question is dischargeable as of the close
of business on the day the payment of such other funds to the Agent is made.
Section 11.19. Pounds Sterling/U.S. Dollar. All references herein
to "L" shall be references to Pounds Sterling and all references herein to "$"
shall be references to U.S. Dollars.
50
52
Section 11.20. Change of Currency. If more than one currency or
currency unit are at the same time recognized by the central bank of any country
as the lawful currency of that country, then:
(i) any reference in this Agreement to, and any obligations arising
under this Agreement in, the currency of that country shall be translated into,
or paid in, the currency or currency unit of that country designated by the
Administrative Agent; and
(ii) any translation from one currency or currency unit to another
shall be at the official rate of exchange recognized by the central bank for the
conversion of that currency or currency unit into the other, rounded up or down
by the Administrative Agent acting reasonably.
If any change in any currency of a country occurs, this Agreement will
be amended to the extent the Documentation Agent specifies to be necessary to
reflect the change in the currency and to put the Banks in the same position, so
far as possible, that they would have been in if no change in currency had
occurred.
Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall be a contract between us for the purposes hereinabove set forth.
Executed and delivered at New York, New York as of this 10th day of
July 1996.
51
53
PM HOLDINGS, INC.
(CORPORATE SEAL)
/s/ Xxxxxxx X. Xxxxxxxx
By ------------------------------
Xxxxxxx X. Xxxxxxxx
Its Authorized Representative
Attest:
/s/ Xxxxx X. Xxxxxxx
_________________________________
Xxxxx X. Xxxxxxx
Secretary
PHOENIX HOME LIFE MUTUAL INSURANCE
COMPANY
(CORPORATE SEAL)
By Xxxxx X. Xxxxxxxx
----------------------------------
Xxxxx X. Xxxxxxxx
Its Executive Vice President
Attest:
Xxxxxxxx X. Xxxxxxx
----------------------------
Xxxxxxxx X. Xxxxxxx
Assistant Secretary
54
Exhibit 10.23
Accepted and agreed to as of the day and year last above written.
Address and Amount and Percentage of
Commitment:
000 Xxxxxxx Xxxxxx FIRST NATIONAL BANK OF BOSTON
Xxxxxx, Xxxxxxxxxxxxx 00000 individually and as Agent
Attn: Xxxxxxx X. Xxxxxxx (01-10-07)
Telephone: (000)000-0000
Facsimile: (617) By /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxx
Its Vice President
------------------------
and
First National Bank of Boston
Bank of Boston House
P.O. Box 155
9 Victoria Street
London, SW1H OED
Commitment: Lending Office:
L.10,000,000 First National Bank of Boston
Bank of Boston House
Commitment Percentage: 50% X.X. Xxx 000
00 Xxxxxxxx Xxxxxx
Xxxxxx, XX0X OED
0 Xxxxxxxxxxx XXXXXXXX XXXX XX XXXXXX
Xxxxxx, XX0X 0XX
Attn: Loans Administration By /s/ Xxxxx Xxxxxx
Telephone: 000-000-0000 --------------------------
Facsimile: 171-545-4638 Xxxxx Xxxxxx
Its Senior Associate Director
--------------------------
By /s/ Xxxxx Xxxxxxx
--------------------------
Xxxxx Xxxxxxx
Its Director
--------------------------
Commitment: Lending Office:
L.10,000,000 DEUTSCHE BANK AG LONDON
6 Bishopsgate
Commitment Percentage: 50% Xxxxxx, XX0X 0XX
55
EXHIBIT A
PROMISSORY NOTE
L________________________ July 10, 0000
Xxx Xxxx, Xxx Xxxx
FOR VALUE RECEIVED, the undersigned, PM HOLDINGS, INC., a Connecticut
corporation (the "Borrower") promises to pay to the order of ________________
_______________ (the "Bank") at the office of The First National Bank of Boston
specified pursuant to the Credit Agreement referred to below, the principal sum
of ___________________________ Pounds Sterling (L_______________) or, if less,
the aggregate unpaid principal amount of all Loans made by the Bank to the
Borrower under its Commitment provided for under the Credit Agreement
hereinafter mentioned and with each Eurocurrency Loan to mature and become
payable on the last day of the Interest Period applicable thereto, but in no
event later than the Termination Date, together with interest on the principal
amount of each Loan from time to time outstanding hereunder at the rates, and
payable in the manner and on the dates, specified in said Credit Agreement.
The Bank shall record on its books or records or on a schedule to this
Note which is a part hereof the principal amount of each Loan, all payments of
principal and interest and the principal balances from time to time outstanding,
whether such Loan is an Eurocurrency Loan and, in the case of any such
Eurocurrency Loan, the interest rate and Interest Period applicable thereto;
provided that prior to the transfer of this Note all such amounts shall be
recorded on a schedule attached to this Note. The record thereof, whether shown
on such books or records or on a schedule to this Note, shall be prima facie
evidence as to all such amounts; provided, however, that the failure of the Bank
to record any of the foregoing or any error therein shall not limit or otherwise
affect the obligations of the Borrower hereunder or under the Credit Agreement.
This Note is one of the Notes referred to in and issued under that
certain Credit Agreement dated as of July 10, 1996, between the Borrower,
Phoenix Home Life Mutual Insurance Company, as Guarantor, The First National
Bank of Boston, as Administrative Agent, Deutsche Bank AG London, as
Documentation Agent, and the Banks named therein, as amended from time to time
(the "Credit Agreement"), and this Note and the holder hereof are entitled to
all of the benefits provided for thereby or referred to therein, to which Credit
Agreement reference is hereby made for a statement thereof. All defined terms
used in this Note, except terms otherwise defined herein, shall have the same
meaning as such terms have in the Credit Agreement.
Prepayments may be made on the Loans evidenced hereby and this Note
(and the Loans evidenced hereby) may be declared or may become due prior to the
expressed maturity thereof, all in the events, on the terms and in the manner as
provided for in the Credit Agreement. This Note shall be construed in accordance
with and governed by the laws of the State of New York.
PM HOLDINGS, INC.
By
Its
54
56
EXHIBIT B
BORROWING CERTIFICATE
The First National Bank of Boston for itself and as Administrative
Agent for the Banks from time to time party to the Credit Agreement
dated July 10, 1996 with PM Holdings, Inc., as Borrower and Phoenix
Home Life Mutual Insurance Company, as Guarantor
Attention: _______________
Gentlemen:
We refer to the Term Credit Agreement dated as of July 10, 1996 as
currently in effect between us, as amended from time to time (the "Credit
Agreement"), capitalized terms used without definition below to have the
meanings ascribed to them in the Credit Agreement. We hereby confirm our request
for Loans to be made to us in the aggregate principal amount of
L________________ to be funded by the Banks under the Credit Agreement on
_____________ with an Interest Period expiring on __________ and in that regard
represent to you that each of the conditions to Borrowing set forth in
subsections (b), (c) and (d) of Section 5.1 of the Credit Agreement is
satisfied.
Dated as of this ____ day of ______________, 199_____.
PM HOLDINGS, INC.
By
Its
55
57
EXHIBIT C
DESCRIPTION OF CLOSING OPINION
OF COUNSEL FOR THE COMPANIES
The closing opinion of counsel for the Companies, called for by the
Credit Agreement, shall be addressed to the Banks from time to time party to the
Credit Agreement, and shall be to the effect that:
Unless otherwise defined therein, capitalized terms used therein shall
have the meanings assigned to such terms in the Credit Agreement.
Such counsel has reviewed the corporate proceedings taken by the
Companies in connection with the Credit Agreement and the instruments and the
transactions contemplated thereby. In addition, such counsel has examined and
relied upon copies of the Credit Agreement, the Articles of Incorporation and
the Bylaws of the Companies as in effect on the date of such opinion, copies of
supporting resolutions adopted by the Board of Directors of the Companies and
the transactions contemplated thereby and certificates executed by officers of
the Companies addressing facts material to such counsel's opinions as such
counsel considers necessary or appropriate for the basis of the opinions
expressed.
In making the examination of such agreements and instruments in
connection with the opinions expressed herein, such counsel has assumed the
genuineness of all signatures (other than those on behalf of the Companies) and
the authenticity of all documents submitted to such counsel as originals and the
conformity with the originals of all documents submitted to such counsel as
copies and has further assumed that each of the Banks has the corporate power to
enter into and perform its obligations under the Credit Agreement and has
assumed with respect to each of them due authorization by all requisite
corporate action, due execution and delivery and the valid and binding effect of
such documents and agreements, and compliance by the Banks with applicable law.
Such counsel may further assume that each Note issued by the Borrower
on the date of such opinion is identical save the name, address and the like of
each Bank and the amount of the Commitment of such Bank.
Based upon the foregoing and such other assumptions as are set forth
therein, such counsel shall opine that:
56
58
(1) The Companies are each a corporation, duly incorporated,
legally existing and in good standing under the laws of the State of their
incorporation, and the Companies have corporate power and authority and are duly
authorized to enter into and perform the Credit Agreement and, in the case of
the Borrower, to issue the Notes and incur the indebtedness to be evidenced
thereby, and to conduct their business substantially as now conducted.
(2) The execution, delivery and performance by the Companies of the
Credit Agreement and the issuance by the Borrower of the Notes thereunder do not
conflict with or result in any breach of any of the provisions of or constitute
a default under or result in the creation or imposition of any Lien upon any of
the Property of the Companies or of any Primary Subsidiary pursuant to the
provisions of the Certificate of Incorporation or By-laws of the Companies or
any Primary Subsidiary, nor to the best of the knowledge and belief of such
counsel, under any material agreement or other instrument to which the Companies
or any Primary Subsidiary is bound.
(3) The Credit Agreement has been duly authorized, executed and
delivered by the Companies and constitutes the legal, valid and binding contract
and agreement of the Companies enforceable in accordance with its terms, except
as such terms may be limited by bankruptcy, insolvency or similar laws, and
legal and equitable principles, affecting or limiting the enforcement of
creditors' rights generally. The Notes have each been duly authorized, executed
and delivered by the Borrower and each constitutes the legal, valid and binding
contract and agreement of the Borrower enforceable in accordance with its terms,
except as such terms may be limited by bankruptcy, insolvency or similar laws
and legal and equitable principles affecting or limiting the enforcement of
creditor's rights generally.
(4) To the best knowledge of such counsel, there are no proceedings
pending or threatened against or affecting the Companies or any Primary
Subsidiary in any court or before any governmental authority or arbitration
board or tribunal, not heretofore disclosed to the Banks, which question the
validity or enforceability of the Credit Agreement or the Notes or involve the
reasonable possibility of materially and adversely affecting the properties,
business, prospects, profits or condition (financial or otherwise) of the
Companies and the Primary Subsidiaries taken as a whole.
(5) The execution and delivery of the Credit Agreement and the
Notes, Borrowings under the Credit Agreement and performance by the Companies of
their obligations under the Credit Agreement and the Notes will not violate any
provision of law or any order of any court or governmental authority or agency
known to such counsel.
(6) No approval, consent or withholding of objection of or on the
part of, or filing, registration or qualification with, any Federal or State
governmental body is
57
59
necessary in connection with the execution and delivery or performance of the
Credit Agreement or the issuance and delivery of the Notes thereunder or for the
validity or enforceability of the Credit Agreement and the Notes.
(7) The Guarantor owns all of the issued and outstanding capital
stock of the Primary Subsidiaries free of any liens or encumbrances.
With respect to matters of fact on which such opinion is based, said
counsel may reasonably rely on appropriate certificates of public officials and
officers of the Companies if counsel states that he has no reason to believe
such certificates are inaccurate. Said opinion is limited to the laws of the
United States of America and the States of New York and Connecticut.
Such opinion shall be delivered to the Banks under the Credit Agreement
for their use and the use of their respective counsel, participants and
assignees only. Such opinion may contain other reasonable assumptions and
qualifications approved by the Administrative Agent and its counsel.
58
60
EXHIBIT D
CERTAIN TAX ASSESSMENTS
NONE
59
61
SCHEDULE I
ASSOCIATED COSTS RATE
The Associated Costs Rate to compensate the Banks for the cost
attributable to funding any Loan for any period for which such cost is to be
computed under this Agreement resulting from the imposition from time to time by
the Bank of England (or other governmental authorities or agencies) of a
requirement or request to place deposits with the Bank of England, for the
payment of special deposits and the maintenance of secured call money with
certain financial institutions or otherwise to comply with the monetary control
requirements of the Bank of England from time to time, will be the rate
determined by the Administrative Agent to be equal to the rate calculated on the
first day of the relevant period and for the duration of such period (but, in
respect of such a period of longer than three months, on a three monthly basis
during such period) by application of the following formula:
Associated) = BY + L(Y-X) + S(Y-Z)
---------------------
Costs Rate) 100 - (B + S) % per annum
Where:
B = The percentage of the Administrative Agent's London Branch's
eligible liabilities from time to time required to be held on deposit account
with the Bank of England pursuant to the cash ratio requirements of the Bank of
England.
Y = The rate at which Pound Sterling deposits in an amount comparable
to the relevant Loan are offered to the London Branch of the Administrative
Agent in the London interbank market at or about 11:00 a.m. (London time) on the
relevant day of its Interest Period and for a period comparable to such Interest
Period.
L = The average percentage of eligible liabilities the Bank of England
from time to time requires the London Branch of the Administrative Agent to
maintain as secured money with members of the London Discount Market Association
and/or as secured call money with those market makers in money and gilt-edged
securities recognized by the Bank of England.
X = The rate at which secured Sterling deposits in an amount comparable
to the relevant Loan may be placed by the London Branch of the Administrative
Agent members of the London Discount Market Association and/or as secured call
money with market makers in money and gilt-edged securities of the relevant day
of its Interest Period and for a period comparable to such Interest Period.
S = The percentage of the Administrative Agent's London Branch's
eligible liabilities from time to time required to be placed as a special
deposit with the Bank of England.
Z = The percentage interest rate per annum allowed by the Bank of
England on special deposits.
60
62
In the application of the above formula, B, Y, L, X, S and Z will be
included in the formula as figures and not as percentages, e.g., if B = 0.5% and
Y = 15%, BY will be calculated as 0.5 x 15 and not as 0.5% x 15%.
Calculations will be made on the basis of a 365 day year for each
Interest Period.
If no quotation is supplied by the Administrative Agent in relation to
the determination of the Associated Costs Rate, the Administrative Agent shall
determine such rate itself on the same basis as set forth above save that any
reference in the definitions of "B", "L", "X", and "S" to the "relevant
Administrative Agent" shall be deemed to be references to the Administrative
Agent.
In the event of any change in circumstances (including the imposition
of alternative or additional official requirements) which renders the above
formula inapplicable, unrepresentative or inadequate, the Administrative Agent
shall notify the Borrower of the manner in which the Associated Costs Rate shall
be determined thereafter.
61
63
SCHEDULE II
DEFINITION OF THE FLOATING RATE
The Floating Rate to compensate the Banks for the cost attributable to
funding any Loan for any period for which such cost is to be computed under this
Agreement will be the rate determined by the cost incurred by each Bank to fund
such Loan.
62
