SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 28, 1996
Aetna Life and Casualty Company
(Exact name of registrant as specified in its charter)
Connecticut 001-05704 06-0843808
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
151 Farmington Avenue
Hartford, CT 06156
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code 860-273-0123
Not Applicable
(Former name or former address, if changed since last report)
Item 5. Other Information.
Standard & Poor's announced on July 16, 1996 that it had lowered the claims
paying rating of Aetna Life Insurance Company from A+ to A and had lowered
the claims paying rating of Aetna Life Insurance and Annuity Company from AA
to AA-. Standard & Poor's affirmed the senior debt and commercial paper
ratings of Aetna Life and Casualty Company and removed Aetna's ratings from
credit watch.
As of June 28, 1996, Aetna Life and Casualty Company entered into a
$2,500,000,000 Credit Agreement. A copy of the Credit Agreement is attached
hereto as Exhibit 1, which exhibit is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits.
1. $2,500,000,000 Credit Agreement dated as of June 28, 1996 among Aetna
Life and Casualty Company, as Borrower, Aetna Inc., as Guarantor,
The Banks Listed therein and Morgan Guaranty Trust Company of New
York, as Administrative Agent
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Aetna Life and Casualty Company
Date: July 16, 1996 By: /s/ Robert J. Price
---------------------------
Name: Robert J. Price
Title: Vice President and
Corporate Controller
(Chief Accounting
Officer)
CONFORMED COPY
==============================================================================
$2,500,000,000
CREDIT AGREEMENT
dated as of
June 28, 1996
among
Aetna Life and Casualty Company,
as Borrower
Aetna Inc.,
as Guarantor
The Banks Listed Herein
and
Morgan Guaranty Trust Company of New York,
as Administrative Agent
J.P. Morgan Securities Inc., Arranger
Deutsche Bank AG, New York Branch, Syndication and
Documentation Agent
Chase Securities Inc., Co-Syndication Agent
and
Citicorp Securities Inc., Co-Syndication Agent
==============================================================================
TABLE OF CONTENTS*
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions.............................................. 1
1.02 Accounting Terms and Determinations...................... 15
1.03 Classifications of Borrowings............................ 16
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments to Lend...................................... 16
2.02 Notice of Committed Borrowings........................... 16
2.03 Money Market Borrowings.................................. 17
2.04 Notice to Banks; Funding of Loans........................ 21
2.05 Notes.................................................... 22
2.06 Maturity of Loans........................................ 23
2.07 Termination or Reduction of
Commitments........................................ 23
2.08 Interest Rates........................................... 24
2.09 Fees..................................................... 28
2.10 Method of Electing Interest Rates........................ 28
2.11 Optional Prepayments..................................... 31
2.12 General Provisions as to Payments........................ 31
2.13 Funding Losses........................................... 32
2.14 Computation of Interest and Fees......................... 33
2.15 Regulation D Compensation................................ 33
ARTICLE III
CONDITIONS
SECTION 3.01 Effectiveness............................................ 34
3.02 Borrowings............................................... 35
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*The Table of Contents is not a part of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Corporate Existence and Power............................ 36
4.02 Corporate and Governmental
Authorization; No Contravention...................... 36
4.03 Binding Effect........................................... 37
4.04 Financial Information.................................... 37
4.05 Litigation............................................... 38
4.06 Compliance with ERISA.................................... 38
4.07 Principal Subsidiaries................................... 38
4.08 Compliance with Laws..................................... 39
ARTICLE V
COVENANTS
SECTION 5.01 Information.............................................. 39
5.02 Conduct of Business and
Maintenance of Existence............................. 40
5.03 Minimum Adjusted Consolidated Net
Worth................................................ 41
5.04 Equal and Ratable Lien Protection........................ 41
5.05 Consolidations, Mergers and Sales
of Assets............................................ 41
5.06 Use of Proceeds.......................................... 42
5.07 Cross Default Provisions................................. 42
5.08 Compliance with Laws..................................... 42
5.09 Merger Agreement......................................... 42
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default........................................ 43
6.02 Notice of Default........................................ 45
ARTICLE VII
THE AGENT
SECTION 7.01 Appointment and Authorization............................ 45
7.02 Agent and Affiliates..................................... 46
7.03 Action by Agent.......................................... 46
7.04 Consultation with Experts................................ 46
7.05 Liability of Agent....................................... 46
7.06 Indemnification.......................................... 47
7.07 Credit Decision.......................................... 47
7.08 Successor Agent.......................................... 47
7.09 Agent's Fees............................................. 48
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01 Basis for Determining Interest
Rate Inadequate or Unfair............................ 48
8.02 Illegality............................................... 49
8.03 Increased Cost and Reduced Return........................ 49
8.04 Taxes.................................................... 51
8.05 Base Rate Loans Substituted for
Affected Euro-Dollar Loans........................... 54
8.06 Substitution of Bank..................................... 54
8.07 Election to Terminate.................................... 55
Article IX Guaranty................................................. 55
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Notices................................................. 57
10.02 No Waivers.............................................. 58
10.03 Expenses; Indemnification............................... 58
10.04 Amendments and Waivers.................................. 59
10.05 Successors and Assigns.................................. 59
10.06 New York Law............................................ 61
10.07 Counterparts; Integration............................... 61
10.08 WAIVER OF JURY TRIAL.................................... 62
10.09 Waiver under Pre-Existing Credit
Agreements...................................... 62
Exhibit A - Note
Exhibit B - Form of Money Market Quote Request
Exhibit C - Form of Invitation for Money Market Quotes
Exhibit D - Form of Money Market Quote
Exhibit E-1 - Opinion of John W. Campbell, Esq.
Exhibit E-2 - Opinion of Davis Polk & Wardwell
Exhibit F - Opinion of Cravath, Swaine & Moore
CREDIT AGREEMENT
AGREEMENT dated as of June 28, 1996 among AETNA LIFE AND
CASUALTY COMPANY (to be renamed Aetna Services, Inc.), AETNA INC., the BANKS
listed on the signature pages hereof, and MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used
herein, have the following meanings:
"Absolute Rate Auction" means a solicitation of Money
Market Quotes setting forth Money Market Absolute Rates pursuant to Section
2.03.
"Adjusted CD Rate" has the meaning set forth in Section
2.08(b).
"Adjusted Consolidated Net Worth" means at any date the
total shareholders' equity of the Parent Company and its Consolidated
Subsidiaries determined as of such date, adjusted to exclude net unrealized
capital gains and losses.
"Administrative Questionnaire" means, with respect to
each Bank, the administrative questionnaire in the form submitted to such
Bank by the Agent and submitted to the Agent (with a copy to the Borrower)
duly completed by such Bank.
"Affiliate" means any bank which (i) directly or
indirectly, wholly owns, is wholly owned by or shares common one hundred
percent ownership with the transferor Bank and (ii) is of credit rating
better than or equal to that of the transferor Bank on the Effective Date,
as determined by Moody's and S&P. "Agent" means Morgan Guaranty Trust
Company of New York in its capacity as Administrative Agent for the Banks
hereunder, and its successors in such capacity.
"Applicable Lending Office" means, with respect to any
Bank, (i) in the case of its Base Rate Loans and CD Loans, its Domestic
Lending Office, (ii) in the case of its Euro-Dollar Loans, its Euro-Dollar
Lending Office and (iii) in the case of its Money Market Loans, its Money
Market Lending Office.
"Assessment Rate" has the meaning set forth in Section
2.08(b).
"Assignee" has the meaning set forth in Section 10.05(c).
"Bank" means each bank listed on the signature pages
hereof and its successors and Assignees.
"Base Rate" means, for any day, a rate per annum equal to
the higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1%
plus the Federal Funds Rate for such day.
"Base Rate Loan" means (i) a Committed Loan which bears
interest at the Base Rate pursuant to the applicable Notice of Committed
Borrowing or a Notice of Interest Rate Election or the provisions of
Article VIII or (ii) an overdue amount which was a Base Rate Loan
immediately before it became overdue.
"Borrower" means Aetna Life and Casualty Company, a
Connecticut corporation, and its successors. It is anticipated that the
Borrower's name will be changed to Aetna Services, Inc.
"Borrower's 1995 Form 10-K" means (i) the Borrower's
annual report on Form 10-K for 1995 and (ii) the Borrower's current reports
on Form 8-K dated March 30, 1996 and April 2, 1996, in each case as filed
with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended.
"Borrower's 1996 First Quarter Form 10-Q" means the
Borrower's quarterly report for the fiscal quarter ended March 31, 1996 as
filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended.
"Borrowing" means a borrowing hereunder consisting of
Loans made to the Borrower at the same time by the Banks pursuant to
Article II. A Borrowing is a "Base Rate Borrowing" if such Loans are Base
Rate Loans, a "CD Borrowing" if such Loans are CD Loans, a "Euro-Dollar
Borrowing" if such Loans are Euro-Dollar Loans and a "Money Market
Borrowing" if such Loans are Money Market Loans.
"CD Base Rate" has the meaning set forth in Section
2.08(b).
"CD Loan" means (i) a Committed Loan which bears interest
at the Fixed CD Rate pursuant to the applicable Notice of Committed
Borrowing or a Notice of Interest Rate Election or (ii) an overdue amount
which was a CD Loan immediately before it became overdue.
"CD Margin" has the meaning set forth in Section 2.08(b).
"CD Reference Banks" means The Chase Manhattan Bank,
N.A., Citibank, N.A., Deutsche Bank AG, New York Branch, and Morgan
Guaranty Trust Company of New York.
"Commitment" means, with respect to each Bank, the amount
set forth opposite the name of such Bank on the signature pages hereof, as
such amount may be reduced from time to time pursuant to Section 2.07,
terminated pursuant to Section 8.07 or changed pursuant to 10.05(c).
"Committed Loan" means a loan made by a Bank pursuant to
Section 2.01; provided that, if any such loan or loans (or portions
thereof) are combined or subdivided pursuant to a Notice of Interest Rate
Election, the term "Committed Loan" shall refer to the combined principal
amount resulting from such combination or to each of the separate principal
amounts resulting from such subdivision, as the case may be.
"Consolidated Subsidiary" means at any date any
Subsidiary or other entity the accounts of which would be consolidated with
those of the Parent Company in its consolidated financial statements if
such statements were prepared as of such date.
"Continuing Director" means, at any time, a director who
(i) was a director of the Borrower 24 months prior to such time, in the
case of any determination of Continuing Directors prior to the Merger Date,
or, in the case of any such determination on or after the Merger Date, was
a director of the Guarantor at the later of the Merger Date and 24 months
prior to such time of determination or (ii) was nominated or elected as a
director by vote of a majority of the persons who were Continuing Directors
at the time of such nomination or election.
"Default" means any condition or event which constitutes
an Event of Default or which with the giving of notice or lapse of time or
both would, unless cured or waived, become an Event of Default.
"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in New York City are
authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its
office located at its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Domestic Lending
Office) or such other office as such Bank may hereafter designate as its
Domestic Lending Office by notice to the Borrower and the Agent; provided
that any Bank may so designate separate Domestic Lending Offices for its
Base Rate Loans, on the one hand, and its CD Loans, on the other hand, in
which case all references herein to the Domestic Lending Office of such
Bank shall be deemed to refer to either or both of such offices, as the
context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or
both.
"Domestic Reserve Percentage" has the meaning set forth
in Section 2.08(b).
"Duff" means Duff & Phelps Inc.
"Effective Date" means the date this Agreement becomes
effective in accordance with Section 3.01.
"Environmental Laws" means any and all federal, state,
local and foreign statutes, laws, judicial decisions, regulations,
ordinances, rules judgments, orders, decrees, plans, injunctions, permits,
concessions, grants, franchises, licenses, agreements and other
governmental restrictions relating to the environment, the effect of the
environment on human health or to emissions, discharges or releases of
pollutants, contaminants, Hazardous Substances or wastes into the
environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
"ERISA Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated)
under common control which, together with the Borrower, are treated as a
single employer under Section 414 of the Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business
Day on which commercial banks are open for international business
(including dealings in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its
office, branch or affiliate located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative
Questionnaire as its Euro-Dollar Lending Office) or such other office,
branch or affiliate of such Bank as it may hereafter designate as its Euro-
Dollar Lending Office by notice to the Borrower and the Agent.
"Euro-Dollar Loan" means (i) a Committed Loan which bears
interest at a Euro-Dollar Rate pursuant to the applicable Notice of
Committed Borrowing or a Notice of Interest Rate Election or (ii) an
overdue amount which was a Euro-Dollar Loan immediately before it became
overdue.
"Euro-Dollar Margin" has the meaning set forth in Section
2.08(c).
"Euro-Dollar Rate" means a rate of interest determined
pursuant to Section 2.08(c) on the basis of the London Interbank Offered
Rate.
"Euro-Dollar Reference Banks" means The Chase Manhattan
Bank, N.A., Citibank, N.A., Deutsche Bank AG and Morgan Guaranty Trust
Company of New York.
"Euro-Dollar Reserve Percentage" means, for any day, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor), for determining the maximum reserve requirement for a member
bank of the Federal Reserve System in New York City with deposits exceeding
five billion dollars in respect of "Eurocurrency liabilities" (or in
respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Euro-Dollar Loans is determined or
any category of extensions of credit or other assets which includes loans
by a non-United States office of any Bank to United States residents).
"Event of Default" has the meaning set forth in Section
6.01.
"Federal Funds Rate" means, for any day, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) equal
to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New
York on the Domestic Business Day next succeeding such day, provided that
(i) if such day is not a Domestic Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding
Domestic Business Day as so published on the next succeeding Domestic
Business Day, and (ii) if no such rate is so published on such next
succeeding Domestic Business Day, the Federal Funds Rate for such day shall
be the average rate quoted to Morgan Guaranty Trust Company of New York on
such day on such transactions as calculated by the Agent, such calculation
to be supplied to the Borrower upon the Borrower's request.
"Fixed CD Rate" has the meaning set forth in Section
2.08(b).
"Fixed Rate Borrowing" means a CD Borrowing, a Euro-
Dollar Borrowing or a Money Market Borrowing.
"Fixed Rate Loans" means Euro-Dollar Loans, CD Loans or
Money Market Loans (excluding Money Market LIBOR Loans bearing interest at
the Base Rate for the reason stated in Section 8.01) or any combination of
the foregoing.
"Group of Loans" or "Group" means at any time a group of
Loans consisting of (i) all Committed Loans which are Base Rate Loans at
such time, (ii) all Committed Loans which are CD Loans having the same
Interest Period at such time or (iii) all Committed Loans which are Euro-
Dollar Loans having the same Interest Period at such time; provided that,
if Committed Loans of any particular Bank are converted to or made as Base
Rate Loans pursuant to Article VIII, such Loans shall be included in the
same Group or Groups of Loans from time to time as they would have been in
if they had not been so converted or made.
"Guarantor" means Aetna Inc., a Connecticut corporation,
and its successors.
"Hazardous Substances" means any toxic, radioactive,
caustic or otherwise hazardous substance, including petroleum, its
derivatives, by-products and other hydrocarbons, or any substances having
any constituent elements displaying any of the foregoing characteristics.
"Interest Period" means:
(1) with respect to each Base Rate Borrowing, the period commencing on the
date of such Borrowing and ending on the next succeeding Quarterly Date;
provided that any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(2) with respect to each CD Borrowing, the period commencing on the date of
such Borrowing and ending 30, 60, 90 or 180 days thereafter, as the
Borrower may elect in the applicable Notice of Borrowing or such longer
period as mutually agreed to by the Borrower and all of the Banks; provided
that:
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to
the next succeeding Euro-Dollar Business Day;
(b) any Interest Period which would otherwise end after
the Termination Date shall end on the Termination Date.
(3) with respect to each Euro-Dollar Loan, a period commencing on the date
of Borrowing specified in the applicable Notice of Committed Borrowing or
on the date specified in the applicable Notice of Interest Rate Election
and ending one, two, three or six months thereafter, as the Borrower may
elect in the applicable Notice or such longer period as mutually agreed to
by the Borrower and all of the Banks; provided that:
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to
the next succeeding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-
Dollar Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall, subject to clause (c)
below, end on the last Euro-Dollar Business Day of a calendar
month; and
(c) any Interest Period which would otherwise end after
the Termination Date shall end on the Termination Date.
(4) with respect to each Money Market LIBOR Loan, the period commencing on
the date of Borrowing and ending such whole number of months thereafter, as
the Borrower may elect in accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to
the next succeeding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-
Dollar Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall, subject to clause (c)
below, end on the last Euro-Dollar Business Day of a calendar
month; and
(c) any Interest Period which would otherwise end after
the Termination Date shall end on the Termination Date.
(5) with respect to each Money Market Absolute Rate Loan, the period
commencing on the date of Borrowing and ending such number of days
thereafter (but not less than 7 days) as the Borrower may elect in
accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to
the next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after
the Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code
of 1986, as amended, or any successor statute.
"Invitation for Money Market Quotes" means an invitation
from the Agent to the Banks to submit Money Market Quotes pursuant to
Section 2.03(c).
"Level I Period" means any period during which any long-
term Senior Unsecured Debt of the Borrower has ratings that are better than
or equal to at least two of the following three ratings: (i) AA- by S&P
and/or (ii) Aa3 by Moody's and/or (iii) AA- by Duff; provided that if S&P
or Moody's or Duff changes its rating system after the date hereof, the new
rating of such rating agency that most closely corresponds to the level
specified above for such rating agency shall be substituted for such level.
"Level II Period" means any period (other than a Level I
Period) during which any long-term Senior Unsecured Debt of the Borrower
has ratings that are better than or equal to at least two of the following
three ratings: (i) A+ by S&P and/or (ii) A1 by Moody's and/or (iii) A+
by Duff; provided that if S&P or Moody's or Duff changes its rating system
after the date hereof, the new rating of such rating agency that most
closely corresponds to the level specified above for such rating agency
shall be substituted for such level.
"Level III Period" means any period (other than a Level I
Period or a Level II Period) during which any long-term Senior Unsecured
Debt of the Borrower has ratings which are better than or equal to at least
two of the following three ratings: (i) A by S&P and/or (ii) A2 by
Moody's and/or
(iii) A by Duff; provided that if S&P or Moody's or Duff changes its
rating system after the date hereof, the new rating of such agency that
most closely corresponds to the level specified above for such rating
agency shall be substituted for such level.
"Level IV Period" means any period (other than a Level I
Period, Level II Period or Level III Period) during which any long-term
Senior Unsecured Debt of the Borrower has ratings which are better than or
equal to at least two of the following three ratings: (i) A- by S&P
and/or (ii) A3 by Moody's and/or (iii) A- by Duff; provided that if S&P
or Moody's or Duff changes its rating system after the date hereof, the new
rating of such agency that most closely corresponds to the level specified
above for such rating agency shall be substituted for such level.
"Level V Period" means any period (other than a Level I
Period, Level II Period, Level III Period or Level IV Period) during which
any long-term Senior Unsecured Debt of the Borrower has ratings which are
better than or equal to at least two of the following three ratings: (i)
BBB+ by S&P and/or (ii) Baa1 by Moody's and/or (iii) BBB+ by Duff;
provided that if S&P or Moody's or Duff changes its rating system after the
date hereof, the new rating of such agency that most closely corresponds to
the level specified above for such rating agency shall be substituted for
such level.
"Level VI Period" means any period (other than a Level I
Period, Level II Period, Level III Period, Level IV Period or Level V
Period) during which any long-term Senior Unsecured Debt of the Borrower
has ratings which are better than or equal to at least two of the following
three ratings: (i) BBB by S&P and/or (ii) Baa2 by Moody's and/or (iii)
BBB by Duff; provided that if S&P or Moody's or Duff changes its rating
system after the date hereof, the new rating of such agency that most
closely corresponds to the level specified above for such rating agency
shall be substituted for such level.
"Level VII Period" means any period (other than a Level I
Period, Level II Period, Level III Period, Level IV Period, Level V Period
or Level VI Period) during which any long-term Senior Unsecured Debt of the
Borrower has ratings which are better than or equal to at least two of the
following three ratings: (i) BBB- by S&P and/or (ii) Baa3 by Moody's
and/or (iii) BBB- by Duff; provided that if S&P or Moody's or Duff changes
its rating system after the date hereof, the new rating of such agency that
most closely corresponds to the level specified above for such rating
agency shall be substituted for such level.
"Level VIII Period" means any period other than a Level I
Period, Level II Period, Level III Period, Level IV Period, Level V Period,
Level VI Period or Level VII Period.
"LIBOR Auction" means a solicitation of Money Market
Quotes setting forth Money Market Margins based on the London Interbank
Offered Rate pursuant to Section 2.03.
"Loan" means a Base Rate Loan, a Euro-Dollar Loan, a CD
Loan or a Money Market Loan and "Loans" means any combination of the
foregoing.
"London Interbank Offered Rate" has the meaning set forth
in Section 2.08(c).
"Merger Agreement" means the Agreement and Plan of Merger
dated as of March 30, 1996, among the Borrower, USHI, the Guarantor and two
wholly-owned subsidiaries of the Guarantor, as amended.
"Merger Certificate" means a certificate executed by an
executive officer of each of the Borrower and the Guarantor, certifying (i)
that the Merger Transactions have been (or, on the date of execution and
delivery of such certificate, are being) consummated in all material
respects in accordance with the Merger Agreement, (ii) that the Guarantor
owns all the outstanding shares of capital stock of each of the Borrower
and USHI and (iii) if such certificate is executed and delivered more than
120 days after the date of this Agreement, that since March 31, 1996, there
has been no material adverse change in the business, financial position or
results of operations of the Guarantor and its Consolidated Subsidiaries
(including USHI and the Borrower), taken as a whole.
"Merger Date" means the date on which the Merger
Certificate is delivered to the Agent.
"Merger Transactions" means (i) the merger of a wholly-
owned subsidiary of the Guarantor into USHI, with the result that (a) USHI
survives as a wholly-owned subsidiary of the Guarantor and (b) the
stockholders of USHI are entitled to receive consideration as set forth in
the Merger Agreement and (ii) the merger of a wholly-owned subsidiary of
the Guarantor into the Borrower, with the result that (a) the Borrower
survives as a wholly-owned subsidiary of the Guarantor and (b) the
stockholders of the Borrower are entitled to receive consideration as set
forth in the Merger Agreement.
"Money Market Absolute Rate" has the meaning set forth in
Section 2.03(d).
"Money Market Absolute Rate Loan" means a loan made or to
be made by a Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its
Domestic Lending Office or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Money Market Lending Office by
notice to the Borrower and the Agent; provided that any Bank may from time
to time by notice to the Borrower and the Agent designate separate Money
Market Lending Offices for its Money Market LIBOR Loans, on the one hand,
and its Money Market Absolute Rate Loans, on the other hand, in which case
all references herein to the Money Market Lending Office of such Bank shall
be deemed to refer to either or both of such offices, as the context may
require.
"Money Market LIBOR Loan" means a loan made or to be made
by a Bank pursuant to a LIBOR Auction (including such a loan bearing
interest at the Base Rate for the reason stated in Section 8.01).
"Money Market Loan" means a Money Market LIBOR Loan or a
Money Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in
Section 2.03(d).
"Money Market Quote" means an offer by a Bank to make a
Money Market Loan in accordance with Section 2.03.
"Money Market Quote Request" means a request by the
Borrower to the Banks to make Money Market Loans in accordance with Section
2.03(b).
"Moody's" means Moody's Investors Service, Inc.
"Non-Recourse Indebtedness" means indebtedness for
borrowed money as to which the liability of the Borrower, the Guarantor or
the Principal Subsidiaries, as the case may be, is limited solely to
specific assets.
"Notes" means promissory notes of the Borrower,
substantially in the form of Exhibit A hereto, evidencing the obligation of
the Borrower to repay the Loans, and "Note" means any one of such
promissory notes issued hereunder.
"Notice of Borrowing" means a Notice of Committed
Borrowing (as defined in Section 2.02) or a Notice of Money Market
Borrowing (as defined in Section 2.03(f)).
"Notice of Interest Rate Election" has the meaning set
forth in Section 2.10.
"Obligations" has the meaning set forth in Article IX.
"Other Taxes" has the meaning set forth in Section
8.04(a).
"Parent Company" means (i) prior to the Merger Date, the
Borrower, or (ii) on and after the Merger Date, the Guarantor.
"Participant" has the meaning set forth in Section
10.05(d).
"PBGC" means the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.
"Plan" means at any time an employee pension benefit plan
which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Internal Revenue Code and is either (i)
maintained by a member of the ERISA Group for employees of a member of the
ERISA Group or (ii) maintained pursuant to a collective bargaining
agreement or any other arrangement under which more than one employer makes
contributions and to which a member of the ERISA Group is then making or
accruing an obligation to make contributions or has within the preceding
five plan years made contributions.
"Prime Rate" means the rate of interest publicly
announced by Morgan Guaranty Trust Company of New York in New York City
from time to time as its Prime Rate.
"Principal Subsidiary" means (i) Aetna Life Insurance
Company, (ii) Aetna Life Insurance and Annuity Company, (iii) on and after
the Merger Date, USHI, or (iv) any other Subsidiary of the Parent Company,
including Subsidiaries of Subsidiaries, which shall succeed by merger or
otherwise to a major part of the business of one or more of the Principal
Subsidiaries. For the purposes of this definition the decision as to
whether a Subsidiary shall have succeeded to a major part of the business
of one or more Principal Subsidiaries shall be made in good faith by the
Parent Company's Board of Directors by the adoption of a resolution so
stating.
"Quarterly Date" means the last Domestic Business Day of
each January, April, July and October.
"Reference Banks" means The Chase Manhattan Bank, N.A.,
Citibank, N.A., Deutsche Bank AG, New York Branch, and Morgan Guaranty
Trust Company of New York, and "Reference Bank" means any one of such
Reference Banks.
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having at least
66 2/3% of the aggregate amount of the Commitments or, if the Commitments
shall have been terminated, holding Notes evidencing at least 66 2/3% of
the aggregate unpaid principal amount of the Loans.
"Required Capital" has the meaning set forth in Section
8.03(b).
"Responsible Financial Officer" means chief financial
officer, treasurer, chief accounting officer or senior corporate finance
officer.
"Revolving Credit Period" means the period from the date
hereof to and including the Termination Date.
"S&P" means Standard & Poor's, a division of The McGraw
Hill Companies.
"Senior Unsecured Debt" means indebtedness for borrowed
money that is not subordinated to any other indebtedness for borrowed money
and is not secured or supported by a guarantee, letter of credit or other
form of credit enhancement; provided that, after the Merger Date, "Senior
Unsecured Debt" may include any such indebtedness that is guaranteed by the
Guarantor.
"Subsidiary" means any corporation or other entity of
which securities or other ownership interests having ordinary voting power
to elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by the
Parent Company.
"Taxes" has the meaning set forth in Section 8.04(a).
"Termination Date" means June 28, 2001, or, if such day
is not a Euro-Dollar Business Day, the next preceding Euro-Dollar Business
Day.
"Trigger Event" has the meaning set forth in Section
8.03(c).
"USHI" means U.S. Healthcare, Inc., a Pennsylvania
corporation, and its successors.
SECTION 1.02. Accounting Terms and Determinations.
Unless otherwise specified herein, all accounting terms used herein shall
be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be
prepared in accordance with United States generally accepted accounting
principles as in effect from time to time, applied on a basis consistent
(except for changes concurred in by the Parent Company's independent public
accountants) with the most recent audited consolidated financial statements
of the Borrower and its Consolidated Subsidiaries (or, on and after the
date of delivery to the Banks of audited consolidated financial statements
of the Guarantor covering or including any period subsequent to the Merger
Date, the most recent audited consolidated financial statements of the
Guarantor and its Consolidated Subsidiaries) delivered to the Banks.
SECTION 1.03. Classifications of Borrowings. Borrowings
are classified for purposes of this Agreement either by reference to the
pricing of Loans comprising such Borrowing (e.g., a "Euro-Dollar Borrowing"
is a Borrowing comprised of Euro-Dollar Loans) or by reference to the
provisions of Article II under which participation therein is determined
(i.e., a "Committed Borrowing" is a Borrowing under Section 2.01 in which
all Banks participate in proportion to their Commitments, while a "Money
Market Borrowing" is a Borrowing under Section 2.03 in which the Bank
participants are determined on the basis of their bids).
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. On the terms and conditions
set forth in this Agreement, each Bank severally agrees to lend to the
Borrower, from time to time during the Revolving Credit Period, amounts not
to exceed in the aggregate at any one time outstanding the amount of such
Bank's Commitment. Each Borrowing under this Section 2.01 shall be in an
aggregate principal amount of $25,000,000 or any larger multiple of
$1,000,000 (except that any such Borrowing may be in the aggregate amount
of the unused Commitments) and shall be made from the several Banks ratably
in proportion to their respective Commitments. Within the foregoing
limits, the Borrower may borrow under this Section, repay, or to the extent
permitted by Section 2.11, prepay Loans and reborrow at any time during the
Revolving Credit Period under this Section. Failure by any Bank to make
Loans as required under the terms of this Agreement will not relieve any
other Bank of its obligations hereunder.
SECTION 2.02. Notice of Committed Borrowings. The
Borrower shall give the Agent notice (a "Notice of Committed Borrowing")
not later than 10:30 A.M. (New York City time) on (x) the date of each
Base Rate Borrowing, (y) the second Domestic Business Day before each CD
Borrowing and (z) the third Euro-Dollar Business Day before each Euro-
Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or a CD
Borrowing and a Euro-Dollar Business Day in the case of a Euro-
Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to be
CD Loans, Base Rate Loans or Euro-Dollar Loans, and
(d) in the case of a CD Borrowing or Euro-Dollar
Borrowing, the duration of the initial Interest Period applicable
thereto, subject to the provisions of the definition of Interest
Period.
SECTION 2.03. Money Market Borrowings.
(a) The Money Market Option. In addition to Committed
Borrowings pursuant to Section 2.01, the Borrower may, as set forth in this
Section, request the Banks from time to time during the Revolving Credit
Period to make offers to make Money Market Loans to the Borrower. The
Banks may, but shall have no obligation to, make such offers and the
Borrower may, but shall have no obligation to, accept any such offers in
the manner set forth in this Section.
(b) Money Market Quote Request. When the Borrower
wishes to request offers to make Money Market Loans under this Section, it
shall transmit to the Agent by telex or facsimile transmission a Money
Market Quote Request substantially in the form of Exhibit B hereto so as to
be received no later than 10:00 A.M. (New York City time) on (x) the
fourth Euro-Dollar Business Day prior to the date of Borrowing proposed
therein, in the case of a LIBOR Auction or (y) the Domestic Business Day
next preceding the date of Borrowing proposed therein, in the case of an
Absolute Rate Auction (or, in either case, such other time or date as the
Borrower and the Agent shall have mutually agreed upon and shall have
notified to the Banks not later than the date of the Money Market Quote
Request for the first LIBOR Auction or Absolute Rate Auction for which such
change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day in the case of a LIBOR Auction or a
Domestic Business Day in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall
be $25,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of Interest
Period, and
(iv) whether the Money Market Quotes requested are to set
forth a Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more than
one Interest Period in a single Money Market Quote Request. No Money
Market Quote Request shall be given within five Euro-Dollar Business Days
(or following notice to each of the Banks, such other number of days as the
Borrower and the Agent may agree upon) of any other Money Market Quote
Request.
(c) Invitation for Money Market Quotes. Promptly upon
receipt of a Money Market Quote Request, the Agent shall send to the Banks
by telex or facsimile transmission an Invitation for Money Market Quotes
substantially in the form of Exhibit C hereto, which shall constitute an
invitation by the Borrower to each Bank to submit Money Market Quotes
offering to make the Money Market Loans to which such Money Market Quote
Request relates in accordance with this Section.
(d) Submission and Contents of Money Market Quotes. (i)
Each Bank may submit a Money Market Quote containing an offer or offers to
make Money Market Loans in response to any Invitation for Money Market
Quotes. Each Money Market Quote must comply with the requirements of this
subsection (d) and must be submitted to the Agent by telex or facsimile
transmission at its offices specified in or pursuant to Section 10.01 not
later than (x) 9:30 A.M. (New York City time) on the third Euro-Dollar
Business Day prior to the proposed date of Borrowing, in the case of a
LIBOR Auction or (y) 9:30 A.M. (New York City time) on the proposed date
of Borrowing, in the case of an Absolute Rate Auction (or, in either case,
such other time or date as the Borrower and the Agent shall have mutually
agreed and shall have notified to the Banks not later than the date of the
Money Market Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective); provided that Money
Market Quotes submitted by the Agent (or any affiliate of the Agent) in the
capacity of a Bank may be submitted, and may only be submitted, if the
Agent or such affiliate notifies the Borrower of the terms of the offer or
offers contained therein not later than (x) 9:15 A.M. (New York City time)
on the third Euro-Dollar Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction or (y) 9:15 A.M. (New York City
time) on the proposed date of Borrowing, in the case of an Absolute Rate
Auction. Subject to Articles III and VI, any Money Market Quote so made
shall be irrevocable except with the written consent of the Agent given on
the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the
form of Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for
which each such offer is being made, which principal amount (x)
may be greater than or less than the Commitment of the quoting
Bank, (y) must be $25,000,000 or a larger multiple of $1,000,000
and (z) may not exceed the principal amount of Money Market Loans
for which offers were requested,
(C) in the case of a LIBOR Auction, the margin above or
below the applicable London Interbank Offered Rate (the "Money
Market Margin") offered for each such Money Market Loan, expressed
as a percentage (rounded to the nearest 1/10,000th of 1%) to be
added to or subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of
interest per annum (rounded to the nearest 1/10,000th of 1%) (the
"Money Market Absolute Rate") offered for each such Money Market
Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the
quoting Bank with respect to each Interest Period specified in the related
Invitation for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit D
hereto or does not specify all of the information required by
subsection (d)(ii);
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set
forth in the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection
(d)(i).
(e) Notice to Borrower. The Agent shall promptly notify
the Borrower of the terms (x) of any Money Market Quote submitted by a Bank
that is in accordance with subsection (d) and (y) of any Money Market Quote
that amends, modifies or is otherwise inconsistent with a previous Money
Market Quote submitted by such Bank with respect to the same Money Market
Quote Request. Any such subsequent Money Market Quote shall be disregarded
by the Agent unless such subsequent Money Market Quote is submitted solely
to correct a manifest error in such former Money Market Quote. The Agent's
notice to the Borrower shall specify (A) the aggregate principal amount of
Money Market Loans for which offers have been received for each Interest
Period specified in the related Money Market Quote Request, (B) the
respective principal amounts and Money Market Margins or Money Market
Absolute Rates, as the case may be, so offered (including the names of the
Banks) and (C) if applicable, limitations on the aggregate principal amount
of Money Market Loans for which offers in any single Money Market Quote for
any Interest Period may be accepted.
(f) Acceptance and Notice by Borrower. Not later than
10:30 A.M. (New York City time) on (x) the third Euro-Dollar Business Day
prior to the proposed date of Borrowing, in the case of a LIBOR Auction or
(y) the proposed date of Borrowing, in the case of an Absolute Rate Auction
(or, in either case, such other time or date as the Borrower and the Agent
shall have mutually agreed upon and shall have notified to the Banks not
later than the date of the Money Market Quote Request for the first LIBOR
Auction or Absolute Rate Auction for which such change is to be effective),
the Borrower shall notify the Agent of its acceptance or non-acceptance of
the offers so notified to it pursuant to subsection (e). In the case of
acceptance, such notice (a "Notice of Money Market Borrowing") shall
specify the aggregate principal amount of offers for each Interest Period
that are accepted. The Borrower may accept any Money Market Quote for any
Interest Period in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the
related Money Market Quote Request,
(ii) the principal amount of each Money Market Borrowing
must be $25,000,000 or a larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the basis
of ascending Money Market Margins or Money Market Absolute Rates,
as the case may be, and
(iv) the Borrower may not accept any offer that is
described in subsection (d)(iii) or that otherwise fails to comply
with the requirements of this Agreement.
(g) Allocation by Agent. If offers are made by two or
more Banks with the same Money Market Margins or Money Market Absolute
Rates, as the case may be, for a greater aggregate principal amount than
the amount in respect of which such offers are accepted for the related
Interest Period, the principal amount of Money Market Loans in respect of
which such offers are accepted shall be allocated by the Agent among such
Banks as nearly as possible (in multiples of such number, not greater than
$1,000,000 as the Agent may deem appropriate) in proportion to the
aggregate principal amounts of such offers. Determinations by the Agent of
the pro rata amounts of Money Market Loans shall be conclusive in the
absence of manifest error.
SECTION 2.04. Notice to Banks; Funding of Loans. (a)
Upon receipt of a Notice of Borrowing, the Agent shall promptly notify each
Bank of the contents thereof and of such Bank's share (if any) of such
Borrowing and such Notice of Borrowing shall not thereafter be revocable by
the Borrower.
(b) Not later than 12:00 Noon (New York City time) on
the date of each Borrowing, each Bank participating therein shall make
available its share of such Borrowing, in Federal or other funds
immediately available in New York City, to the Agent at its address
specified in or pursuant to Section 10.01. Unless the Agent determines
that any applicable condition specified in Article III has not been
satisfied, the Agent will make the funds so received from the Banks
available to the Borrower at the Agent's aforesaid address.
(c) Unless the Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make
available to the Agent such Bank's share of such Borrowing, the Agent may
assume that such Bank has made such share available to the Agent on the
date of such Borrowing in accordance with subsection (b) of this Section
2.04 and the Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent
that such Bank shall not have so made such share available to the Agent,
such Bank and the Borrower severally agree to repay to the Agent forthwith
on demand such corresponding amount together with interest thereon, for
each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Agent, at (i) in the case of the
Borrower, a rate per annum equal to the higher of the Federal Funds Rate
and the interest rate applicable thereto pursuant to Section 2.08 and (ii)
in the case of such Bank, the Federal Funds Rate. If such Bank shall repay
to the Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for purposes of this
Agreement.
SECTION 2.05. Notes. (a) The Loans of each Bank shall
be evidenced by a single Note payable to the order of such Bank in an
amount equal to the aggregate unpaid principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the
Agent, request that its Loans of a particular type be evidenced by a
separate Note in an amount equal to the aggregate unpaid principal amount
of such Loans. Each such Note shall be in substantially the form of
Exhibit A hereto with appropriate modifications to reflect the fact that it
evidences solely Loans of the relevant type. Each reference in this
Agreement to the "Note" of such Bank shall be deemed to refer to and
include any or all of such Notes, as the context may require.
(c) Upon receipt of each Bank's Note pursuant to Section
3.01(b), the Agent shall forward such Note to such Bank. Each Bank shall
record the date, amount and maturity of each Loan made by it and the date
and amount of each payment of principal made by the Borrower with respect
thereto, and prior to any transfer of its Note shall endorse on the
schedule forming a part thereof appropriate notations to evidence the
foregoing information with respect to each such Loan then outstanding;
provided that the failure of any Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or
under the Notes. Each Bank is hereby irrevocably authorized by the
Borrower so to endorse its Note and to attach to and make a part of its
Note a continuation of any such schedule as and when required.
(d) Each Bank agrees that it will cancel and return to
the Borrower all Notes then held by it upon the earlier of (i) the
Termination Date provided no Default shall have then occurred and be
continuing or (ii) the date such Bank's Commitment has been terminated and
there are no Loans outstanding to or accrued interest owing to such Bank.
SECTION 2.06. Maturity of Loans. (a) The Committed
Loans of each Bank shall mature, and the principal amount thereof shall be
due and payable, together with accrued interest thereon, on the Termination
Date.
(b) Each Money Market Loan shall mature, and the
principal amount thereof shall be due and payable, together with accrued
interest thereon, on the last day of the Interest Period applicable to such
Money Market Loan.
SECTION 2.07. Termination or Reduction of Commitments.
(a) The Commitments of each Bank shall terminate at the end of the
Revolving Credit Period.
(b) During the Revolving Credit Period the Borrower may,
upon at least three Domestic Business Days' notice to the Agent, terminate
the Commitments at any time, if no Loans are outstanding at such time.
(c) During the Revolving Credit Period the Borrower may,
upon at least three Domestic Business Days' notice to the Agent, ratably
reduce the Commitments from time to time by an aggregate amount of
$25,000,000 or any larger multiple of $1,000,000, but only to the extent
that the aggregate amount of the Commitments exceeds the aggregate
outstanding principal amount of the Loans.
SECTION 2.08. Interest Rates. (a) Each Base Rate Loan
shall bear interest on the outstanding principal amount thereof, for each
day from the date such Loan is made until it becomes due, at a rate per
annum equal to the Base Rate for such day. Such interest shall be payable
for each Interest Period on the earlier of (i) the last day of the Interest
Period applicable thereto or (ii) the Termination Date. Any overdue
principal of and, to the extent permitted by law, overdue interest on any
Base Rate Loan shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the sum of 1% plus the Base Rate for such
day.
(b) Each CD Loan shall bear interest on the outstanding
principal amount thereof, for each Interest Period applicable thereto, at a
rate per annum equal to the applicable Fixed CD Rate. Such interest shall
be payable for each Interest Period on the earlier of (i) the last day of
the Interest Period applicable thereto, (ii) 90 days after the initial date
thereof and, if such Interest Period is longer than 90 days, at intervals
of 90 days thereafter or (iii) the Termination Date. Any overdue principal
of and, to the extent permitted by law, overdue interest on any CD Loan
shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the sum of 1% plus the higher of (i) the Fixed CD Rate
applicable to such Loan and (ii) the rate applicable to Base Rate Loans for
such day.
The "Fixed CD Rate" applicable to any CD Loan for any
Interest Period means a rate per annum equal to the sum of the CD Margin
plus the applicable Adjusted CD Rate.
"CD Margin" means (i) 0.250% during each Level I Period,
(ii) 0.255% during each Level II Period, (iii) 0.270% during each Level III
Period, (iv) 0.285% during each Level IV Period, (v) 0.325% during each
Level V Period, (vi) 0.375% during each Level VI Period, (vii) 0.450%
during each Level VII Period and (viii) 0.675% during each Level VIII
Period.
The "Adjusted CD Rate" applicable to any Interest Period
means a rate per annum determined pursuant to the following formula:
[ CDBR ]* ACDR = [ ---------- ] + AR [ 1.00 -
DRP ]
ACDR = Adjusted CD Rate CDBR = CD Base Rate DRP =
Domestic Reserve Percentage AR = Assessment Rate
* The amount in brackets being rounded upwards, if necessary, to the next
higher 1/100 of 1%.
The "CD Base Rate" applicable to any Interest Period is
the rate of interest determined by the Agent to be the arithmetic average
(rounded upward, if necessary, to the next higher 1/100 of 1%) of the
prevailing rates per annum bid at 10:00 A.M. (New York City time) (or as
soon thereafter as practicable) on the first day of such Interest Period by
two or more New York certificate of deposit dealers of recognized standing
for the purchase at face value from each Reference Bank of its certificates
of deposit in an amount comparable to the unpaid principal amount of the CD
Loan of such Reference Bank to which such Interest Period applies and
having a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including
without limitation any basic, supplemental or emergency reserves) for a
member bank of the Federal Reserve System in New York City with deposits
exceeding five billion dollars in respect of new non-personal time deposits
in dollars in New York City having a maturity comparable to the related
Interest Period and in an amount of $100,000 or more. The Fixed CD Rate
shall be adjusted automatically on and as of the effective date of any
change in the Domestic Reserve Percentage.
"Assessment Rate" means for any Interest Period the net
annual assessment rate (rounded upwards, if necessary, to the next higher
1/100 of 1%) actually incurred by Morgan Guaranty Trust Company of New York
to the Federal Deposit Insurance Corporation (or any successor) for such
Corporation's (or such successor's) insuring time deposits at offices of
Morgan Guaranty Trust Company of New York in the United States during the
most recent period for which such rate has been determined prior to the
commencement of such Interest Period.
(c) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for each Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin
plus the applicable London Interbank Offered Rate. Such interest shall be
payable for each Interest Period on the earlier of (i) the last day
thereof, (ii) three months after the initial date thereof and, if such
Interest Period is longer than three months, at intervals of three months
thereafter or (iii) the Termination Date.
"Euro-Dollar Margin" means (i) 0.125% during each Level I
Period, (ii) 0.130% during each Level II Period, (iii) 0.145% during each
Level III Period, (iv) 0.160% during each Level IV Period, (v) 0.200%
during each Level V Period, (vi) 0.250% during each Level VI Period, (vii)
0.325% during each Level VII Period and (viii) 0.550% during each Level
VIII Period.
The "London Interbank Offered Rate" applicable to any
Interest Period means the average (rounded upward, if necessary, to the
next higher 1/16 of 1%) of the respective rates per annum at which deposits
in dollars are offered to each of the Euro-Dollar Reference Banks in the
London interbank market at approximately 11:00 A.M. (London time) two
Euro-Dollar Business Days before the first day of such Interest Period in
an amount approximately equal to the principal amount of the Euro-Dollar
Loan of such Euro-Dollar Reference Bank to which such Interest Period is to
apply and for a period of time comparable to such Interest Period.
(d) Any overdue principal of and, to the extent
permitted by law, overdue interest on any Euro-Dollar Loan shall bear
interest, payable on demand, for each day from and including the date
payment thereof was due to but excluding the date of actual payment, at a
rate per annum equal to the sum of 1% plus the Euro-Dollar Margin plus the
higher of (i) the London Interbank Offered Rate applicable to such Loan and
(ii) the average (rounded upward, if necessary, to the next higher 1/100 of
1%) of the respective rates per annum at which one day (or, if such amount
due remains unpaid more than three Euro-Dollar Business Days, then for such
other period of time not longer than three months as the Agent may select)
deposits in dollars in an amount approximately equal to such overdue
payment due to each of the Reference Banks are offered to such Reference
Bank in the London interbank market for the applicable period determined as
provided above (or, if the circumstances described in Section 8.01 shall
exist, at a rate per annum equal to the sum of 1% plus the Base Rate for
such day).
(e) Subject to clause (y) of Section 8.01, each Money
Market LIBOR Loan shall bear interest on the outstanding principal amount
thereof, for the Interest Period applicable thereto, at a rate per annum
equal to the sum of the London Interbank Offered Rate for such Interest
Period (determined in accordance with Section 2.08(c) as if each Reference
Bank were to participate in the related Money Market LIBOR Borrowing
ratably in proportion to its Commitment) plus (or minus) the Money Market
Margin quoted by the Bank making such Loan in accordance with Section 2.03.
Each Money Market Absolute Rate Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a
rate per annum equal to the Money Market Absolute Rate quoted by the Bank
making such Loan in accordance with Section 2.03. Such interest shall be
payable for each Interest Period on the earlier of (i) the last day
thereof, (ii) three months after the initial date thereof and, if such
Interest Period is longer than three months, at intervals of three months
thereafter or (iii) the Termination Date. Any overdue principal of and, to
the extent permitted by law, overdue interest on any Money Market Loan
shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the sum of 1% plus the Base Rate for such day.
(f) The Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give prompt notice to
the Borrower by telecopy and the participating Banks by telex, cable or
telecopy of each rate of interest so determined, and its determination
thereof shall be conclusive in the absence of manifest error.
(g) Each Reference Bank agrees to use its best efforts
to furnish quotations to the Agent as contemplated by this Section. If any
Reference Bank does not furnish a timely quotation, the Agent shall
determine the relevant interest rate on the basis of the quotation or
quotations furnished by the remaining Reference Bank or Banks or, if none
of such quotations is available on a timely basis, the provisions of
Section 8.01 shall apply.
SECTION 2.09. Fees.
(a) Facility Fee. The Borrower shall pay to the Agent
for the account of the Banks ratably in proportion to their Commitments, a
facility fee at the rate of (i) 0.065% per annum during each Level I
Period, (ii) 0.070% per annum during each Level II Period, (iii) 0.080% per
annum during each Level III Period, (iv) 0.090% per annum during each Level
IV Period, (v) 0.100% per annum during each Level V Period, (vi) 0.125%
during each Level VI Period, (vii) 0.150% during each Level VII Period and
(viii) 0.200% during each Level VIII Period. Such facility fee shall
accrue (i) from and including the date on which the conditions set forth in
Section 3.01(a) and (e) have been satisfied to but excluding the last day
of the Revolving Credit Period, in each case, on the daily average
aggregate amount of the Commitments (whether used or unused) and (ii) if
any Loans remain outstanding after the Revolving Credit Period, from and
including the last day of the Revolving Credit Period to but excluding the
date such Loans shall be repaid in full, on the daily average aggregate
outstanding principal amount of such Loans. Notwithstanding the foregoing,
the aggregate amount of the Commitments on which the facility fee shall
accrue shall be limited to $1,000,000,000 until the earlier of the Merger
Date and the date that is one month after the date of this Agreement, at
which time such facility fee shall commence to accrue without regard to
such limitation. During the period that facility fees are reduced by
reason of the preceding sentence, the Banks shall share such reduction
ratably in proportion to their Commitments.
(b) Payments. Except as otherwise indicated, accrued
fees under this Section shall be payable quarterly in arrears on (i) each
Quarterly Date, (ii) the Termination Date and (iii) if any Loans remain
outstanding after the Revolving Credit Period, the date such Loans shall be
repaid in full.
SECTION 2.10. Method of Electing Interest Rates. (a)
The Loans included in each Committed Borrowing shall bear interest
initially at the type of rate specified by the Borrower in the applicable
Notice of Committed Borrowing. Thereafter, the Borrower may from time to
time elect to change or continue the type of interest rate borne by each
Group of Loans (subject in each case to the provisions of Article VIII), as
follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect
to convert such Loans to CD Loans as of any Domestic Business Day
or Euro-Dollar Loans as of any Euro-Dollar Business Day;
(ii) if such Loans are CD Loans, the Borrower may (x) elect
to convert such Loans to Base Rate Loans as of any Domestic
Business Day, (y) elect to convert such Loans to Euro-Dollar Loans
or to CD Loans with an Interest Period different from the then
current Interest Period applicable to such Loans, as of any Euro-
Dollar Business Day or Domestic Business Day, respectively, or (z)
elect to continue such Loans as CD Loans for an additional
Interest Period beginning on the last day of the then current
Interest Period applicable to such Loans; and
(iii) if such Loans are Euro-Dollar Loans, the Borrower may
(x) elect to convert such Loans to Base Rate Loans or CD Loans as
of any Domestic Business Day, (y) elect to convert such Loans to
CD Loans or Euro-Dollar Loans with an Interest Period different
from the then current Interest Period applicable to such Loans, as
of any Domestic Business Day or Euro-Dollar Business Day,
respectively, or (z) elect to continue such Loans as Euro-Dollar
Loans for an additional Interest Period beginning on the last day
of the then current Interest Period applicable to such Loans;
provided that, if the Borrower elects to convert any CD Loans or Euro-
Dollar Loans, as the case may be, to Base Rate Loans or to CD Loans or
Euro-Dollar Loans, as the case may be, with a different Interest Period, as
of any day other than the last day of the then current Interest Period
applicable to such Loans, the Borrower shall reimburse each Bank in
accordance with Section 2.13.
Each such election shall be made by delivering a notice
(a "Notice of Interest Rate Election") to the Agent (i) at least one
Domestic Business Day before such notice is to be effective if the relevant
Loans are to be converted into Base Rate Loans, (ii) at least two Domestic
Business Days before such conversion or continuation is to be effective if
such Loans are to be converted into, or continued as, CD Rate Loans or
(iii) at least three Euro-Dollar Business Days before such conversion or
continuation is to be effective if such Loans are to be converted into, or
continued as, Euro-Dollar Loans.
A Notice of Interest Rate Election may, if it so
specifies, apply to only a portion of the aggregate principal amount of the
relevant Group of Loans; provided that (i) such portion is allocated
ratably among the Loans comprising such Group and (ii) the portion to which
such Notice applies, and the remaining portion to which it does not apply,
are each $25,000,000 or any larger multiple of $1,000,000.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such
notice applies;
(ii) the date on which the conversion or continuation
selected in such notice is to be effective, which shall comply
with the applicable clause of subsection (a) above;
(iii) whether such Group of Loans (or portion thereof) is
to be converted to Base Rate Loans, CD Loans or Euro-Dollar Loans
or continued as CD Loans or Euro-Dollar Loans for an additional
Interest Period; and
(iv) if such Loans (or portions thereof) are to be
converted to or continued as CD Loans or Euro-Dollar Loans, as the
case may be, the duration of the Interest Period to be applicable
thereto immediately after such conversion or continuation.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election
from the Borrower pursuant to subsection (a) above, the Agent shall
promptly notify each Bank of the contents thereof and such notice shall not
thereafter be revocable by the Borrower. If the Borrower fails to deliver
a timely Notice of Interest Rate Election to the Agent for any Group of
Fixed Rate Loans, such Loans shall be converted into Base Rate Loans on the
last day of the then current Interest Period applicable thereto.
SECTION 2.11. Optional Prepayments. (a) The Borrower
may (i) upon at least one Domestic Business Day's notice to the Agent,
prepay the Base Rate Loans (or any Money Market LIBOR Loans which bear
interest at the Base Rate at such time for the reason stated in Section
8.01), in whole or in part, on any Domestic Business Day and (ii) upon at
least two Euro-Dollar Business Days' notice to the Agent, prepay any Fixed
Rate Loan, in whole or in part, in amounts aggregating $25,000,000 or any
larger multiple of $1,000,000, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment; provided
that Money Market Loans may not be prepaid other than as contemplated by
clause (i) above. Each such optional prepayment shall be applied to prepay
ratably the relevant Loans of the several Banks. Prepayment of a Fixed
Rate Loan on any day other than the last day of an Interest Period
applicable thereto shall be subject to Section 2.13.
(b) Upon receipt of a notice of prepayment pursuant to
this Section, the Agent shall promptly notify each Bank of the contents
thereof and of such Bank's ratable share (if any) of such prepayment and
such notice shall not thereafter be revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments. (a)
The Borrower shall make each payment of principal of, and interest on, the
Loans and of fees hereunder, not later than 12:00 Noon (New York City time)
on the date when due, in Federal or other funds immediately available in
New York City, to the Agent at its address referred to in the Notes. The
Agent will promptly distribute to each Bank its ratable share of each such
payment received by the Agent for the account of the Banks. Whenever any
payment of principal of, or interest on, any Base Rate Loans, CD Loans or
fees shall be due on a day which is not a Domestic Business Day, the date
for payment thereof shall be extended to the next succeeding Domestic
Business Day. Whenever any payment of principal of, or interest on, the
Euro-Dollar Loans and Money Market LIBOR Loans shall be due on a day which
is not a Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day unless such Euro-
Dollar Business Day falls in another calendar month, in which case the date
for payment thereof shall be the next preceding Euro-Dollar Business Day.
Whenever any payment of principal of, or interest on, the Money Market
Absolute Loans shall be due on a day which is not a Euro-Dollar Business
Day, the date for payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day. If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon shall be
payable for such extended time.
(b) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks
hereunder that the Borrower will not make such payment in full, the Agent
may assume that the Borrower has made such payment in full to the Agent on
such date and the Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to the amount
then due such Bank. If and to the extent that the Borrower shall not have
so made such payment, each Bank shall repay to the Agent forthwith on
demand such amount distributed to such Bank together with interest thereon,
for each day from the date such amount is distributed to such Bank until
the date such Bank repays such amount to the Agent, at the Federal Funds
Rate.
SECTION 2.13. Funding Losses. If the Borrower makes any
payment of principal with respect to any Fixed Rate Loan or any Fixed Rate
Loan is converted to another Loan (pursuant to Section 2.10, Section 2.11,
Article VI or Article VIII) on any day other than the last day of an
Interest Period applicable thereto or the end of an applicable period fixed
pursuant to Section 2.08(d), or if any Bank assigns any Fixed Rate Loan as
required by Section 8.06 on any day other than the last day of an Interest
Period applicable thereto, or if the Borrower fails to borrow or prepay any
Fixed Rate Loan after notice has been given to any Bank in accordance with
Section 2.04(a) or Section 2.11, the Borrower shall reimburse each Bank
within 15 days after demand for any resulting loss or expense incurred by
it (or by an existing or prospective Participant in the related Loan),
including (without limitation) any loss reasonably incurred in obtaining,
liquidating or employing deposits from third parties, but excluding loss of
margin for the period after such payment or conversion or assignment or
failure to borrow or prepay, provided that such Bank shall have delivered
to the Borrower a certificate as to the amount of such loss or expense with
an explanation of the calculation of such loss or expense, which
certificate shall be conclusive if made reasonably and in good faith.
SECTION 2.14. Computation of Interest and Fees.
Interest based on the Prime Rate hereunder shall be computed on the basis
of a year of 365 days (or 366 days in a leap year) and paid for the actual
number of days elapsed (including the first day but excluding the last
day). All other interest and facility fees hereunder shall be computed on
the basis of a year of 360 days and paid for the actual number of days
elapsed (including the first day but excluding the last day).
SECTION 2.15. Regulation D Compensation. For each day
for which a Bank is required to maintain reserves in respect of either (x)
"Eurocurrency Liabilities" (as defined in all regulations of the Board of
Governors of the Federal Reserve System) or (y) any other category of
liabilities which includes deposits by reference to which the interest rate
in Euro-Dollar Loans is determined or any category of extensions of credit
or other assets which includes loans by a non-United States office of any
Bank to United States residents, such Bank may require the Borrower to pay,
contemporaneously with each payment of interest on the Euro-Dollar Loans,
additional interest on the related Euro-Dollar Loan of such Bank at a rate
per annum determined by such Bank up to but not exceeding the excess of (i)
(A) the applicable London Interbank Offered Rate divided by (B) one minus
the Euro-Dollar Reserve Percentage over (ii) the applicable London
Interbank Offered Rate. Any Bank wishing to require payment of such
additional interest (x) shall so notify the Borrower and the Agent, in
which case such additional interest on the Euro-Dollar Loans of such Bank
shall be payable to such Bank at the place indicated in such notice with
respect to each Interest Period commencing at least five Euro-Dollar
Business Days after the giving of such notice and (y) shall notify the
Borrower at least five Euro-Dollar Business Days prior to each date on
which interest is payable on the Euro-Dollar Loans of the amount then due
to such Bank under this Section. Such Bank's notice to the Borrower shall
set forth its calculation of such additional interest and such calculation
shall be conclusive if made reasonably and in good faith.
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement shall
become effective on the date that all of the following conditions shall
have been satisfied (or waived in accordance with Section 10.04):
(a) receipt by the Agent from each of the parties hereto
of either (i) a counterpart hereof signed by such party or (ii)
telegraphic, telex or other written confirmation, in form
satisfactory to the Agent, confirming that a counterpart hereof
has been signed by such party;
(b) receipt by the Agent for the account of each Bank of
a duly executed Note dated on or before the Effective Date
complying with the provisions of Section 2.05;
(c) receipt by the Agent of a certificate signed by the
Vice Chairman for Strategy and Finance or the Vice President,
Corporate Finance of each of the Borrower and the Guarantor, dated
the Effective Date, to the effect that (i) no Default has occurred
and is continuing as of the Effective Date, (ii) the
representations and warranties of the Borrower and the Guarantor
set forth in Article IV hereof are true in all material respects
on, and as of, the Effective Date and (iii) the Borrower has
terminated, effective on or prior to the Effective Date, all
commitments under the Short-Term Credit Agreement and the Medium-
Term Credit Agreement, each dated as of July 27, 1994, among the
Borrower, the banks party thereto and Morgan Guaranty Trust
Company of New York, as agent for such banks, and has repaid all
amounts outstanding thereunder;
(d) receipt by the Agent of an opinion of John W.
Campbell, Esq., counsel to the Borrower and the Guarantor and
given upon the Borrower's and the Guarantor's express
instructions, and of Davis Polk & Wardwell, special counsel to the
Borrower and the Guarantor, and given upon the Borrower's and the
Guarantor's express instructions substantially in the forms of
Exhibits E-1 and E-2 hereto, respectively;
(e) receipt by the Agent of an opinion of Cravath, Swaine
& Moore, special counsel to the Agent, substantially in the form
of Exhibit F hereto; and
(f) receipt by the Agent of all documents it may
reasonably request relating to the existence of the Borrower and
the Guarantor, the corporate authority for and the validity of
this Agreement and the Notes, and any other matters relevant
hereto, all in form and substance satisfactory to the Agent;
provided that this Agreement shall not become effective or be binding on
any party hereto unless all of the foregoing conditions are satisfied not
later than August 1, 1996. The Agent shall promptly notify the Borrower
and the Banks of the Effective Date, and such notice shall be conclusive
and binding on all parties hereto.
SECTION 3.02. Borrowings. The obligation of any Bank to
make a Loan on the occasion of any Borrowing is subject to the satisfaction
of the following conditions:
(a) receipt by the Agent of a Notice of Borrowing as
required by Section 2.02 or 2.03, as the case may be;
(b) the fact that, immediately before and immediately
after such Borrowing, no Default shall have occurred and be
continuing;
(c) the fact that immediately after such Borrowing, the
aggregate outstanding principal amount of the Loans will not
exceed (i) prior to the Merger Date, the lesser of $1,000,000,000
and the aggregate amount of the Commitments or (ii) on and after
the Merger Date, the aggregate amount of the Commitments;
(d) the fact that the representations and warranties of
the Borrower and, on and after the Merger Date, the Guarantor set
forth in Sections 4.01(i), 4.02 and 4.07(i) shall be true on and
as of the date of such Borrowing;
(e) the fact that the most recent financial statements
provided by the Borrower and, on and after the Merger Date, the
Guarantor in compliance with Section 5.01, as supplemented prior
to such Borrowing, shall be, to the best knowledge of the Borrower
and, on and after the Merger Date, the Guarantor, accurate and
complete in all material respects; and
(f) the fact that the Borrowing shall have been approved
in writing by (i) the Chairman of the Borrower or his designee.
Each Borrowing hereunder shall be deemed to be a representation and
warranty by the Borrower and, in the case of a Borrowing on or after the
Merger Date, the Guarantor on the date of such Borrowing as to the facts
specified in clauses (b), (c), (d), (e) and (f) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each of the Borrower and the Guarantor represents and
warrants that:
SECTION 4.01. Corporate Existence and Power. Each of
the Borrower and the Guarantor (i) is a Connecticut corporation duly
incorporated, validly existing and in good standing under the laws of the
State of Connecticut, (ii) has all corporate powers required to carry on
its business as now conducted and (iii) has all governmental licenses,
authorizations, consents and approvals required to carry on its business as
now conducted, the failure to obtain which would, individually or in the
aggregate, have a material adverse effect on its ability to perform its
obligations hereunder or on the financial condition of the Borrower and its
Consolidated Subsidiaries taken as a whole or, on and after the Merger
Date, on the financial condition of the Guarantor and its Consolidated
Subsidiaries taken as a whole.
SECTION 4.02. Corporate and Governmental Authorization;
No Contravention. The execution, delivery and performance by each of the
Borrower and the Guarantor of this Agreement and, in the case of the
Borrower, the Notes are within its corporate powers, have been duly
authorized by all necessary corporate action, require no action by or in
respect of, or advance filing with, any governmental body, agency or
official and do not contravene, or constitute a default under, (i) any
provision of the certificate of incorporation or by-laws of the Borrower or
the Guarantor, (ii) any applicable law or regulation or any judgment,
injunction, order or decree binding upon the Borrower or the Guarantor, or
(iii) any material financial agreement or instrument (excluding insurance
obligations) of the Borrower or the Guarantor.
SECTION 4.03. Binding Effect. This Agreement
constitutes a valid and binding agreement of each of the Borrower and the
Guarantor and the Notes, when executed and delivered in accordance with
this Agreement, will constitute valid and binding obligations of the
Borrower, in each case enforceable in accordance with its terms except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally, by
insolvency laws affecting the rights of creditors of insurance companies
generally (in the case of the Borrower) and by general principles of
equity.
SECTION 4.04. Financial Information.
(a) The consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of December 31, 1995, the related
consolidated statements of cash flows for the year then ended and
consolidated statement of income and retained earnings for the
year then ended, reported on by KPMG Peat Marwick and set forth in
the Borrower's 1995 Annual Report, copies of which have been
delivered to the Agent for distribution to each of the Banks,
fairly present, in conformity with United States generally
accepted accounting principles, the consolidated financial
position of the Borrower and its Consolidated Subsidiaries as of
such date and their consolidated results of operations and cash
flows for such year.
(b) The unaudited consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of March 31, 1996
and the related unaudited consolidated statements of income and
retained earnings and cash flows for the three months then ended,
set forth in the Borrower's 1996 First Quarter Form 10-Q, copies
of which have been delivered to the Agent for distribution to each
of the Banks, fairly present, in conformity with United States
generally accepted accounting principles applied on a basis
consistent with the financial statements referred to in subsection
(a) of this Section, the consolidated financial position of the
Borrower and its Consolidated Subsidiaries as of such date and
their consolidated results of operations and cash flows for such
three month period (subject to normal year-end adjustments).
(c) Except as disclosed in the Borrower's 1996 First
Quarter Form 10-Q, since March 31, 1996, there has been no
material adverse change in the business, financial position or
results of operations of the Borrower and its Consolidated
Subsidiaries, taken as a whole.
SECTION 4.05. Litigation. Except as disclosed in the
Borrower's 1995 Form 10-K or 1996 First Quarter Form 10-Q, there is no
action, suit or proceeding pending against, or to the knowledge of the
Borrower or the Guarantor threatened against or affecting, the Borrower,
its Consolidated Subsidiaries, the Guarantor or the Principal Subsidiaries
before any court or arbitrator or any governmental body, agency or official
in which there is a reasonable possibility of an adverse decision which
could materially adversely affect the business, consolidated financial
position or consolidated results of operations of the Borrower and its
Consolidated Subsidiaries taken as a whole or which in any manner draws
into question the validity of this Agreement or the Notes.
SECTION 4.06. Compliance with ERISA. Each member of the
ERISA Group has fulfilled its obligations under the minimum funding
standards of ERISA and the Internal Revenue Code with respect to each Plan
and is not in violation of the presently applicable provisions of ERISA and
the Internal Revenue Code where such violation would have a material
adverse effect on the financial condition of the Borrower and its
Consolidated Subsidiaries taken as a whole, and has not incurred any
liability to the PBGC or a Plan under Title IV of ERISA; provided that this
Section 4.06 applies to the members of the ERISA Group only in their
capacity as employers and not in any other capacity (such as fiduciaries or
service providers to Plans for the benefit of employers of others).
SECTION 4.07. Principal Subsidiaries. Each of the
Principal Subsidiaries (i) is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction in which
it is organized, (ii) has all corporate powers required to carry on its
business as now conducted and (iii) has all governmental licenses,
authorizations, consents and approvals required to carry on its business as
now conducted, the failure to obtain which would, individually or in the
aggregate, have a material adverse effect on the ability of the Borrower or
the Guarantor to perform its obligations hereunder or on the financial
condition of such Principal Subsidiary and its consolidated subsidiaries
taken as a whole.
SECTION 4.08. Compliance with Laws. To the best
knowledge of the Borrower and the Guarantor, each of the Borrower and the
Guarantor has complied in all material respects with all applicable laws,
except where any single failure to comply therewith would not individually
have a material adverse effect on its ability to perform its obligations
hereunder, and except where necessity of compliance therewith is being
contested in good faith by appropriate proceedings; provided, however, that
the sole representation and warranty with respect to compliance with ERISA
is limited to Section 4.06; and provided further that the reference to
applicable laws in this Section 4.08 shall not include Environmental Laws.
ARTICLE V
COVENANTS
The Borrower and, on and after the Merger Date, the
Guarantor agree that, so long as any Bank has any Commitment hereunder or
any amount payable under any Note remains unpaid:
SECTION 5.01. Information. The Borrower and the
Guarantor will deliver to the Agent, for delivery by the Agent to each of
the Banks:
(a) as soon as available and in any event within 120 days
after the end of each fiscal year of the Borrower and, after the
Merger Date, of the Guarantor, the consolidated balance sheet of
the Borrower or the Guarantor, as applicable, and its Consolidated
Subsidiaries as of the end of such fiscal year and the related
consolidated statements of earnings and of cash flows for such
fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on in a manner
acceptable to the Securities and Exchange Commission by KPMG Peat
Marwick or other independent public accountants of nationally
recognized standing;
(b) as soon as available and in any event within 60 days
after the end of each of the first three quarters of each fiscal
year of the Borrower and, after the Merger Date, of the Guarantor,
its Form 10-Q as of the end of such quarter;
(c) simultaneously with the delivery of each set of
financial statements referred to in clauses (a) and (b) above, a
certificate of a Responsible Financial Officer of the Borrower
and, after the Merger Date, of the Guarantor (i) stating whether
any Default exists on the date of such certificate and, if any
Default then exists, setting forth the details thereof and the
action which the Borrower or the Guarantor, as applicable, is
taking or proposes to take with respect thereto, and (ii) setting
forth calculations demonstrating compliance, as of the date of the
most recent balance sheet included in the financial statements
being furnished at such time, with the covenant set forth in
Section 5.03;
(d) within five days after any officer of the Borrower or
the Guarantor obtains knowledge of any Default, if such Default is
then continuing, a certificate of a Responsible Financial Officer
of the Borrower or the Guarantor setting forth the details thereof
and the action which the Borrower or the Guarantor is taking or
proposes to take with respect thereto;
(e) promptly upon the mailing thereof to the shareholders
of the Parent Company generally, copies of all financial
statements and reports, and proxy statements so mailed; and
(f) from time to time such additional publicly available
information regarding the financial position or business of the
Borrower, the Guarantor and the Principal Subsidiaries as the
Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Conduct of Business and Maintenance of
Existence. Each of the Borrower and the Guarantor will preserve, renew and
keep in full force and effect, and will cause each Principal Subsidiary to
preserve, renew and keep in full force and effect their respective
corporate existence; provided that the foregoing shall not prohibit (i) the
termination of the existence of any Principal Subsidiary if the surviving
entity (in the case of any such termination resulting from a merger or
consolidation) or the entity to which substantially all such Principal
Subsidiary's assets are transferred (in the case of any other such
termination) is or becomes a Principal Subsidiary, or (ii) any transaction
involving the Borrower or the Guarantor in accordance with Section 5.05.
SECTION 5.03. Minimum Adjusted Consolidated Net Worth.
Adjusted Consolidated Net Worth will not be less than (i) $5,000,000,000 at
any time prior to the Merger Date or (ii) $7,500,000,000 at any time on or
after the Merger Date.
SECTION 5.04. Equal and Ratable Lien Protection.
Neither the Borrower nor the Guarantor will, nor will they permit any
Principal Subsidiary to, issue, assume, incur or guarantee any indebtedness
for borrowed money secured by a mortgage, pledge, lien or other
encumbrance, directly or indirectly on any of the common stock of a
Principal Subsidiary or, on and after the Merger Date, of the Borrower,
which common stock is owned by the Guarantor, the Borrower or any Principal
Subsidiary, unless the obligations of the Borrower under this Agreement and
the Notes and, if the Borrower or the Guarantor so elects, any other
indebtedness of the Borrower or the Guarantor ranking on a parity with the
Notes or the Guarantor's obligations under Article IX, as applicable, shall
be secured equally and ratably with, or prior to, such secured indebtedness
for borrowed money so long as it is outstanding and is so secured.
SECTION 5.05. Consolidations, Mergers and Sales of
Assets. Neither the Borrower nor the Guarantor will consolidate or merge
with or into any other corporation or convey or transfer its properties and
assets substantially as an entirety to any other Person unless (i) the
surviving or acquiring entity is a corporation organized under the laws of
one of the United States, (ii) the surviving or acquiring corporation, if
other than the Borrower or the Guarantor, as applicable, expressly assumes
the performance of the obligations of the Borrower or the Guarantor, as
applicable, under this Agreement and the Notes, and (iii) immediately after
giving effect to such transaction, no Default shall exist; provided that
the foregoing shall not be construed to prevent a merger of the Borrower
with the Guarantor, in which case the survivor shall be or become both the
Borrower hereunder and the Parent Company.
SECTION 5.06. Use of Proceeds. The proceeds of the
Loans made under this Agreement will be used by the Borrower for general
corporate purposes, including the payment of consideration, fees and
expenses in connection with the Merger Transactions. None of such proceeds
will be used, directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of buying or carrying any "margin stock" within the
meaning of Regulation U.
SECTION 5.07. Cross Default Provisions. If a cross
default provision is included in any future instrument or agreement of the
Borrower or the Guarantor evidencing or relating to indebtedness for
borrowed money in a principal amount in excess of $50,000,000, the Borrower
and the Guarantor will promptly notify the Banks thereof and will, if
requested to do so by the Required Banks, sign an amendment to this
Agreement to include a similar cross default provision herein.
SECTION 5.08. Compliance with Laws. Each of the
Borrower and the Guarantor will comply in all material respects with all
applicable laws, except where any single failure to comply therewith would
not individually have a material adverse effect on its ability to perform
its obligations hereunder, and except where necessity of compliance
therewith is being contested in good faith by appropriate proceedings;
provided, however, that with respect to its compliance with ERISA, this
Section 5.08 applies to each of the Borrower and the Guarantor only in its
capacity as an employer and not in any other capacity (such as a fiduciary
or service provider to Plans for the benefit of employers of others); and
provided further that the reference to applicable laws in this Section 5.08
shall not include Environmental Laws.
SECTION 5.09. Merger Agreement. Without the consent of
the Required Banks, neither the Borrower nor the Guarantor will permit the
Merger Agreement to be amended, modified, supplemented or waived in a
manner that materially increases the consideration payable in connection
with the Merger Transactions (other than increases in consideration in the
form of equity securities of the Guarantor). 43
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be
continuing:
(a) the Borrower shall fail to pay when due any principal
on any Loan;
(b) the Borrower shall fail to pay within five Domestic
Business Days of when due any fees or interest on any Loan;
(c) the Borrower or the Guarantor shall fail to observe
or perform any covenant contained in Sections 5.03 and 5.05;
provided that this clause (c) shall not apply to the Guarantor
prior to the Merger Date;
(d) the Borrower or the Guarantor shall fail to observe
or perform, in any material respect, any covenant or agreement
contained in this Agreement (other than those covered by clause
(a), (b) or (c) above) and such failure shall have continued for a
period of 45 days after written notice thereof has been given to
the Borrower and the Guarantor by the Agent at the request of any
Bank; provided that this clause (d) shall not apply to the
Guarantor prior to the Merger Date;
(e) any representation, warranty, certification or
statement made by the Borrower or the Guarantor in this Agreement
or in any certificate, financial statement or other document
delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made);
(f) an event of default, as defined in any indenture or
instrument evidencing or under which the Borrower, the Guarantor
or any Principal Subsidiary has at the date of this Agreement or
shall hereafter have outstanding indebtedness for borrowed money
in a principal amount in excess of $50,000,000, shall occur and be
continuing and such indebtedness shall have been accelerated so
that the same shall be or become due and payable prior to the date
on which the same would otherwise have become due and payable
(other than acceleration of Non-Recourse Indebtedness which does
not exceed in the aggregate 4% of the Parent Company's total
shareholders' equity, as set forth in the most recently published
audited consolidated balance sheet of the Parent Company), and
such acceleration shall not have been waived, rescinded or
annulled; provided, however, that if such acceleration under such
indenture or instrument shall be remedied or cured by the
Borrower, Guarantor or Principal Subsidiary, or waived, rescinded
or annulled by the requisite holders of such indebtedness, then
the Event of Default shall be deemed likewise to have been
thereupon remedied, cured or waived without further action upon
the part of the Banks; provided further that this clause (f) shall
not apply to the Guarantor prior to the Merger Date;
(g) the Borrower, the Guarantor or any Principal
Subsidiary shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect
to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar
official of it or all or substantially all of its property, or
shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or
other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally
to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing; provided that this
clause (g) shall not apply to the Guarantor prior to the Merger
Date;
(h) an involuntary case or other proceeding shall be
commenced against the Borrower, the Guarantor or any Principal
Subsidiary seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or all or substantially all of its
property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an
order for relief shall be entered against the Borrower, the
Guarantor or any Principal Subsidiary under the federal bankruptcy
laws as now or hereafter in effect; provided that this clause (h)
shall not apply to the Guarantor prior to the Merger Date; or
(i) any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as
amended) shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange
Commission under said Act) of more than 35% of the outstanding
shares of common stock of the Parent Company; or at any time
Continuing Directors shall not constitute a majority of the board
of directors of the Parent Company;
then, and in every such event, the Agent shall (i) if requested by Banks
having more than 50% in aggregate amount of the Commitments, by notice to
the Borrower terminate the Commitments and they shall thereupon terminate,
and (ii) if requested by Banks holding Notes evidencing more than 50% in
aggregate principal amount of the Loans, by notice to the Borrower declare
the Notes (together with accrued interest thereon) to be, and the Notes
(together with accrued interest thereon) shall thereupon become,
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower;
provided that in the case of any of the Events of Default specified in
clause (g) or (h) above with respect to the Borrower or the Guarantor,
without any notice to the Borrower or any other act by the Agent or the
Banks, the Commitments shall thereupon terminate and the Notes (together
with accrued interest thereon) shall become immediately due and payable
without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Agent shall give
notice to the Borrower and the Guarantor under Section 6.01(d) promptly
upon being requested to do so by any Bank and shall thereupon notify all
the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank
irrevocably appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers under this Agreement and the
Notes as are delegated to the Agent by the terms hereof or thereof,
together with all such powers as are reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Morgan Guaranty
Trust Company of New York shall have the same rights and powers under this
Agreement as any other Bank and may exercise or refrain from exercising the
same as though it were not the Agent, and Morgan Guaranty Trust Company of
New York and its affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Borrower or any
Subsidiary or affiliate of the Borrower as if it were not the Agent
hereunder.
SECTION 7.03. Action by Agent. The obligations of the
Agent hereunder are only those expressly set forth herein. Without
limiting the generality of the foregoing, the Agent shall not be required
to take any action with respect to any Default, except as expressly
provided in Article VI.
SECTION 7.04. Consultation with Experts. The Agent may
consult with legal counsel (who may be counsel for the Borrower or the
Guarantor), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken by it
in good faith in accordance with the advice of such counsel, accountants or
experts.
SECTION 7.05. Liability of Agent. Neither the Agent nor
any of its directors, officers, agents, or employees shall be liable for
any action taken or not taken by it in connection herewith (i) with the
consent or at the request of the Required Banks or (ii) in the absence of
its own gross negligence or willful misconduct. Neither the Agent nor any
of its directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with this Agreement or any
borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of the Borrower or the Guarantor; (iii) the
satisfaction of any condition specified in Article III, except receipt of
items required to be delivered to the Agent; or (iv) the validity,
effectiveness or genuineness of this Agreement, the Notes or any other
instrument or writing furnished in connection herewith. The Agent shall
not incur any liability by acting in reliance upon any notice, consent,
certificate, statement, or other writing (which may be a bank wire, telex
or similar writing) reasonably believed by it to be genuine or to be signed
by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably
in accordance with its Commitment, indemnify the Agent (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel
fees and disbursements), claim, demand, action, loss or liability (except
such as result from the Agent's gross negligence or willful misconduct)
that the Agent may suffer or incur in connection with this Agreement or any
action taken or omitted by the Agent hereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges
that it has, independently and without reliance upon the Agent or any other
Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently and
without reliance upon the Agent or any other Bank, and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking any
action under this Agreement.
SECTION 7.08. Successor Agent. The Agent may resign at
any time by giving written notice thereof to the Banks and the Borrower.
Upon any such resignation, the Required Banks shall have the right to
appoint a successor Agent approved by the Borrower (which approval shall
not be unreasonably withheld). If no successor Agent shall have been so
appointed by the Required Banks, and approved by the Borrower and shall
have accepted such appointment within 30 days after the retiring Agent
gives notice of resignation, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent, which shall be a commercial bank
organized or licensed under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of at least two
billion dollars. Upon the acceptance of its appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent.
SECTION 7.09. Agent's Fees. The Borrower shall pay to
the Agent, for its own account, fees in the amounts and at the times
previously agreed upon between the Borrower and the Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair. If on or prior to the first day of any Interest
Period for any CD Loan, Euro-Dollar Loan or Money Market LIBOR Loan the
Agent is advised by each of the Reference Banks that deposits in dollars
(in the applicable amounts) are not being offered to each of the Reference
Banks in the relevant market for such Interest Period, the Agent shall
forthwith give notice thereof to the Borrower and the Banks, whereupon
until the Agent notifies the Borrower that the circumstances giving rise to
such suspension no longer exist, (i) the obligations of the Banks to make
CD Loans or Euro-Dollar Loans, as the case may be, or to convert
outstanding Base Rate Loans into CD Loans or Euro-Dollar Loans, as the case
may be, or to convert outstanding CD Loans or Euro-Dollar Loans into CD
Loans or Euro-Dollar Loans, as the case may be, with a different Interest
Period shall be suspended, (ii) each outstanding CD Loan, Euro-Dollar Loan
or Money Market LIBOR Loan, as the case may be, shall be converted into a
Base Rate Loan on the last day of the then current Interest Period
applicable thereto, and (iii) unless the Borrower notifies the Agent at
least two Domestic Business Days before the date of any CD Borrowing, Euro-
Dollar Borrowing or Money Market LIBOR Borrowing, as the case may be, for
which a Notice of Borrowing has previously been given that it elects not to
borrow on such date, (x) if such Borrowing is a CD Borrowing or a Euro-
Dollar Borrowing, as the case may be, such Borrowing shall instead be made
as a Base Rate Borrowing and (y) if such Borrowing is a Money Market LIBOR
Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall
bear interest for each day from and including the first day to but
excluding the last day of the Interest Period applicable thereto at the
Base Rate for such day.
SECTION 8.02. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable
Lending Office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency
shall make it unlawful or impossible for any Bank (or its Euro-Dollar
Lending Office) to make, maintain or fund its Euro-Dollar Loans and such
Bank shall so notify the Agent, the Agent shall forthwith give notice
thereof to the other Banks and the Borrower, whereupon until such Bank
notifies the Borrower and the Agent that the circumstances giving rise to
such suspension no longer exist, the obligation of such Bank to make Euro-
Dollar Loans, or to convert outstanding Base Rate Loans or CD Loans into
Euro-Dollar Loans, or to convert outstanding Euro-Dollar Loans into Euro-
Dollar Loans with a different Interest Period shall be suspended. Before
giving any notice to the Agent pursuant to this Section, such Bank shall
designate a different Applicable Lending Office if such designation will
avoid the need for giving such notice and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. If such notice is given,
all Euro-Dollar Loans of such Bank then outstanding shall be converted to
Base Rate Loans either (a) on the last day of the then current Interest
Period applicable to such Euro-Dollar Loans if such Bank may lawfully
continue to maintain and fund such Loans to such day or (b) immediately if
such Bank may not lawfully continue to maintain and fund such Loans to such
day.
SECTION 8.03. Increased Cost and Reduced Return. (a)
If any applicable law, rule or regulation, or any change in any applicable
law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Applicable Lending Office) with
any request or directive (whether or not having the force of law) of any
such governmental authority, central bank or comparable agency, made or
adopted after the date hereof (other than a change currently provided for
in any existing law, rule or regulation) shall impose, modify or deem
applicable any reserve, special deposit, insurance assessment or similar
requirement (including, without limitation, any such requirement imposed by
the Board of Governors of the Federal Reserve System, but excluding (i)
with respect to any Euro-Dollar Loan, any such requirement with respect to
which such Bank is entitled to compensation during the relevant Interest
Period under Section 2.15 and (ii) with respect to any CD Loan, any such
requirement reflected in the applicable Domestic Reserve Percentage or
Assessment Rate) against assets of, deposits with or for the account of, or
credit extended by, any Bank (or its Applicable Lending Office) or shall
impose on any Bank (or its Applicable Lending Office) or on the United
States market for certificates of deposit or the London interbank market
any other condition affecting its Fixed Rate Loans (other than Money Market
Absolute Rate Loans), its Note (in respect of such Fixed Rate Loans) or its
obligation to make such Fixed Rate Loans; and the result of any of the
foregoing is to increase the cost to such Bank (or its Applicable Lending
Office) of making or maintaining any Fixed Rate Loan, or to reduce the
amount of any sum received or receivable by such Bank (or its Applicable
Lending Office) under this Agreement or under its Note with respect
thereto, by an amount reasonably deemed by such Bank to be material, then,
within 15 days after demand by such Bank (with a copy to the Agent), the
Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that any
applicable law, rule or regulation regarding capital adequacy, or any
change in any such 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 any request or directive regarding capital
adequacy (whether or not having the force of law) of any such governmental
authority, central bank or comparable agency, made or adopted after the
date hereof (other than a change currently provided for in any existing
law, rule or regulation), has or would have the effect of increasing the
amount of capital of such Bank (or its parent) required to be maintained in
respect of, or otherwise allocated to, such Bank's obligations hereunder
(its "Required Capital") by an amount reasonably deemed by such Bank to be
material, then such Bank may, by notice to the Borrower and the Agent,
increase the facility fee payable to such Bank hereunder to the extent
required so that the ratio of (w) the sum of the increased facility fee
applicable to such Bank's Commitment hereunder to (x) the prior facility
fee applicable to such Bank's Commitment hereunder is the same as the ratio
of (y) such Bank's increased Required Capital to (z) its prior Required
Capital. Such Bank's notice to the Borrower and the Agent shall set forth
its calculation of the foregoing ratios and the increased facility fee to
which it is entitled under this Section.
(c) Each Bank will promptly notify the Borrower and the
Agent of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Bank to compensation pursuant to this
Section 8.03 (each, a "Trigger Event") and will designate a different
Applicable Lending Office if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the judgment of
such Bank, be otherwise disadvantageous to such Bank. Notwithstanding any
other provision of this Section, no Bank shall be entitled to any
compensation pursuant to this Section in respect of any Trigger Event (i)
for any period of time in excess of 120 days prior to such notice or (ii)
for any period of time prior to such notice if such Bank shall not have
given such notice within 120 days of the date on which such Trigger Event
shall have been enacted, promulgated, adopted or issued in definitive or
final form unless such Trigger Event is retroactive. A certificate of any
Bank claiming compensation under Section 8.03(a) or (b) and setting forth
the additional amount or amounts to be paid to it hereunder and describing
the method of calculation thereof shall be conclusive if made reasonably
and in good faith. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.
SECTION 8.04. Taxes. (a) For purposes of this Section
8.04, the following terms have the following meanings:
"Taxes" means any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings with respect
to any payment by the Borrower pursuant to this Agreement or under any
Note, and all liabilities with respect thereto, excluding (i) in the case
of each Bank and the Agent, taxes imposed on its income, and franchise or
similar taxes imposed on it, by a jurisdiction under the laws of which such
Bank or the Agent (as the case may be) is organized or in which its
principal executive office is located or, in the case of each Bank, in
which its Applicable Lending Office is located and (ii) in the case of each
Bank, any United States withholding tax imposed on such payments but only
to the extent that such Bank is subject to United States withholding tax at
the time such Bank first becomes a party to this Agreement.
"Other Taxes" means any present or future stamp or
documentary taxes and any other excise or property taxes, or similar
charges or levies, which arise from any payment made pursuant to this
Agreement or under any Note or from the execution or delivery of, or
otherwise with respect to, this Agreement or any Note.
(b) Any and all payments by the Borrower to or for the
account of any Bank or the Agent hereunder or under any Note shall be made
without deduction for any Taxes or Other Taxes; provided that, if the
Borrower shall be required by law to deduct any Taxes or Other Taxes from
any such payments, (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable
to additional sums payable under this Section 8.04) such Bank or the Agent
(as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make
such deductions, (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable law and (iv) the Borrower shall furnish to the Agent, at its
address referred to in Section 10.01, the original or a certified copy of a
receipt evidencing payment thereof.
(c) The Borrower agrees to indemnify each Bank and the
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 8.04) paid by such Bank
or the Agent (as the case may be) and any liability (including penalties,
interest and expenses, except to the extent attributable to the negligence
or misconduct of such Bank or the Agent, as the case may be) arising
therefrom or with respect thereto. This indemnification shall be made
within 15 days from the date such Bank or the Agent (as the case may be)
makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
delivery of this Agreement in the case of each Bank listed on the signature
pages hereof and on or prior to the date on which it becomes a Bank in the
case of each other Bank, shall provide the Borrower with (i) two Internal
Revenue Service ("IRS") forms 1001 or any successor form prescribed by the
IRS, certifying that such Bank is entitled to benefits under an income tax
treaty to which the United States is a party which exempts such Bank from
United States withholding tax or reduces the rate of withholding tax on
payments of interest and eliminates withholding tax on any fees, or (ii)
two IRS forms 4224 certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or business
in the United States. If the form provided by a Bank indicates a United
States interest withholding tax rate in excess of zero, withholding tax at
such rate shall be considered excluded from "Taxes" as defined in Section
8.04(a). Each such Bank undertakes to deliver to each of the Borrower and
the Agent (A) a replacement form (or successor form) on or before the date
that such form expires or becomes obsolete or after the occurrence of any
event requiring a change in the most recent form so delivered by it, and
(B) such amendments thereto or extensions or renewals thereof as may
reasonably be required (but only so long as such Bank remains lawfully able
to do so).
(e) For any period with respect to which a Bank has
failed to provide the Borrower with the appropriate form pursuant to
Section 8.04(d) (unless such failure is due to a change in treaty, law or
regulation occurring subsequent to the date on which a form originally was
required to be provided), such Bank shall not be entitled to
indemnification under Section 8.04(b) or Section 8.04(c) with respect to
Taxes imposed by the United States; provided that if a Bank, which is
otherwise exempt from or subject to a reduced rate of withholding tax,
becomes subject to Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as such Bank shall reasonably
request to assist such Bank to recover such Taxes.
(f) Each Bank will promptly notify the Borrower and the
Agent of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Bank to make any claim for indemnification
in respect of Taxes or Other Taxes pursuant to this Section 8.04 (each, a
"Tax Event") and will designate a different Applicable Lending Office if
such designation will avoid the need for, or reduce the amount of, such
claim or any other amounts payable by the Borrower under this Section 8.04
and will not, in the judgment of such Bank, be otherwise disadvantageous to
such Bank. Notwithstanding any other provisions of this Section, no Bank
shall be entitled to any indemnification pursuant to this Section in
respect of any Tax Event (i) for any period of time in excess of 180 days
prior to such notice or (ii) for any period of time prior to such notice if
such Bank shall not have given such notice within 120 days of the date on
which such Bank became aware of such Tax Event unless such Tax Event is
retroactive.
SECTION 8.05. Base Rate Loans Substituted for Affected
Euro-Dollar Loans. If (i) the obligation of any Bank to make or maintain
Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any
Bank has demanded compensation under Section 8.03(a) and the Borrower
shall, by at least five Euro-Dollar Business Days prior notice to such Bank
through the Agent, have elected that the provisions of this Section shall
apply to such Bank, then, unless and until such Bank notifies the Borrower
that the circumstances giving rise to such suspension or demand for
compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank
as (or continued as or converted into) Euro-Dollar Loans shall
instead be Base Rate Loans, and
(b) after each of its outstanding Euro-Dollar Loans has
been repaid (or converted to a Base Rate Loan), all payments of
principal which would otherwise be applied to repay such Euro-
Dollar Loans shall be applied to repay its Base Rate Loans
instead.
If such Bank notifies the Borrower that the circumstances giving rise to
such notice no longer apply, the Borrower shall elect that the principal
amount of each such Base Rate Loan shall be converted into a Euro-Dollar
Loan on the first day of the next succeeding Interest Period applicable to
the related Euro-Dollar Loans of the other Banks.
SECTION 8.06. Substitution of Bank. If (i) the
obligation of any Bank to make Euro-Dollar Loans has been suspended
pursuant to Section 8.02 or (ii) any Bank has demanded compensation under
Section 8.03 or 8.04, the Borrower shall have the right to seek a
substitute bank or banks ("Substitute Banks") (which may be one or more of
the Banks) to purchase the Notes and assume the Commitment of such Bank
(the "Affected Bank") under this Agreement and, if the Borrower locates a
Substitute Bank, the Affected Bank shall, upon payment to it of the
purchase price agreed between it and the Substitute Bank (or, failing such
agreement, a purchase price in the amount of the outstanding principal
amount of its Loans and accrued interest thereon to the date of payment)
plus any amount (other than principal and interest) then due to it or
accrued for its account hereunder, assign all its rights and obligations
under this Agreement and the Notes to the Substitute Bank, and the
Substitute Bank shall assume such rights and obligations, whereupon the
Substitute Bank shall be a Bank party to this Agreement and shall have all
the rights and obligations of a Bank.
SECTION 8.07. Election to Terminate. If during any
Level I Period, Level II Period or Level III Period (i) the obligation of
any Bank to make Euro-Dollar Loans has been suspended pursuant to Section
8.02 or (ii) any Bank has demanded compensation under Section 8.03 or 8.04,
the Borrower may elect to terminate this Agreement as to such Bank, and in
connection therewith not to borrow any Loan hereunder from such Bank or to
prepay any Base Rate Loan made pursuant to Section 8.02 or 8.05 (without
altering the Commitments or Loans of the remaining Banks), provided that
the Borrower (i) notifies such Bank through the Agent of such election at
least two Euro-Dollar Business Days before any date fixed for such
borrowing or such a prepayment, as the case may be, and (ii) repays all of
such Bank's outstanding Loans, accrued interest thereon and any other
amounts then due to such Bank or accrued for its account hereunder
concurrently with such termination. Upon receipt by the Agent of such
notice, the Commitment of such Bank shall terminate.
ARTICLE IX
GUARANTY
The Guarantor unconditionally guarantees, as a primary
obligor and not merely as a surety, the due and punctual payment of
principal of and interest on the Loans, when and as due, whether at
maturity, by acceleration, by notice of prepayment or otherwise, and all
other monetary obligations of the Borrower to the Agent and the Banks under
this Agreement and the Notes (collectively, the "Obligations"); provided
that the Guarantor shall not have any liability under this Article IX prior
to the Merger Date. Subject to Section 10.04, the Guarantor further agrees
that the Obligations may be extended or renewed, in whole or in part,
without notice or further assent from it, and that it will remain bound
upon its guarantee notwithstanding any extension or renewal of any
Obligation.
The Guarantor waives presentment to, demand of payment
from and protest to the Borrower of any of the Obligations, and also waives
notice of acceptance of its guarantee and notice of protest for nonpayment.
The obligations of the Guarantor under this Article IX shall not be
affected by (a) the failure of the Agent or any Bank to assert any claim or
demand or to enforce any right or remedy against the Borrower under the
provisions of this Agreement or otherwise; (b) any rescission, waiver,
amendment or modification of any of the terms or provisions of this
Agreement, any Note or any other agreement (other than an amendment to this
Agreement in accordance with this Agreement, but then only to the extent
expressly affected by such amendment); (c) the release of any security
held by the Agent or any Bank for the Obligations; or (d) the failure of
the Agent or any Bank to exercise any right or remedy against any other
guarantor of the Obligations.
The Guarantor further agrees that its guarantee
constitutes a guarantee of payment when due and not of collection, and
waives any right to require that any resort be had by the Agent or any Bank
to any security held for payment of the Obligations or to any balance of
any deposit account or credit on the books of the Agent or any Bank in
favor of the Borrower or any other Person.
The obligations of the Guarantor under this Article IX
shall not be subject to any reduction, limitation, impairment or
termination for any reason, including, without limitation, any claim of
waiver, release, surrender, alteration or compromise of the Obligations,
and shall not be subject to any defense or setoff, counterclaim, recoupment
or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of the Guarantor under this
Article IX shall not be discharged or impaired or otherwise affected by the
failure of the Agent or any Bank to assert any claim or demand or to
enforce any remedy under any guarantee or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay,
wilful or otherwise, in the performance of the Obligations, or by any other
act or omission which may or might in any manner or to any extent vary the
risk of the Guarantor or otherwise operate as a discharge of the Guarantor
as a matter of law or equity (other than the indefeasible payment in full
of all the Obligations).
The Guarantor further agrees that its guarantee shall
continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part hereof, of principal of or interest on any
Obligation (including, without limitation, any payment pursuant to this
Article IX) is rescinded or must otherwise be restored by the Agent or any
Bank upon the bankruptcy or reorganization of the Borrower or otherwise.
In furtherance of the foregoing and not in limitation of
any other right which the Agent or any Bank may have at law or in equity
against the Guarantor by virtue hereof, upon the failure of the Borrower to
pay any Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise, the
Guarantor hereby promises to and will, upon receipt of written demand by
the Agent, forthwith pay, or cause to be paid, to the Agent for
distribution to the Banks, if and as appropriate, in cash the amount of
such unpaid Obligation. The Guarantor agrees that any claim or right that
the Guarantor may have against the Borrower by way of subrogation or
otherwise in respect of any payment that the Guarantor may be required to
make hereunder shall be subject and subordinated to the claims of the Agent
and the Banks against the Borrower in respect of the Obligations.
The guarantee made hereunder shall survive and be in full
force and effect so long as any Obligation is outstanding and has not been
indefeasibly paid and so long as the Banks have any further commitment to
lend and shall be reinstated to the extent provided above.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank
wire, telex, facsimile transmission or similar writing) and shall be given
to such party: (x) in the case of the Borrower, the Guarantor or the
Agent, at its address or telex or telecopy number set forth on the
signature pages hereof, (y) in the case of any Bank, at its address, telex
or telecopy number set forth in its Administrative Questionnaire or (z) in
the case of any party, such other address or telex or telecopy number as
such party may hereafter specify for the purpose by notice to the Agent,
the Borrower and the Guarantor. All notices from outside the United States
to the Borrower or the Guarantor shall only be given by telecopy and all
other notices to the Borrower or the Guarantor given by telex shall also be
given by telecopy or non-telex method. Each such notice, request or other
communication shall be effective (i) if given by telex or telecopy, when
such telex or telecopy is transmitted to the number determined pursuant to
this Section and the appropriate answerback is received, (ii) if given by
registered or certified mail, return receipt requested, when such return
receipt is signed by the recipient or (iii) if given by any other means,
when delivered at the address specified in this Section, or, if such date
is not a business day in the location where received, on the next business
day in such location; provided that notices to the Agent under Article II
or Article VIII shall not be effective until received.
SECTION 10.02. No Waivers. No failure or delay by the
Agent or any Bank in exercising any right, power or privilege hereunder or
under any Note shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 10.03. Expenses; Indemnification. (a) The
Borrower shall pay (i) all out-of-pocket expenses of the Agent, including
reasonable fees and disbursements of special counsel for the Agent (subject
to the limitations previously agreed with such counsel, in the case of fees
payable in connection with the preparation of this Agreement), in
connection with the preparation of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged Default
hereunder and (ii) if an Event of Default occurs, all out-of-pocket
expenses incurred by the Agent or any Bank, including fees and
disbursements of counsel, in connection with such Event of Default and
collection and other enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify each Bank and hold
each Bank harmless from and against any and all liabilities, claims,
losses, damages, costs and expenses of any kind, including, without
limitation, the reasonable fees and disbursements of counsel, which may be
incurred by any Bank (or by the Agent in connection with its actions as
Agent hereunder) in connection with any investigative, administrative or
judicial proceeding (whether or not such Bank shall be designated a party
thereto) relating to or arising out of (i) any actual or proposed use of
proceeds of Loans hereunder to acquire equity securities of any other
Person or (ii) any transaction which violates the change in control
provisions set forth in Section 6.01(i); provided that no Bank shall have
the right to be indemnified hereunder for its own gross negligence or
willful misconduct as determined by a court of competent jurisdiction.
SECTION 10.04. Amendments and Waivers. Any provision of
this Agreement or the Notes may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower, the
Guarantor and the Required Banks (and, if the rights or duties of the Agent
are affected thereby, by the Agent); provided that no such amendment or
waiver shall, unless signed by all the Banks, (i) increase or decrease the
Commitment of any Bank or subject any Bank to any additional obligation,
(ii) reduce or forgive the principal of or rate of interest on any Loan or
any fees hereunder, (iii) postpone the date fixed for any payment of
principal of or interest on any Loan or any fees hereunder or for any
reduction or termination of any Commitment, (iv) release the Guarantor
generally from, or limit or reduce, its liability under Article IX or (v)
amend this Section or otherwise change the percentage of the Commitments or
of the aggregate unpaid principal amount of the Notes, or the number of
Banks, which shall be required for the Banks or any of them to take any
action under this Section or any other provision of this Agreement.
SECTION 10.05. Successors and Assigns. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns, except
that the Borrower may not assign, delegate, or otherwise transfer any of
its rights or obligations under this Agreement (other than as contemplated
by Section 5.05) without the prior written consent of all Banks.
(b) Except for (i) any assignment made with the
Borrower's consent, which consent shall be at the Borrower's sole
discretion unless the Assignee is an Affiliate of the transferor Bank, in
which case, such consent shall not be unreasonably withheld, (ii) any grant
of participating interests permitted by subsection (d) below and (iii) any
designation of a different Applicable Lending Office required by Section
8.02, Section 8.03 or Section 8.04, no Bank may at any time assign or
otherwise transfer any of its rights and obligations under this Agreement
and the Notes. An assignment or other transfer which is not permitted by
this subsection (b) shall be given effect for purposes of this Agreement
only to the extent of a participating interest granted in accordance with
subsection (d) below.
(c) Subject to the requirements of subsection (b) above,
any Bank may assign to one or more banks or other institutions (each an
"Assignee) all, or a proportionate part of all, of its rights and
obligations under this Agreement and the Notes, and such Assignee shall
assume such rights and obligations, pursuant to an instrument executed by
such Assignee and such transferor Bank, with (and subject to) the
subscribed consent of the Borrower and the Agent. Upon execution and
delivery of such an instrument and payment by such Assignee to such
transferor Bank of an amount equal to the purchase price agreed between
such transferor Bank and such Assignee, such Assignee shall be a Bank party
to this Agreement and shall have all the rights and obligations of a Bank
with a Commitment as set forth in such instrument of assumption, and the
transferor Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall
be required. In connection with any such assignment, except an assignment
made pursuant to Section 8.06, the transferor Bank shall pay to the Agent
an administrative fee for processing such assignment in the amount of
$2,000. Upon the consummation of any assignment pursuant to this
subsection (c), the transferor Bank, the Agent and the Borrower shall make
appropriate arrangements so that, if required, a new Note is issued to the
Assignee. If the Assignee is not incorporated under the laws of the United
States of America or a state thereof, it shall, prior to the first date on
which interest or fees are payable hereunder for its account, deliver to
the Borrower and the Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance with
Section 8.04.
(d) Any Bank may at any time grant to one or more banks
or other institutions (each a "Participant") participating interests in any
or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Bank shall remain responsible for the
performance of its obligations hereunder, and the Borrower and the Agent
shall continue to deal solely and directly with such Bank in connection
with such Bank's rights and obligations under this Agreement. Any
agreement pursuant to which any Bank may grant such a participating
interest shall provide that such Bank shall retain the sole right and
responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement; provided that
such participation agreement may provide that such Bank will not agree to
any modification, amendment or waiver of this Agreement described in clause
(ii), (iii) or (iv) of Section 10.04 without the consent of the
Participant. The Borrower agrees that each Participant shall, to the
extent provided in its participation agreement, be entitled to the benefits
of Article VIII with respect to its participating interest.
(e) No Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.03
or 8.04 than such Bank would have been entitled to receive with respect to
the rights transferred, unless such transfer is made with the Borrower's
prior written consent or by reason of the provisions of Section 8.02, 8.03
or 8.04 requiring such Bank to designate a different Applicable Lending
Office under certain circumstances.
(f) Any Bank may at any time assign all or any portion
of its rights under this Agreement and its Note to a Federal Reserve Bank.
No such assignment shall release the transferror Bank from its obligations
hereunder.
SECTION 10.06. New York Law. This Agreement and each
Note shall be construed in accordance with and governed by the law of the
State of New York.
SECTION 10.07. Counterparts; Integration. This
Agreement may be signed in any number of counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Agreement constitutes the
entire agreement and understanding among the parties hereto and supersedes
any and all prior agreements and understandings, oral or written, relating
to the subject matter hereof.
SECTION 10.08. WAIVER OF JURY TRIAL. EACH OF THE
BORROWER, THE GUARANTOR, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 10.09. Waiver Under Pre-Existing Credit
Agreements. By its execution hereof, each undersigned Bank that also is a
party to either of the credit agreements referred to in clause (c)(iii) of
Section 3.01 hereby waives the provisions of each such credit agreement
that would require advance notice for the termination of commitments
thereunder or the prepayment of loans thereunder; provided that (a) the
foregoing waiver shall apply only to the termination of all commitments
under such credit agreements and repayment of all loans outstanding
thereunder in connection with the effectiveness of this Agreement and (b)
the Borrower shall, in lieu of advance notice of any such termination or
prepayment, give notice thereof to the Agent (as defined in such credit
agreements) on the date of such termination or prepayment.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day
and year first above written.
AETNA LIFE AND CASUALTY COMPANY,
by /s/ Alfred P. Quirk, Jr.
--------------------------- Title:
Vice President, Corporate Finance
Aetna Life and Casualty
Company 151 Farmington Avenue
Hartford, Connecticut 06156
Attention: Vice President,
Corporate Finance, YF37
Telecopier: (203) 275-2661
Telex: 99-241 99-295 643056
With a copy to:
Aetna Life and Casualty
Company 151 Farmington Avenue
Hartford, Connecticut 06156
Attention: General Counsel
Telecopier: (203) 273-0050
Telex: 99-241 99-295 643056
EXHIBIT A
NOTE
New York, New
York June ,
1996
For value received, Aetna Life and Casualty Company, a
Connecticut corporation expected to be renamed Aetna Services, Inc. (the
"Borrower"), promises to pay to the order of _______________ (the "Bank"),
for the account of its Applicable Lending Office, the aggregate unpaid
principal amount of the Bank's Loans then outstanding under the Credit
Agreement referred to below on the date or dates provided for in the Credit
Agreement. The Borrower promises to pay interest on the unpaid principal
amount of each such Loan on the dates and at the rate or rates provided for
in the Credit Agreement. All such payments of principal and interest shall
be made in lawful money of the United States in Federal or other
immediately available funds at the office of Morgan Guaranty Trust Company
of New York, 60 Wall Street, New York, New York.
All Loans made by the Bank, the respective maturities
thereof and all repayments of the principal thereof shall be recorded by
the Bank and, prior to any transfer hereof, appropriate notations to
evidence the foregoing information with respect to each such Loan then
outstanding shall be endorsed by the Bank on the schedule attached hereto,
or on a continuation of such schedule attached to and made a part hereof;
provided that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
This note is one of the Notes referred to in the Credit
Agreement dated as of June [ ], 1996 among the Borrower, Aetna Inc., the
banks listed on the signature pages thereof and Morgan Guaranty Trust
Company of New York, as Administrative Agent (as the same may be amended
from time to time, the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the prepayment
hereof and the acceleration of the maturity hereof.
AETNA LIFE AND CASUALTY COMPANY
by _____________________
Title:
LOANS AND PAYMENTS OF PRINCIPAL
- ------------------------------------------------------------------------
Amount of Amount of Principal Maturity Notation Date Loan Repaid Date Made
By
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EXHIBIT B
Form of Money Market Quote Request
[Date]
To: Morgan Guaranty Trust Company of New York (the "Agent")
From: Aetna Life and Casualty Company (the "Borrower")
Re: Credit Agreement (the "Credit Agreement") dated as of June [ ], 1996
among the Borrower, Aetna Inc., the Banks listed on the
signature pages thereof and the Agent
We hereby give notice pursuant to Section 2.03 of the Credit
Agreement that we request Money Market Quotes for the following proposed
Money Market Borrowing(s):
Date of Borrowing: ________________________
Principal Amount* Interest Period** ----------------- ----------------- $
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
- -------- *Amount must be $25,000,000 or a larger multiple of $1,000,000.
**Not less than one month (LIBOR Auction) or not less than 7 days
(Absolute Rate Auction), subject to the provisions of the definition of
Interest Period. 2
Terms used herein have the meanings assigned to them in the
Credit Agreement.
AETNA LIFE AND CASUALTY COMPANY,
by -------------------------------
Title:
EXHIBIT C
Form of Invitation for Money Market Quotes
To: [Name of Bank]
Re: Invitation for Money Market Quotes to Aetna Life and Casualty Company
(the "Borrower")
Pursuant to Section 2.03 of the Credit Agreement dated as of June
[ ], 1996 among the Borrower, Aetna Inc., the Banks parties thereto and the
undersigned, as Administrative Agent, we are pleased on behalf of the
Borrower to invite you to submit Money Market Quotes to the Borrower for
the following proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period ---------------- --------------- $
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Please respond to this invitation by no later than 9:30 A.M.
(New York City time) on [date].
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By __________________________
Authorized Officer
EXHIBIT D
Form of Money Market Quote
Morgan Guaranty Trust Company of New York, as Administrative Agent 60 Wall
Street New York, New York 10260
Attention:
Re: Money Market Quote to Aetna Life and Casualty Company (the
"Borrower")
In response to your invitation on behalf of the Borrower
dated ____________, 19__, we hereby make the following Money Market Quote
on the following terms:
1. Quoting Bank: ____________________________
2. Person to contact at Quoting Bank:
____________________________________________
3. Date of Borrowing: ______________________*
- -------- *As specified in the related Invitation. 2
4. We hereby offer to make Money Market Loan(s) in the following
principal amounts, for the following Interest Periods and at the following
rates:
Principal Interest Money Market [Absolute Amount** Period*** [Margin****]
Rate***** ] -------- --------- ------------ -----------
$
$
[Provided, that the aggregate principal amount of Money Market Loans for
which the above offers may be accepted shall not exceed $______________.]
**/
We understand and agree that the offer(s) set forth
above, subject to the satisfaction of the applicable conditions set forth
in the Credit Agreement dated as of June [ ], 1996 among the Borrower,
Aetna Inc., the Banks listed on
- --------
**Principal amount bid for each Interest Period may not exceed
principal amount requested. Specify aggregate limitation if the sum of the
individual offers exceeds the amount the Bank is willing to lend. Bids
must be made for $25,000,000 or a larger multiple of $1,000,000.
***Not less than one month (LIBOR Auction) or not less than 7 days
(Absolute Rate Auction), specified in the related Invitation. No more than
five bids are permitted for each Interest Period.
****Margin over or under the London Interbank Offered Rate
determined for the applicable Interest Period. Specify percentage (rounded
to the nearest 1/10,000 of 1%) and specify whether "PLUS" or "MINUS".
*****Specify rate of interest per annum (rounded to the nearest
1/10,000 of 1%).
