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Exhibit 10.8
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CREDIT AGREEMENT
DATED AS OF
SEPTEMBER 11, 2000
AMONG
ARTHUR J. GALLAGHER & CO.,
AJG FINANCIAL SERVICES, INC.,
THE BANKS PARTY HERETO,
HARRIS TRUST AND SAVINGS BANK,
AS AGENT AND LEAD ARRANGER,
CITIBANK, N.A.,
AS CO-LEAD ARRANGER AND SYNDICATION AGENT,
AND
BANK OF AMERICA, N.A.
AS CO-LEAD ARRANGER AND DOCUMENTATION AGENT
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Table of Contents
(This Table of Contents is not part of the Agreement)
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Section 1. The Credits.............................................................. 1
Section 1.1. The Revolving Credit Commitments......................................... 1
Section 1.2. The Short-Term Revolving Credit Commitments.............................. 2
Section 1.3. Letters of Credit........................................................ 2
Section 1.4. Applicable Interest Rates................................................ 5
Section 1.5. Minimum Borrowing Amount for Revolving Loans and Short-Term Revolving
Loans.................................................................. 7
Section 1.6. Manner of Borrowing, and Designating Interest Rates Applicable to,
Revolving Loans and Short-Term Revolving Loans......................... 7
Section 2. The Swing Line........................................................... 9
Section 2.1. Swing Loans.............................................................. 9
Section 2.2. Interest on Swing Loans.................................................. 10
Section 2.3. Requests for Swing Loans................................................. 10
Section 2.4. Refunding Loans.......................................................... 10
Section 2.5. Participations........................................................... 11
Section 3. The Competitive Bid Facility............................................. 11
Section 3.1. The Bid Loans............................................................ 11
Section 3.2. Requests for Bid Loans................................................... 12
Section 3.3. Notice of Bids; Advice of Rate........................................... 13
Section 3.4. Acceptance or Rejection of Bids.......................................... 13
Section 3.5. Notice of Acceptance or Rejection of Bids................................ 14
Section 3.6. Interest on Bid Loans.................................................... 14
Section 3.7. Telephonic Notice........................................................ 14
Section 4. General Provisions Applicable to All Loans; Reduction of Commitments..... 15
Section 4.1. Interest Periods......................................................... 15
Section 4.2. Default Rate on Revolving Loans, Short-Term Revolving Loans and Bid
Loans................................................................. 16
Section 4.3. Notes.................................................................... 17
Section 4.4. Maturity of Loans........................................................ 17
Section 4.5. Prepayments.............................................................. 18
Section 4.6. Funding Indemnity for Fixed Rate Loans................................... 18
Section 4.7. Commitment Terminations.................................................. 19
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Section 5. Fees and Extensions; Place and Application of Payments................... 19
Section 5.1. Fees..................................................................... 19
Section 5.2. Extension of Termination Date and Short-Term Revolving Credit
Termination Date...................................................... 20
Section 5.3. Place and Application of Payments........................................ 21
Section 6. Definitions; Interpretation.............................................. 21
Section 6.1. Definitions.............................................................. 21
Section 6.2. Interpretation........................................................... 31
Section 7. Representations and Warranties........................................... 31
Section 7.1. Organization and Qualification........................................... 32
Section 7.2. Subsidiaries............................................................. 32
Section 7.3. Corporate Authority and Validity of Obligations.......................... 32
Section 7.4. Use of Proceeds; Margin Stock............................................ 33
Section 7.5. Financial Reports........................................................ 33
Section 7.6. No Material Adverse Change............................................... 33
Section 7.7. Full Disclosure.......................................................... 33
Section 7.8. Good Title............................................................... 33
Section 7.9. Litigation and Other Controversies....................................... 34
Section 7.10. Taxes.................................................................... 34
Section 7.11. Approvals................................................................ 34
Section 7.12. Affiliate Transactions................................................... 34
Section 7.13. Investment Company; Public Utility Holding Company....................... 34
Section 7.14. ERISA.................................................................... 34
Section 7.15. Compliance with Laws..................................................... 35
Section 7.16. Other Agreements......................................................... 35
Section 7.17. No Default............................................................... 35
Section 7.18. Insolvency............................................................... 35
Section 7.19. Labor Controversies...................................................... 35
Section 8. Conditions Precedent..................................................... 35
Section 8.1. Initial Credit Event..................................................... 36
Section 8.2. All Credit Events........................................................ 37
Section 9. Covenants................................................................ 38
Section 9.1. Maintenance of Business.................................................. 38
Section 9.2. Maintenance of Properties................................................ 38
Section 9.3. Taxes and Assessments.................................................... 38
Section 9.4. Insurance................................................................ 38
Section 9.5. Financial Reports........................................................ 38
Section 9.6. Inspection............................................................... 40
Section 9.7. Net Worth................................................................ 40
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Section 9.8. Debt to Net Worth Ratio................................................ 40
Section 9.9. Fixed Charge Coverage Ratio............................................ 40
Section 9.10. Indebtedness for Borrowed Money........................................ 40
Section 9.11. Liens.................................................................. 41
Section 9.12. Investments, Acquisitions, Loans, Advances and Guaranties.............. 42
Section 9.13. Unrealized Losses...................................................... 43
Section 9.14. Mergers and Consolidations............................................. 43
Section 9.15. Capital Expenditures................................................... 43
Section 9.16. ERISA.................................................................. 44
Section 9.17. Compliance with Laws................................................... 44
Section 9.18. Burdensome Contracts with Affiliates................................... 44
Section 9.19. No Changes in Fiscal Year.............................................. 44
Section 9.20. Change in the Nature of Business....................................... 44
Section 10. Events of Default and Remedies......................................... 44
Section 10.1. Events of Default...................................................... 44
Section 10.2. Non-Bankruptcy Defaults................................................ 46
Section 10.3. Bankruptcy Defaults.................................................... 46
Section 10.4. Collateral for Undrawn Letters of Credit............................... 47
Section 10.5. Notice of Default...................................................... 47
Section 10.6. Expenses............................................................... 47
Section 11. Change in Circumstances................................................ 47
Section 11.1. Change of Law.......................................................... 47
Section 11.2. Unavailability of Deposits or Inability to Ascertain, or Inadequacy of,
Adjusted LIBOR....................................................... 48
Section 11.3. Increased Cost and Reduced Return...................................... 48
Section 11.4. Lending Offices........................................................ 50
Section 11.5. Discretion of Bank as to Manner of Funding............................. 50
Section 12. The Agent.............................................................. 50
Section 12.1. Appointment and Authorization of Agent................................. 50
Section 12.2. Agent and its Affiliates............................................... 50
Section 12.3. Action by Agent........................................................ 51
Section 12.4. Consultation with Experts.............................................. 51
Section 12.5. Liability of Agent; Credit Decision.................................... 51
Section 12.6. Indemnity.............................................................. 52
Section 12.7. Resignation of Agent and Successor Agent............................... 52
Section 12.8. Syndication Agent and Documentation Agent.............................. 52
Section 13. Miscellaneous.......................................................... 52
Section 13.1. Withholding Taxes...................................................... 52
Section 13.2. No Waiver of Rights.................................................... 53
Section 13.3. Non-Business Day....................................................... 54
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Section 13.4. Documentary Taxes....................................................... 54
Section 13.5. Survival of Representations............................................. 54
Section 13.6. Survival of Indemnities................................................. 54
Section 13.7. Sharing of Set-Off...................................................... 54
Section 13.8. Notices................................................................. 54
Section 13.9. Counterparts............................................................ 55
Section 13.10. Successors and Assigns.................................................. 55
Section 13.11. Participants and Note Assignees......................................... 55
Section 13.12. Assignment Agreements................................................... 56
Section 13.13. Amendments.............................................................. 57
Section 13.14. Headings................................................................ 57
Section 13.15. Legal Fees, Other Costs and Indemnification............................. 57
Section 13.16. Set Off................................................................. 58
Section 13.17. Currency................................................................ 58
Section 13.18. Entire Agreement........................................................ 59
Section 13.19. Governing Law........................................................... 59
Section 13.20. Submission to Jurisdiction; Waiver of Jury Trial........................ 59
Section 13.21. Confidentiality......................................................... 59
Signature..................................................................................... 60
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Exhibits
A - Form of Notice of Payment Request
B - Form of Revolving Credit Note
C - Form of Short-Term Revolving Credit Note
D - Form of Swing Line Note
E - Form of Bid Note
F - Form of Bid Loan Request Confirmation
G - Form of Invitation to Bid
H - Form of Confirmation of Bid
I - Form of Notice of Acceptance of Bid
J - Form of Compliance Certificate
K - Assignment Agreement
Schedule 1.2(a) Existing L/Cs
Schedule 7.2 Existing Subsidiaries
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Credit Agreement
To each of the Banks signatory hereto
Ladies and Gentlemen:
The undersigned, Arthur J. Gallagher & Co, a Delaware corporation
("Gallagher"), and AJG Financial Services, Inc., a Delaware corporation (the
"AJG"; Gallagher and AJG being referred to herein collectively as the
"Borrowers" and individually as a "Borrower"), apply to you for your several
commitments, subject to all the terms and conditions hereof and on the basis of
the representations and warranties hereinafter set forth, to make available a
three-year revolving credit for loans and letters of credit (the "Revolving
Credit"), a short-term revolving credit for loans (the "Short-Term Revolving
Credit") and a swing line (the "Swing Line") for loans, in each case as
described herein. Each of you is hereinafter referred to individually as a
"Bank," all of you are hereinafter referred to collectively as the "Banks,";
Harris Trust and Savings Bank in its capacity as administrative agent for the
Banks hereunder is hereinafter referred to as the "Agent"; Citibank, N.A., in
its capacity as co-lead arranger and syndication agent is hereinafter referred
to as the "Syndication Agent"; and Bank of America, N.A., in its capacity as
co-lead arranger and documentation agent is hereinafter referred to as the
"Documentation Agent".
Section 1. The Credits.
Section 1.1. The Revolving Credit Commitments. Subject to the terms and
conditions hereof, each Bank, by its acceptance hereof, severally agrees to make
a loan or loans (individually a "Revolving Loan" and collectively "Revolving
Loans") to either Borrower from time to time on a revolving basis in U.S.
Dollars and Alternative Currencies in an aggregate outstanding Original Dollar
Amount up to the amount of its revolving credit commitment set forth on the
applicable signature page hereof (its "Revolving Credit Commitment" and,
cumulatively for all the Banks, the "Revolving Credit Commitments"), subject to
any reductions thereof pursuant to the terms hereof, on or after the Effective
Date and before the Termination Date. Neither the Original Dollar Amount nor the
U.S. Dollar Equivalent of the aggregate principal amount of all Revolving Loans,
all Revolving Swing Loans and all L/C Obligations at any time outstanding shall
exceed the Revolving Credit Commitments in effect at such time. Each Borrowing
of Revolving Loans shall be made ratably from the Banks in proportion to their
respective Percentages. As provided in Section 1.6(a) hereof, the relevant
Borrower may elect that each Borrowing of Revolving Loans denominated in U.S.
Dollars be either Domestic Rate Loans or Eurocurrency Loans; provided that
neither the Original Dollar Amount nor the U.S. Dollar Equivalent of the
aggregate principal amount of all Eurocurrency Loans (whether Revolving Loans or
Short-Term Revolving Loans) shall exceed $50,000,000. All Revolving Loans
denominated in an Alternative Currency shall be Eurocurrency Loans. Revolving
Loans
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may be repaid and the principal amount thereof reborrowed before the Termination
Date, subject to all the terms and conditions hereof.
Section 1.2. The Short-Term Revolving Credit Commitments. Subject to
the terms and conditions hereof, each Bank, by its acceptance hereof, severally
agrees to make a loan or loans (individually a "Short-Term Revolving Loan" and
collectively "Short-Term Revolving Loans") to either Borrower from time to time
on a revolving basis in U.S. Dollars and Alternative Currencies in an aggregate
outstanding Original Dollar Amount up to the amount of its short-term revolving
credit commitment set forth on the applicable signature page hereof (its
"Short-Term Revolving Credit Commitment" and, cumulatively for all the Banks,
the "Short-Term Revolving Credit Commitments"), subject to any reductions
thereof pursuant to the terms hereof, on or after the Effective Date and before
the Short-Term Revolving Credit Termination Date; provided, however, that the
Short-Term Revolving Credit Commitments may not be utilized by the Borrowers
unless and until the Revolving Credit Commitments have been fully drawn upon and
are outstanding as Revolving Loans and/or L/C Obligations. Neither the Original
Dollar Amount nor the U.S. Dollar Equivalent of the aggregate principal amount
of all Short-Term Revolving Loans, all Short-Term Swing Loans and all Bid Loans
shall exceed the Short-Term Revolving Credit Commitments in effect at such time.
Each Borrowing of Short-Term Revolving Loans shall be made ratably from the
Banks in proportion to their respective Percentages. As provided in Section
1.6(a) hereof, the relevant Borrower may elect that each Borrowing of Short-Term
Revolving Loans denominated in U.S. Dollars be either Domestic Rate Loans or
Eurocurrency Loans; provided that neither the Original Dollar Amount nor the
U.S. Dollar Equivalent of the aggregate principal amount of all Eurocurrency
Loans (whether Revolving Loans or Short-Term Revolving Loans) shall exceed
$50,000,000. All Short-Term Revolving Loans denominated in an Alternative
Currency shall be Eurocurrency Loans. Short-Term Revolving Loans may be repaid
and the principal amount thereof reborrowed before the Short-Term Revolving
Credit Termination Date, subject to all the terms and conditions hereof.
Section 1.3. Letters of Credit. (a) General Terms. Subject to the terms
and conditions hereof, as part of the Revolving Credit, the Agent shall issue
standby or commercial letters of credit (each a "Letter of Credit") for the
account of either Borrower in U.S. Dollars or in an Alternate Currency; provided
that (i) the aggregate Original Dollar Amount of the L/C Obligations at any time
outstanding shall not exceed the L/C Commitment and (ii) the aggregate Original
Dollar Amount of the L/C Obligations at any time outstanding shall not exceed
the difference between the Revolving Credit Commitments in effect at such time
and the aggregate Original Dollar Amount of all Revolving Loans and all
Revolving Swing Loans then outstanding. Notwithstanding anything herein to the
contrary, the Existing L/Cs (all of which are listed and described on Schedule
1.3(a) hereto) shall each constitute a "Letter of Credit" herein for all
purposes of the Agreement to the same extent, and with the same force and
effect, as if such Existing L/Cs had been issued at the request of a Borrower
hereunder. Each Letter of Credit shall be issued by the Agent, but each Bank
shall be obligated to reimburse the Agent for its Percentage of the amount of
each drawing thereunder and, accordingly, the undrawn face amount of each Letter
of Credit shall constitute usage of the Revolving Credit Commitment of each Bank
pro rata in accordance with each Bank's Percentage.
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(b) Applications. At any time on or after the Effective Date and before
the Termination Date, the Agent shall, at the request of the relevant Borrower,
issue one or more Letters of Credit for the account of such Borrower, in a form
satisfactory to the Agent, with expiration dates no later than the earliest of
(i) 12 months from the date of issuance or (ii) five days prior to the
Termination Date, in an aggregate face amount as set forth above, upon the
receipt of a duly executed application for the relevant Letter of Credit in the
form customarily prescribed by the Agent for the type of Letter of Credit,
whether standby or commercial, requested (each an "Application").
Notwithstanding anything contained in any Application to the contrary (i) the
Borrowers' obligation to pay fees in connection with each Letter of Credit shall
be as exclusively set forth in Section 5.1(b) hereof, (ii) except during the
continuance of an Event of Default, the Agent will not call for the funding by
the Borrowers of any amount under a Letter of Credit, or any other form of
collateral security for the Borrowers' obligations in connection with such
Letter of Credit, before being presented with a drawing thereunder, and (iii) if
the Agent is not timely reimbursed for the amount of any drawing under a Letter
of Credit on the date such drawing is paid, the Borrowers' obligation to
reimburse the Agent for the amount of such drawing shall bear interest (which
the Borrowers hereby jointly and severally promise to pay) from and after the
date such drawing is paid until payment in full thereof (i) in the case of a
drawing under a Letter of Credit denominated in U.S. Dollars, at a rate per
annum equal to the sum of 2% plus the Domestic Rate from time to time in effect
and (ii) in the case of a drawing under a Letter of Credit denominated in an
Alternative Currency, at a rate per annum equal to the sum of 2% plus the
Applicable Margin for Eurocurrency Loans under the Revolving Credit plus the
Overnight Eurocurrency Rate. The Agent will promptly notify the Banks of each
issuance by it of a Letter of Credit. If the Agent issues any Letters of Credit
with expiration dates that are automatically extended unless the Agent gives
notice that the expiration date will not so extend beyond its then scheduled
expiration date, the Agent will give such notice of non-renewal before the time
necessary to prevent such automatic extension if before such required notice
date (i) the expiration date of such Letter of Credit if so extended would be
later than the date which is five days prior to the Termination Date, (ii) the
Commitments have been terminated or (iii) an Event of Default exists and the
Required Banks have given the Agent instructions not to so permit the extension
of the expiration date of such Letter of Credit. The Agent agrees to issue
amendments to the Letters of Credit increasing the amount, or extending the
expiration date, thereof at the request of the relevant Borrower subject to the
conditions of Section 8.2 and the other terms of this Section 1.3. Without
limiting the generality of the foregoing, the Agent's obligation to issue, amend
or extend the expiration date of a Letter of Credit is subject to the conditions
of Section 8.2 and the other terms of this Section 1.3 and the Agent will not
issue, amend or extend the expiration date of any Letter of Credit if any Bank
notifies the Agent of any failure to satisfy or otherwise comply with such
conditions and terms and directs the Agent not to take such action. No amendment
to a Letter of Credit shall extend the expiration date of such Letter of Credit
beyond the Termination Date without the consent of each Bank having a Revolving
Credit Commitment.
(c) The Reimbursement Obligations. Subject to Section 1.3(b) hereof,
the obligation of the Borrowers to reimburse the Agent for all drawings under a
Letter of Credit (a "Reimbursement Obligation") shall be governed by the
Application related to such Letter of Credit, except that, if and as long as no
Default or Event of Default exists and the other conditions in Section 8.2
hereof are satisfied, any Reimbursement Obligation outstanding on
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account of a drawing under a Letter of Credit shall automatically convert into a
Borrowing of Domestic Rate Loans in an amount equal to the Original Dollar
Amount of such Reimbursement Obligation on the date such drawing occurs and the
Agent shall notify each Bank thereof, and each Bank shall thereupon fund its
Domestic Rate Loan in such Borrowing in accordance with Sections 1.1 and 1.6
(except for any requirement that a Borrowing of Domestic Rate Loans be in a
certain amount). If the conditions in Section 8.2 cannot be satisfied with
respect to any drawing, then reimbursement of such drawing shall be made in U.S.
Dollars (in the case of a drawing under a Letter of Credit denominated in U.S.
Dollars) or in the U.S. Dollar Equivalent (in the case of a drawing under a
Letter of Credit denominated in an Alternative Currency) in immediately
available funds at the Agent's principal office in Chicago, Illinois by no later
than 1:00 p.m. (Chicago time) on the date when such drawing is paid or, if such
drawing was paid after 11:30 a.m. (Chicago time), by the end of such day. If the
relevant Borrower does not make any such reimbursement payment on the date due
and the Participating Banks fund their participations therein in the manner set
forth in Section 1.3(d) below, then all payments thereafter received by the
Agent in discharge of any of the relevant Reimbursement Obligations shall be
distributed in accordance with Section 1.3(d) below.
(d) The Participating Interests. Each Bank (other than the Bank then
acting as Agent in issuing Letters of Credit), by its acceptance hereof,
severally agrees to purchase from the Agent, and the Agent hereby agrees to sell
to each such Bank (a "Participating Bank"), an undivided percentage
participating interest (a "Participating Interest"), to the extent of its
Percentage, in each Letter of Credit issued by, and each Reimbursement
Obligation owed to, the Agent. Upon any failure by the Borrowers to pay any
Reimbursement Obligation at the time required on the date the related drawing is
paid, as set forth in Section 1.3(c) above, or if the Agent is required at any
time to return to either Borrower or to a trustee, receiver, liquidator,
custodian or other Person any portion of any payment of any Reimbursement
Obligation, each Participating Bank shall, not later than the Business Day it
receives a certificate in the form of Exhibit A hereto from the Agent to such
effect, if such certificate is received before 1:00 p.m. (Chicago time), or not
later than the following Business Day, if such certificate is received after
such time, pay to the Agent an amount equal to its Percentage of such unpaid or
recaptured Reimbursement Obligation together with interest on such amount
accrued from the date the related payment was made by the Agent to the date of
such payment by such Participating Bank at a rate per annum equal to (i) from
the date the related payment was made by the Agent to the date two Business Days
after payment by such Participating Bank is due hereunder, the Federal Funds
Rate for each such day and (ii) from the date two Business Days after the date
such payment is due from such Participating Bank to the date such payment is
made by such Participating Bank, the Domestic Rate in effect for each such day.
Each such Participating Bank shall thereafter be entitled to receive its
Percentage of each payment received in respect of the relevant Reimbursement
Obligation and of interest paid thereon, with the Agent retaining its Percentage
as a Bank hereunder.
The several obligations of the Participating Banks to the Agent under
this Section 1.3 shall be absolute, irrevocable and unconditional under any and
all circumstances whatsoever (except, without limiting the relevant Borrower's
obligations under each Application, to the extent the Borrowers are relieved
from their obligation to reimburse the Agent for a drawing under a Letter of
Credit because of the Agent's gross negligence or willful misconduct in
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determining that documents received under the Letter of Credit comply with the
terms thereof) and shall not be subject to any set-off, counterclaim or defense
to payment which any Participating Bank may have or have had against the
Borrowers, the Agent, any other Bank or any other Person whatsoever. Without
limiting the generality of the foregoing, such obligations shall not be affected
by any Default or Event of Default or by any reduction or termination of any
Commitment of any Bank, and each payment by a Participating Bank under this
Section 1.3 shall be made without any offset, abatement, withholding or
reduction whatsoever. The Agent shall be entitled to offset amounts received for
the account of a Bank under this Agreement against unpaid amounts due from such
Bank to the Agent hereunder (whether as fundings of participations, indemnities
or otherwise), but shall not be entitled to offset against amounts owed to the
Agent by any Bank arising outside this Agreement.
(e) Indemnification. The Participating Banks shall, to the extent of
their respective Percentages, indemnify the Agent (to the extent not reimbursed
by the Borrowers) against any cost, expense (including reasonable 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 any Letter of Credit. The obligations of
the Participating Banks under this Section 1.3(e) and all other parts of this
Section 1.3 shall survive termination of this Agreement and of all other L/C
Documents.
Section 1.4. Applicable Interest Rates. (a) Domestic Rate Loans. Each
Domestic Rate Loan made or maintained by a Bank shall bear interest during each
Interest Period it is outstanding (computed on the basis of a year of 365 or 366
days, as the case may be, and actual days elapsed) on the unpaid principal
amount thereof from the date such Loan is advanced, continued or created by
conversion from a Eurocurrency Loan until maturity (whether by acceleration or
otherwise) at a rate per annum equal to the sum of the Applicable Margin for
Domestic Rate Loans plus the Domestic Rate from time to time in effect, payable
on the last day of its Interest Period and at maturity (whether by acceleration
or otherwise).
(b) Eurocurrency Loans. Each Eurocurrency Loan made or maintained by a
Bank shall bear interest during each Interest Period it is outstanding (computed
on the basis of a year of 360 days and actual days elapsed) on the unpaid
principal amount thereof from the date such Loan is advanced, continued, or
created by conversion from a Domestic Rate until maturity (whether by
acceleration or otherwise) at a rate per annum equal to the sum of the
Applicable Margin for Eurocurrency Loans plus the Adjusted LIBOR applicable for
such Interest Period, payable on the last day of the Interest Period and at
maturity (whether by acceleration or otherwise), and, if the applicable Interest
Period is longer than three months, on each day occurring every three months
after the commencement of such Interest Period. There shall not be more than ten
Eurocurrency Loans outstanding at any one time.
(c) Alternative Currency. On the date either Borrower requests a
Borrowing of Eurocurrency Loans in an Alternative Currency, as provided in
Section 1.6(a) below, the Agent shall promptly notify each Bank. If a Bank
determines that such Alternative Currency is not available to it in sufficient
amount and for a sufficient term to enable it to advance or continue the Loan
requested of it as part of such Eurocurrency Borrowing and so notifies the Agent
no later than 1:00 p.m. (Chicago time) on the same day it receives notice from
the Agent of such
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requested Loan, the Agent shall so notify the relevant Borrower by 1:45 p.m.
(Chicago time). If the relevant Borrower nevertheless desires such Borrowing, it
must notify the Agent by no later than 3:00 p.m. (Chicago time) on such day. If
the Agent does not receive such notice from the relevant Borrower by 3:00 p.m.
(Chicago time), the relevant Borrower shall automatically be deemed to have
revoked its request for the Eurocurrency Borrowing and the Agent will promptly
notify the Banks of such revocation. If the relevant Borrower does give such
notice by 3:00 p.m. (Chicago time), each Bank that did not notify the Agent by
1:00 p.m. (Chicago time) that the requested Alternative Currency is unavailable
to it to fund the requested Loan shall, subject to Section 8 hereof, make its
Loan in the requested Alternative Currency in accordance with Section 1.6(d)
hereof; provided, however, that in the event that a Bank or Banks shall exercise
this option (each, an "Unavailable Bank"), the Borrowers may, but shall not be
obligated to, at any time within 90 days of such exercise with the consent of
the Agent but without the consent of any Unavailable Banks (i) terminate the
Revolving Credit Commitment and the Short-Term Revolving Credit Commitment of
each Unavailable Bank, (ii) obtain a new Bank or Banks pursuant to the
assignment provisions set forth in Section 13.12 hereof (except with regard to
the minimum amount requirements set forth in clauses (ii) and (iii) of the first
sentence of such Section) to effect the assignment to such new Bank or Banks of
each Unavailable Bank's interests, rights and obligations under this Agreement
(including without limitation all of such Unavailable Bank's Revolving Credit
Commitment and Short-Term Revolving Credit Commitment as well as its portion of
all outstanding Loans and the Notes held by such Unavailable Bank) and the other
Loan Documents and/or to increase the Revolving Credit Commitment and the Short-
Term Revolving Credit Commitment of one or more existing Banks, in each case so
that after giving effect thereto the Revolving Credit Commitments and the Short-
Term Revolving Credit Commitment shall be in the same amounts as prior to the
events described in this paragraph, (iii) repay in full to each Unavailable Bank
all outstanding Loans (including accrued interest thereon) and L/C Obligations
at the time of the assignment and/or increase in the Revolving Loan Commitment
and the Short-Term Revolving Credit Commitment described in clause (ii) above
with the proceeds of Loans made by such Persons who are to become Banks by
assignment or with the proceeds of Loans made by Banks who have agreed to
increase their Revolving Credit Commitment and Short-Term Revolving Credit
Commitment and (iv) pay to each Unavailable Bank all fees and other compensation
due and owing such Unavailable Bank under the terms of this Agreement and the
other Loan Documents; provided further that if the Borrowers choose to exercise
their right to replace an Unavailable Bank, the Borrowers, the Agent and the
Bank which replaces the Unavailable Bank shall execute such instruments and
documents as shall, in the opinion of the Agent, be reasonably necessary in
order to effect such replacement. Each Bank that did so notify the Agent by 1:00
p.m. (Chicago time) that it would not be able to make the Loan requested from it
shall, subject to Section 6 hereof, make a Eurocurrency Loan denominated in U.S.
Dollars in the Original Dollar Amount of, and with the same Interest Period as,
the Eurocurrency Loan such Bank was originally requested to make. Such
Eurocurrency Loan denominated in U.S. Dollars shall be made by the affected Bank
on the same day as the other Banks make their Eurocurrency Loans denominated in
the applicable Alternative Currency as part of the relevant Borrowing of
Eurocurrency Loans, but shall bear interest with reference to the Adjusted LIBOR
applicable to U.S. Dollars rather than the relevant Alternative Currency for the
applicable Interest Period and shall be made available in accordance with the
procedures for disbursing U.S. Dollar Loans under Section 1.6(d) hereof. Any
Revolving Loan and any Short-Term Revolving Loan made in an Alternative Currency
shall
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be advanced in such currency, and all payments of principal and interest thereon
shall be made in such Alternative Currency.
(d) Rate Determinations. The Agent shall determine each interest rate
applicable to Obligations and the Original Dollar Amount of Revolving Loans and
Short-Term Revolving Loans denominated in Alternative Currencies, and a
reasonable determination thereof by the Agent shall be conclusive and binding
except in the case of manifest error or willful misconduct. The Original Dollar
Amount of each Eurocurrency Loan denominated in an Alternative Currency shall be
determined or redetermined, as applicable, effective as of the first day of each
Interest Period applicable to such Loan.
Section 1.5. Minimum Borrowing Amount for Revolving Loans and
Short-Term Revolving Loans. Each Borrowing of Domestic Rate Loans shall be in an
amount not less than $1,000,000 and in integral multiples of $500,000, provided
that a Borrowing of Domestic Rate Loans applied to pay a Reimbursement
Obligation pursuant to Section 1.3(c) hereof shall be in an amount equal to such
Reimbursement Obligation. Each Borrowing of Eurocurrency Loans shall be in an
amount not less than an Original Dollar Amount of $5,000,000 and, if greater,
shall be in such integral multiple as would have the Original Dollar Amount most
closely approximating $1,000,000.
Section 1.6. Manner of Borrowing, and Designating Interest Rates
Applicable to, Revolving Loans and Short-Term Revolving Loans. (a) Notice to the
Agent. The relevant Borrower shall give notice to the Agent by no later than
11:00 a.m. (Chicago time) (i) at least four Business Days before the date on
which such Borrower requests the Banks to advance a Borrowing of Eurocurrency
Loans denominated in an Alternative Currency, (ii) at least three Business Days
before the date on which such Borrower requests the Banks to advance a Borrowing
of Eurocurrency Loans denominated in U.S. Dollars and (iii) on the date such
Borrower requests the Banks to advance a Borrowing of Domestic Rate Loans. The
Loans included in each Borrowing shall bear interest initially at the type of
rate specified in such notice of a new Borrowing. Thereafter, the relevant
Borrower may from time to time elect to change or continue the type of interest
rate borne by each Borrowing or, subject to Section 1.5's minimum amount
requirement for each outstanding Borrowing, a portion thereof, as follows: (i)
if such Borrowing is of Eurocurrency Loans, on the last day of the Interest
Period applicable thereto, such Borrower may continue all or part of such
Borrowing as Eurocurrency Loans for an Interest Period or Interest Periods
specified by such Borrower or, if such Eurocurrency Loan is denominated in U.S.
Dollars, convert all or part of such Borrowing into Domestic Rate Loans and (ii)
if such Borrowing is of Domestic Rate Loans, on any Business Day, such Borrower
may (subject to the notice requirements set forth herein) convert all or part of
such Borrowing into Eurocurrency Loans denominated in U.S. Dollars or
denominated in an Alternative Currency, in each case, for an Interest Period or
Interest Periods specified by such Borrower. The relevant Borrower shall give
all such notices requesting the advance, continuation, or conversion of a
Borrowing to the Agent by telephone or telecopy (which notice shall be
irrevocable once given and, if by telephone, shall be promptly confirmed in
writing). Notices of the continuation of a Borrowing of Eurocurrency Loans
denominated in U.S. Dollars for an additional Interest Period or of the
conversion of part or all of a Borrowing of Eurocurrency Loans denominated in
U.S. Dollars into Domestic Rate Loans or of Domestic Rate Loans into
Eurocurrency Loans
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denominated in U.S. Dollars must be given by no later than 11:00 a.m. (Chicago
time) at least three Business Days before the date of the requested continuation
or conversion. Notices of the continuation of a Borrowing of Eurocurrency Loans
denominated in an Alternative Currency for an additional Interest Period or of
the conversion of part or all of a Borrowing of Eurocurrency Loans denominated
in an Alternative Currency into Domestic Rate Loans or of Domestic Rate Loans
into Eurocurrency Loans denominated in an Alternative Currency must be given no
later than 11:00 a.m. (Chicago time) at least four Business Days before the
requested continuation or conversion. All such notices concerning the advance,
continuation, or conversion of a Borrowing shall specify the date of the
requested advance, continuation or conversion of a Borrowing (which shall be a
Business Day), the amount of the requested Borrowing to be advanced, continued,
or converted, the type of Loans to comprise such new, continued or converted
Borrowing and, if such Borrowing is to be comprised of Eurocurrency Loans, the
currency and Interest Period applicable thereto. Each Borrower agrees that the
Agent may rely on any such telephonic or telecopy notice given by any person it
in good faith believes is an Authorized Representative of such Borrower without
the necessity of independent investigation, and in the event any such notice by
telephone conflicts with any written confirmation, such telephonic notice shall
govern if the Agent has acted in reliance thereon.
(b) Notice to the Banks. Not later than 12:00 Noon (Chicago time) on
the date the Agent receives any notice from a Borrower pursuant to Section
1.6(a) above, the Agent shall give telephonic or telecopy notice to each Bank.
The Agent shall give notice to the relevant Borrower and each Bank by like means
of the interest rate applicable to each Borrowing of Eurocurrency Loans and, if
such Borrowing is denominated in an Alternative Currency, shall give notice by
such means to the relevant Borrower and each Bank of the Original Dollar Amount
thereof.
(c) Borrowers' Failure to Notify. Any outstanding Borrowing of Domestic
Rate Loans shall, subject to Section 8.2 hereof, automatically be continued for
an additional Interest Period on the last day of its then current Interest
Period unless the relevant Borrower has notified the Agent within the period
required by Section 1.6(a) that it intends to convert such Borrowing into a
Borrowing of Eurocurrency Loans or notifies the Agent within the period required
by Section 4.5(a) that it intends to prepay such Borrowing. If the relevant
Borrower fails to give notice pursuant to Section 1.6(a) above of the
continuation or conversion of any outstanding principal amount of a Borrowing of
Eurocurrency Loans denominated in U.S. Dollars before the last day of its then
current Interest Period within the period required by Section 1.6(a) and has not
notified the Agent within the period required by Section 4.5(a) that it intends
to prepay such Borrowing, such Borrowing shall automatically be converted into a
Borrowing of Domestic Rate Loans, subject to Section 8.2 hereof. If the relevant
Borrower fails to give notice pursuant to Section 1.6(a) above of the
continuation of any outstanding principal amount of a Borrowing of Eurocurrency
Loans denominated in an Alternative Currency before the last day of its then
current Interest Period within the period required by Section 1.6(a) and has not
notified the Agent within the period required by Section 4.5(a) that it intends
to prepay such Borrowing, such Borrowing shall automatically be continued as a
Borrowing of Eurocurrency Loans in the same Alternative Currency with an
Interest Period of one month, subject to Section 8.2 hereof, including the
application of Section 1.5 and of the restrictions contained in the definition
of Interest Period.
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(d) Disbursement of Revolving Loans and Short-Term Revolving Loans. Not
later than 11:00 a.m. (Chicago time) on the date of any requested advance of a
new Borrowing of Eurocurrency Loans, and not later than 1:00 p.m. (Chicago time)
on the date of any requested advance of a new Borrowing of Domestic Rate Loans,
subject to Section 8 hereof, each Bank shall make available its Loan comprising
part of such Borrowing in funds immediately available at the principal office of
the Agent in Chicago, Illinois, except that if such Borrowing is denominated in
an Alternative Currency each Bank shall, subject to Section) 1.4(c) and Section
8, make available its Loan comprising part of such Borrowing at such office as
the Agent has previously specified in a notice to each Bank, in such funds as
are then customary for the settlement of international transactions in such
currency and no later than such local time as is necessary for such funds to be
received and transferred to the relevant Borrower for same day value on the date
of the Borrowing. The Agent shall make available to the relevant Borrower Loans
denominated in U.S. Dollars at the Agent's principal office in Chicago, Illinois
and Loans denominated in Alternative Currencies at such office as the Agent has
previously agreed to with the Borrowers, in each case in the type of funds
received by the Agent from the Banks.
(e) Agent Reliance on Bank Funding. Unless the Agent shall have been
notified by a Bank before the date on which such Bank is scheduled to make
payment to the Agent of the proceeds of a Revolving Loan or a Short-Term
Revolving Loan (which notice shall be effective upon receipt) that such Bank
does not intend to make such payment, the Agent may assume that such Bank has
made such payment when due and the Agent may in reliance upon such assumption
(but shall not be required to) make available to the relevant Borrower the
proceeds of the Loan to be made by such Bank and, if any Bank has not in fact
made such payment to the Agent, such Bank shall, on demand, pay to the Agent the
amount made available to such Borrower attributable to such Bank together with
interest thereon in respect of each day during the period commencing on the date
such amount was made available to such Borrower and ending on (but excluding)
the date such Bank pays such amount to the Agent at a rate per annum equal to
the Federal Funds Rate or, in the case of a Loan denominated in an Alternative
Currency, the cost to the Agent of funding the amount it advanced to fund such
Bank's Loan, as determined by the Agent. If such amount is not received from
such Bank by the Agent immediately upon demand, the relevant Borrower will, on
demand, repay to the Agent the proceeds of the Loan attributable to such Bank
with interest thereon at a rate per annum equal to the interest rate applicable
to the relevant Loan, but without such payment being considered a payment or
prepayment of a Loan under Section 4.6 hereof, so that such Borrower will have
no liability under such Section with respect to such payment; provided, that
such repayment by the relevant Borrower shall not be deemed to release or
otherwise limit any claims or rights that such Borrower may have against any
Bank for the failure to fund any Loans hereunder.
Section 2. The Swing Line.
Section 2.1. Swing Loans. Subject to all of the terms and conditions
hereof, Harris Trust and Savings Bank ("Harris") agrees to make loans in U.S.
Dollars to the Borrowers under the Swing Line ("Swing Loans") which shall not in
the aggregate at any time outstanding exceed the lesser of (i) the Swing Line
Commitment or (ii) the difference between (x) the sum of the Revolving Credit
Commitments and Short-Term Revolving Credit Commitments in effect at such time
and (y) the Original Dollar Amount of all Loans and L/C Obligations outstanding
at
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the time of computation. Swing Loans may be made under the Revolving Credit
("Revolving Swing Loans") and, if the Revolving Credit is fully utilized, under
the Short-Term Revolving Credit ("Short-Term Swing Loans"). The Swing Line
Commitment shall be available to the Borrowers and may be availed of by either
Borrower from time to time and borrowings thereunder may be repaid and used
again during the period beginning on the Effective Date and ending on the
Termination Date; provided that Short-Term Swing Loans shall not be available
after the Short-Term Revolving Credit Termination Date; and provided further
that each Swing Loan must be repaid on the last day of the Interest Period
applicable thereto. Each Swing Loan shall be in an amount not less than $500,000
and in integral multiples of $100,000.
Section 2.2. Interest on Swing Loans. Each Swing Loan shall bear
interest at the Domestic Rate or Harris' Quoted Rate, provided that if any Swing
Loan is not paid when due (whether by lapse of time, acceleration or otherwise)
such Swing Loan shall bear interest, whether before or after judgment, until
payment in full thereof through the end of the Interest Period then applicable
thereto at a rate per annum equal to the sum of two percent (2%) plus the
Applicable Margin for Domestic Rate Loans under the relevant Credit plus the
interest rate which would otherwise be applicable thereto and, thereafter, at a
rate per annum equal to the sum of two percent (2%) plus the Applicable Margin
for Domestic Rate Loans under the relevant Credit plus the Domestic Rate from
time to time in effect. Interest on each Swing Loan shall be due and payable on
the last day of each Interest Period applicable thereto, and interest after
maturity (whether by lapse of time, acceleration or otherwise) shall be due and
payable upon demand.
Section 2.3. Requests for Swing Loans. The relevant Borrower shall give
Harris prior notice (which may be written or oral) no later than 3:00 p.m.
(Chicago time) on the date upon which such Borrower requests that any Swing Loan
be made, of the amount and date of such Swing Loan and the Interest Period
selected therefor. Within 30 minutes after receiving such notice, Harris shall
in its discretion quote an interest rate to the relevant Borrower at which
Harris would be willing to make such Swing Loan available to such Borrower for a
given Interest Period (the rate so quoted for a given Interest Period being
herein referred to as "Harris' Quoted Rate"). The Borrowers acknowledge and
agree that the interest rate quote is given for immediate and irrevocable
acceptance, and if the relevant Borrower does not so immediately accept Harris'
Quoted Rate for the full amount requested by such Borrower for such Swing Loan,
the Harris' Quoted Rate shall be deemed immediately withdrawn and such Swing
Loan shall bear interest at the Domestic Rate. Subject to all of the terms and
conditions hereof, the proceeds of such Swing Loan shall be made available to
the relevant Borrower on the date so requested at the offices of Harris in
Chicago, Illinois. Anything contained in the foregoing to the contrary
notwithstanding (i) the obligation of Harris to make Swing Loans shall be
subject to all of the terms and conditions of this Agreement and (ii) Harris
shall not be obligated to make more than one Swing Loan during any one day.
Section 2.4. Refunding Loans. In its sole and absolute discretion,
Harris may at any time, on behalf of the relevant Borrower (and each Borrower
hereby irrevocably authorizes Harris to act on its behalf for such purpose) and
with notice to the relevant Borrower, request each relevant Bank to make a
Domestic Rate Loan under the same Credits under which such Swing Loans were
originally made in an amount equal to such Bank's Percentage of the amount
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of the Swing Loans outstanding on the date such notice is given. Unless any of
the conditions of Section 8.2 are not fulfilled on such date, each relevant Bank
shall make the proceeds of its requested Revolving Loan or Short-Term Revolving
Loan, as the case may be, available to Harris, in immediately available funds,
at Harris' principal office in Chicago, Illinois, before 12:00 Noon (Chicago
time) on the Business Day following the day such notice is given. The proceeds
of such Revolving Loans or Short-Term Revolving Loans, as the case may be, shall
be immediately applied to repay such outstanding Swing Loans.
Section 2.5. Participations. If any Bank refuses or otherwise fails to
make a Revolving Loan or Short-Term Revolving Loan, as the case may be, when
requested by Harris pursuant to Section 2.4 above (because the conditions in
Section 8.2 are not satisfied or otherwise), such Bank shall, by the time and in
the manner such Revolving Loan or Short-Term Revolving Loan, as the case may be,
was to have been funded to Harris, purchase from Harris an undivided
participating interest in the relevant outstanding Swing Loans in an amount
equal to its Percentage of the aggregate principal amount of Swing Loans under
the relevant Credit that were to have been repaid with such Revolving Loans or
Short-Term Revolving Loan, as the case may be, provided no purchase of a
participation in a Swing Loan bearing interest at Harris' Quoted Rate need be
made until after expiration of the Interest Period applicable thereto. Each Bank
that so purchases a participation in a Swing Loan shall thereafter be entitled
to receive its Percentage of each payment of principal received on the relevant
Swing Loan and of interest received thereon accruing from the date such Bank
funded to Harris its participation in such Loan. The several obligations of the
Banks under this Section 2.5 shall be absolute, irrevocable and unconditional
under any and all circumstances whatsoever and shall not be subject to any set-
off, counterclaim or defense to payment which any Bank may have or have had
against either Borrower, any other Bank or any other Person whatever. Without
limiting the generality of the foregoing, such obligations shall not be affected
by any Default or Event of Default or by any reduction or termination of the
Commitments of any Bank, and each payment made by an Bank under this Section 2.5
shall be made without any offset, abatement, withholding or reduction
whatsoever.
Section 3. The Competitive Bid Facility.
Section 3.1. The Bid Loans. At any time before the Short-Term Revolving
Credit Termination Date, either Borrower may request the Banks to offer to make
uncommitted loans (each a "Bid Loan" and collectively the "Bid Loans") in the
manner set forth in this Section 3 and in amounts such that neither the Original
Dollar Amount nor the U.S. Dollar Equivalent of the aggregate principal amount
of all outstanding Short-Term Revolving Loans, Short-Term Swing Loans and Bid
Loans shall exceed the Short-Term Revolving Credit Commitments in effect at such
time. The Banks may, but shall have no obligation to, make such offers and the
Borrowers may, but shall have no obligation to, accept any such offers in the
manner set forth in this Section 3. Each Bank may offer to make Bid Loans in any
amount (whether greater than, equal to, or less than its Short-Term Revolving
Credit Commitment), subject to the limitation that the aggregate principal
amount of all Short-Term Revolving Loans, Short-Term Swing Loans and Bid Loans
outstanding at any time shall not at any time exceed the Short-Term Revolving
Credit Commitments then in effect and subject to the other conditions of this
Agreement. All Bid Loans shall be denominated in U.S. Dollars.
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Section 3.2. Requests for Bid Loans.
(a) Requests and Confirmations. In order to request a Borrowing of Bid
Loans (a "Bid Loan Request"), the relevant Borrower shall give telephonic notice
to the Agent no later than 2:00 p.m. (Chicago time) one Business Day before the
proposed date of such borrowing, which must be a Business Day (the "Borrowing
Date"), followed on the same day by a duly completed confirmation, delivered by
telecopier or other means of facsimile communication, substantially in the form
of Exhibit F hereto or otherwise containing the information required by this
Section 3.2 (a "Bid Loan Request Confirmation"), to be received by the Agent no
later than 2:30 p.m. (Chicago time) on such day. Bid Loan Request Confirmations
that do not conform substantially to the format of Exhibit F or otherwise
contain the information required by this Section 3.2 shall be rejected by the
Agent, and the Agent shall give telephonic notice to the relevant Borrower of
such rejection promptly after it determines (which determination shall be
conclusive) that the Bid Loan Request Confirmation does not substantially
conform to the format of Exhibit F or otherwise contain the information required
by this Section 3.2. Requests for Bid Loans shall in each case refer to this
Agreement and specify (i) the proposed Borrowing Date (which must be a Business
Day), (ii) the aggregate principal amount thereof (which shall not be less than
$5,000,000 and shall be an integral multiple of $1,000,000 and (iii) up to three
Interest Periods of 7-180 days with respect to the entire amount specified in
such Bid Loan Request (and, if so desired by the relevant Borrower, specifying
the maximum amount such Borrower would borrow for any specific Interest Period).
(b) Invitation to Bid. Upon receipt by the Agent of a Bid Loan Request
Confirmation that conforms substantially to the format of Exhibit F hereto or
otherwise contains the information required by this Section 3.2, the Agent
shall, by telephone (no later than 3:30 p.m. (Chicago time) on the same day the
Agent receives a Bid Loan Request Confirmation), promptly confirmed by a
telecopy or other form of facsimile communication in the form of Exhibit G
hereto, invite each Bank to bid, on the terms and conditions of this Agreement,
to make Bid Loans pursuant to the Bid Loan Request.
(c) Bids. Each Bank may, in its sole discretion, offer to make a Bid loan
or Bid Loans (a "Bid") to the relevant Borrower responsive to the Bid Loan
Request. Each Bid by a Bank must be received by the Agent by telephone not later
than 9:00 a.m. (Chicago time) on the proposed Borrowing Date promptly confirmed
in writing by a duly completed confirmation (a "Confirmation of Bid") delivered
by telecopier or other means of facsimile communication substantially in the
form of Exhibit H hereto or otherwise containing the information required by
this subsection (c), to be received by the Agent on the same day; provided,
however, that any Bid made by the Agent must be made by telephone to the
relevant Borrower by no later than 8:45 a.m. (Chicago time). Each Bid and each
Confirmation of Bid shall refer to this Agreement and specify (i) the principal
amount (which shall not be less than $5,000,000 and shall be an integral
multiple of $1,000,000) of each Bid Loan that the Bank is willing to make to the
relevant Borrower, (ii) the interest rate (which shall be computed on the basis
of a 360 day year for the actual number of days elapsed for a period equal to
the Interest Period applicable thereto) at which the Bank is prepared to make
each Bid Loan and (iii) the Interest Period applicable to each such offered Bid
Loan. The Agent shall reject any Bid if such Bid (i) does not specify all of the
information specified in the immediately preceding sentence, (ii) contains any
qualifying,
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conditional, or similar language, (iii) proposes terms other than or in addition
to those set forth in the Bid Loan Request to which it responds, or (iv) is
received by the Agent later than 9:00 a.m. (Chicago time). Any Bid submitted by
a Bank pursuant to this Section 3.2 shall be irrevocable and shall be promptly
confirmed by a telecopy or other form of facsimile communication in the form of
Exhibit H; provided that in all events the telephone Bid received by the Agent
shall be binding on the relevant Bank and shall not be altered, modified, or in
any other manner affected by any inconsistent terms contained in, or terms
missing from, the Bank's Confirmation of Bid. Each offer contained in a Bid to
make a Bid Loan in a certain amount, at a certain interest rate, and for a
certain Interest Period is referred to herein as an "Offer".
Section 3.3. Notice of Bids; Advice of Rate. The Agent shall give
telephonic notice to the Borrower no later than 10:00 a.m. (Chicago time) on the
proposed Borrowing Date of the number of Bids made, the interest rate(s) and
Interest Period(s) applicable to each Bid, the maximum principal amount bid at
each interest rate for each Interest Period, and the identity of the Bank making
such Bid. The Agent shall send a written summary of all Bids received by it to
the relevant Borrower on the same day.
Section 3.4. Acceptance or Rejection of Bids. The relevant Borrower may in
its sole and absolute discretion, subject only to the provisions of this Section
3.4, irrevocably accept or reject, in whole or in part, any Offer contained in a
Bid. No later than 10:30 a.m. (Chicago time) on the proposed Borrowing Date, the
relevant Borrower shall give telephonic notice to the Agent of whether and to
what extent it has decided to accept or reject any or all of the Offers
contained in the Bids made in response to a Bid Loan Request, which notice shall
be promptly confirmed by a telecopy or other form of facsimile communication to
be received by the Agent on the proposed Borrowing Date; provided, however, that
in the event any Offers are accepted (i) the relevant Borrower shall accept
Offers for any of the Interest Periods specified by such Borrower in its Bid
Loan Request Confirmation solely on the basis of ascending interest rates for
each such Interest Period, (ii) if such Borrower declines to borrow the maximum
principal amount of Bid Loans in respect of which Offers at a particular
interest rate for a particular Interest Period have been made, or is prevented
from doing so by any other condition hereof, then such Borrower shall accept a
pro rata portion of each such Offer, based as nearly as possible on the ratio of
the maximum aggregate principal amounts of Bid Loans for which each such Offer
was made by each Bank (provided that, if the available principal amount of Bid
Loans to be so allocated is not sufficient to enable Bid Loans to be so
allocated to each relevant Bank in integral multiples of $1,000,000, then the
Borrower may round allocations up or down in integral multiples not less than
$500,000 as it shall deem appropriate), (iii) the aggregate principal amount of
all Offers accepted by such Borrower shall not exceed the maximum amount
contained in the related Bid Loan Request Confirmation, and (iv) no Offer of a
Bid Loan shall be accepted in a principal amount less than $5,000,000. Any
telephone notice given by the relevant Borrower pursuant to this Section 3.4
shall be irrevocable and shall not be altered, modified, or in any other manner
affected by any inconsistent terms contained in, or terms missing from, any
written confirmation of such notice. Failure by the relevant Borrower to accept
an offer in accordance with the provisions of this Section 3.4 shall constitute
rejection of such Offer.
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Section 3.5. Notice of Acceptance or Rejection of Bids.
(a) Notice to Banks Making Bids. The Agent shall give telephonic notice to
each Bank whether any of the Offers contained in its Bid has been accepted (and
if so, in what amount, at what interest rate and for what Interest Period) no
later than 11:00 a.m. (Chicago time) on the proposed Borrowing Date, and each
successful bidder will thereupon become bound, subject to Section 9 and the
other applicable conditions hereof, to make the Bid Loan(s) in respect of which
its Bid has been accepted. As soon as practicable thereafter the Agent shall
send written notice substantially in the form of Exhibit I hereto to each such
successful bidder; provided, however, that failure to give such notice shall not
affect the obligation of such successful bidder to disburse its Bid Loans as
herein required.
(b) Disbursement of Bid Loans. Not later than 12:00 Noon (Chicago time) on
the Borrowing Date for each Borrowing of a Bid Loan(s), each Bank bound to make
a Bid Loan(s) in accordance with Section 3.5(a) shall make available to the
Agent the principal amount of each such Bid Loan in immediately available funds
at the Agent's principal office in Chicago, Illinois. The Agent shall promptly
thereafter make available to the relevant Borrower like funds as received from
each Bank, at such office of the Agent in Chicago, Illinois.
(c) Notice to the Banks. As soon as practicable after each Borrowing Date
for Bid Loans, the Agent shall notify each Bank of the aggregate amount of Bid
Loans advanced pursuant to a Bid Loan Request on such Borrowing Date, the
Interest Period(s) therefor, and the lowest and highest interest rates at which
Bid Loans were made for each Interest Period.
Section 3.6. Interest on Bid Loans. The Borrowers shall pay interest on the
unpaid principal amount of each Bid Loan from the applicable Borrowing Date to
the maturity thereof at the rate of interest applicable to such Bid Loan as
determined pursuant to the above provisions (calculated on the basis of a 360
day year for the actual number of days elapsed) payable on the last day of the
Interest Period applicable to such Bid Loan and at maturity (whether by
acceleration or otherwise), and, if the applicable Interest Period is longer
than 90 days, on each day occurring every 90 days after the date such Loan is
made.
Section 3.7. Telephonic Notice. Each Bank's telephonic notice to the Agent
of its Bid pursuant to Section 3.2(c), and the relevant Borrower's telephonic
acceptance of any Offer contained in a Bid pursuant to Section 3.4, shall be
irrevocable and binding on such Bank and the relevant Borrower and shall not be
altered, modified, or in any other manner affected by any inconsistent terms
contained in, or missing from, any telecopy or other confirmation of such
telephonic notice. It is understood and agreed by the parties hereto that the
Agent shall be entitled to act, or to fail to act, hereunder in reliance on its
records of any telephonic notices provided for herein and that the Agent shall
not incur any liability to any Person in so doing if its records conflict with
any telecopy or other confirmation of a telephone notice or otherwise, provided
that the Agent has acted, or failed to act, in good faith. It is further
understood and agreed by the parties hereto that the times of day as set forth
in this Section 3 are for the convenience of all the parties for providing
notices and that no party shall incur any liability or other responsibility for
any failure to provide such notices within the specified times; provided,
however, that the Agent shall have no obligation to notify the relevant Borrower
of any Bid
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received by it later than 9:00 a.m. (Chicago time) on the proposed Borrowing
Date, and no acceptance by the relevant Borrower of any Offer contained in a Bid
shall be effective to bind any Bank to make a Bid Loan, nor shall the Agent be
under any obligation to notify any Person of an acceptance, if notice of such
acceptance is received by the Agent later than 10:30 a.m. (Chicago time) on the
proposed Borrowing Date.
Section 4. General Provisions Applicable to all Loans; Reduction of Commitments.
Section 4.1. Interest Periods. As provided in Section 1.6(a) hereof in the
case of Revolving Loans and Short-Term Revolving Loans, in Section 2.3 in the
case of Swing Loans and in Section 3.2 in the case of Bid Loans, at the time of
each request to advance, continue, or create by conversion a Borrowing of Loans
(other than Domestic Rate Loans), the relevant Borrower shall select an Interest
Period applicable to such Loans from among the available options. The term
"Interest Period" means the period commencing on the date a Borrowing of Loans
is advanced, continued, or created by conversion and ending: (a) in the case of
Domestic Rate Loans, on the last day of the calendar quarter in which such
Borrowing is advanced, continued, or created by conversion (or on the last day
of the following quarter if such Loan is advanced, continued or created by
conversion on the last day of a calendar quarter), (b) in the case of
Eurocurrency Loans, one, two, three, or six months thereafter, (c) in the case
of Swing Loans, on the date one to five days thereafter as mutually agreed by
Harris and the relevant Borrower and (d) in the case of Bid Loans, on the date 7
to 180 days thereafter as the relevant Borrower may select; provided, however,
that:
(a) any Interest Period for a Borrowing of Revolving Loans consisting
of Domestic Rate Loans that otherwise would end after the Termination Date
shall end on the Termination Date;
(b) any Interest Period for a Borrowing of Short-Term Revolving Loans
consisting of Domestic Rate Loans that otherwise would end after the Short-
Term Revolving Credit Termination Date shall end on the Short-Term
Revolving Credit Termination Date;
(c) for any Borrowing of Revolving Loans consisting of Eurocurrency
Loans or for any Swing Loan, the Borrowers may not select an Interest
Period that extends beyond the Termination Date;
(d) for any Borrowing of Short-Term Revolving Loans consisting of
Eurocurrency Loans and for any Borrowing of Bid Loans, the Borrowers may
not select an Interest Period that extends beyond the Short-Term Revolving
Credit Termination Date;
(e) whenever the last day of any Interest Period would otherwise be a
day that is not a Business Day, the last day of such Interest Period shall
be extended to the next succeeding Business Day, provided that, if such
extension would cause the last day of an Interest Period for a Borrowing of
Eurocurrency Loans to occur in
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the following calendar month, the last day of such Interest Period shall be
the immediately preceding Business Day; and
(f) for purposes of determining an Interest Period for a Borrowing of
Eurocurrency Loans, a month means a period starting on one day in a
calendar month and ending on the numerically corresponding day in the next
calendar month; provided, however, that if there is no numerically
corresponding day in the month in which such an Interest Period is to end
or if such an Interest Period begins on the last Business Day of a calendar
month, then such Interest Period shall end on the last Business Day of the
calendar month in which such Interest Period is to end.
Section 4.2. Default Rate on Revolving Loans, Short-Term Revolving
Loans and Bid Loans. If any payment of principal on any Revolving Loan or any
Short-Term Revolving Loan or any Bid Loan is not made when due (whether by
acceleration or otherwise), such Loan shall bear interest from the date such
payment was due until paid in full, payable on demand, at a rate per annum equal
to:
(a) for any Domestic Rate Loan, the sum of two percent (2%) plus
the Applicable Margin for Domestic Rate Loans under the relevant Credit
plus the Domestic Rate from time to time in effect;
(b) for any Eurocurrency Loan, the sum of two percent (2%) plus the
rate of interest in effect thereon at the time of such default until the
end of the Interest Period applicable thereto and, thereafter, if such Loan
is denominated in U.S. Dollars, at a rate per annum equal to the sum of two
percent (2%) plus the Applicable Margin for Domestic Rate Loans under the
relevant Credit plus the Domestic Rate from time to time in effect or, if
such Loan is denominated in an Alternative Currency, at a rate per annum
equal to the sum of two percent (2%) plus the Applicable Margin for
Eurocurrency Loans under the relevant Credit plus the rate of interest per
annum as determined by the Agent (rounded upwards, if necessary, to the
nearest whole multiple of one-sixteenth of one percent (1/16%) at which
overnight or weekend deposits of the appropriate currency (or, if such
amount due remains unpaid more than three Business Days, then for such
other period of time not longer than six months as the Agent may elect in
its absolute discretion) for delivery in immediately available and freely
transferable funds would be offered by the Agent to major banks in the
interbank market upon request of such major banks for the applicable period
as determined above and in an amount comparable to the unpaid principal
amount of any such Eurocurrency Loan (or, if the Agent is not placing
deposits in such currency in the interbank market, then the Agent's cost of
funds in such currency for such period); and
(c) for any Bid Loan, the sum of two percent (2%) plus the rate of
interest in effect thereon at the time of such default until the end of the
Interest Period applicable thereto and, thereafter, at the rate per annum
equal to the sum of two percent (2%) plus the Applicable Margin for
Domestic Rate Loans under the Short-Term Revolving Credit plus the Domestic
Rate from time to time in effect.
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Section 4.3. Notes.
(a) Revolving Credit Notes. The Revolving Loans made to the Borrowers by a
Bank shall be evidenced by a single joint and several promissory note of the
Borrowers issued to such Bank in the form of Exhibit B hereto. Each such
promissory note is hereinafter referred to as a "Revolving Credit Note" and
collectively such promissory notes are referred to as the "Revolving Credit
Notes."
(b) Short-Term Revolving Credit Notes. The Short-Term Revolving Loans made
to the Borrowers by a Bank shall be evidenced by a single joint and several
promissory note of the Borrowers issued to such Bank in the form of Exhibit C
hereto. Each such promissory note is hereinafter referred to as a "Short-Term
Revolving Credit Note" and collectively such promissory notes are referred to as
the "Short-Term Revolving Credit Notes."
(c) Swing Line Note. All Swing Loans made to the Borrowers by Harris shall
be evidenced by a single joint and several promissory note of the Borrower
issued to Harris in the form of Exhibit D hereto (the "Swing Line Note"), such
Swing Line Note to be payable to the order of Harris in the principal amount of
its Swing Line Commitment and otherwise in the form of Exhibit D hereto.
(d) Bid Notes. All Bid Loans made to either Borrower by a Bank shall be
evidenced by a single joint and several promissory note of the Borrowers in the
form of Exhibit E hereto (individually a "Bid Note" and collectively the "Bid
Notes"), each such Bid Note to be payable to the order of the applicable Bank
and otherwise in the form of Exhibit E hereto.
(e) Notes Generally. Each Bank shall record on its books and records or on
a schedule to the appropriate Note the amount of each Loan advanced, continued,
or converted by it, all payments of principal and interest and the principal
balance from time to time outstanding thereon, the type of such Loan, and, for
any Fixed Rate Loan, the Interest Period and interest rate applicable thereto
and, for any Eurocurrency Loan, the currency in which such Loan is denominated.
The record thereof, whether shown on such books and records of a Bank or on a
schedule to any Note, shall be prima facie evidence as to all such matters;
provided, however, that the failure of any Bank to record any of the foregoing
or any error in any such record shall not limit or otherwise affect the
obligation of the Borrower to repay all Loans made to it hereunder together with
accrued interest thereon. At the request of any Bank and upon such Bank
tendering to the Borrowers the Note to be replaced, the Borrowers shall furnish
a new Note to such Bank to replace any outstanding Note, and at such time the
first notation appearing on a schedule on the reverse side of, or attached to,
such Note shall set forth the aggregate unpaid principal amount of all Loans, if
any, then outstanding thereon.
Section 4.4. Maturity of Loans. Each Revolving Loan shall mature and become
due and payable by the Borrowers on the Termination Date. Each Short-Term
Revolving Loan shall mature and become due and payable by the Borrowers on the
Short-Term Revolving Credit Termination Date. Each Swing Loan shall mature and
become due and payable by the Borrowers on the last day of the Interest Period
applicable thereto. Each Bid Loan shall mature and become due and payable by the
Borrowers on the last day of the Interest Period applicable thereto.
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Section 4.5. Prepayments. The Borrowers may prepay without premium or
penalty and in whole or in part (but, if in part, then: (i) if such Borrowing is
of Domestic Rate Loans, in an amount not less than $500,000, (ii) if such
Borrowing is of Eurocurrency Loans denominated in U.S. Dollars, in an amount not
less than $1,000,000, (iii) if such Borrowing is denominated in an Alternative
Currency, an amount for which the U.S. Dollar Equivalent is not less than
$1,000,000 and (iv) in an amount such that the minimum amount required for a
Borrowing pursuant to Section 1.5 hereof remains outstanding) any Borrowing of
Eurocurrency Loans upon three Business Days' prior notice to the Agent or, in
the case of a Borrowing of Domestic Rate Loans, notice delivered to the Agent no
later than 11:00 a.m. (Chicago time) on the date of prepayment, such prepayment
to be made by the payment of the principal amount to be prepaid and accrued
interest thereon to the date fixed for prepayment and, in the case of
Eurocurrency Loans, any compensation required by Section 4.6 hereof. Bid Loans
and Swing Loans bearing interest at Harris' Quoted Rate may only be paid on the
last day of the Interest Period then applicable to such Loans. The Agent will
promptly advise each Bank of any such prepayment notice it receives from the
Borrowers. Any amount of Revolving Loans paid or prepaid before the Termination
Date may, subject to the terms and conditions of this Agreement, be borrowed,
repaid and borrowed again. Any amount of Short-Term Revolving Loans paid or
prepaid before the Short-Term Revolving Credit Termination Date may, subject to
the terms and conditions of this Agreement, be borrowed, repaid and borrowed
again. All prepayments shall be applied first to the Short-Term Revolving Credit
until payment in full thereof and then to the Revolving Credit.
Section 4.6. Funding Indemnity for Fixed Rate Loans. If any Bank shall incur
any loss, cost or expense (including, without limitation, any loss (including
loss of profit), cost or expense incurred by reason of the liquidation or re-
employment of deposits or other funds acquired by such Bank to fund or maintain
any Fixed Rate Loan or the relending or reinvesting of such deposits or amounts
paid or prepaid to such Bank as a result of:
(a) any payment, prepayment or conversion of a Fixed Rate Loan on
a date other than the last day of its Interest Period,
(b) any failure (because of a failure to meet the conditions of
Section 8 or otherwise) by either Borrower to borrow or continue a Fixed
Rate Loan, or to convert a Domestic Rate Loan into a Fixed Rate Loan, on
the date specified in a notice given pursuant to Section 1.6(a) or 2.3 or
established pursuant to Section 1.6(c) hereof,
(c) any failure by either Borrower to make any payment of
principal on any Fixed Rate Loan when due (whether by acceleration or
otherwise), or
(d) any acceleration of the maturity of a Fixed Rate Loan as a
result of the occurrence of any Event of Default hereunder,
then, upon the demand of such Bank, the Borrowers shall pay to such Bank such
amount as will reimburse such Bank for such loss, cost or expense. If any Bank
makes such a claim for compensation, it shall provide to the Borrowers, with a
copy to the Agent, a certificate executed
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by an officer of such Bank setting forth the amount of such loss, cost or
expense in reasonable detail and such certificate shall be conclusive if
reasonably determined.
Section 4.7. Commitment Terminations. The Borrowers shall have the right at
any time and from time to time, upon five Business Days' prior written notice to
the Agent, to terminate the Revolving Credit Commitments and the Short-Term
Revolving Credit Commitments without premium or penalty, in whole or in part,
any partial termination to be (i) in an amount not less than $5,000,000, and
(ii) allocated ratably among the Banks in proportion to their respective
Percentages of the relevant Credit, provided that (w) the Revolving Credit
Commitments may not be terminated in whole before the termination of the Short-
Term Revolving Credit Commitments, (x) the Revolving Credit Commitments may not
be reduced to an amount less than the sum of the Original Dollar Amount of all
Revolving Loans, all Revolving Swing Loans and all L/C Obligations then
outstanding, (y) any reduction of the Revolving Credit Commitments to an amount
less than the Swing Line Commitment or L/C Commitment shall automatically reduce
the Swing Line Commitment or L/C Commitment, as the case may be, to such amount
as well and (z) the Short-Term Revolving Credit Commitments may not be reduced
to an amount less than the Original Dollar Amount of all Short-Term Revolving
Loans, all Short-Term Swing Loans and all Bid Loans then outstanding. The
Borrowers shall have the right at any time and from time to time, by notice to
the Agent, to terminate the Letter of Credit Commitment without premium or
penalty, in whole or in part. Any such termination of the Letter of Credit
Commitment shall not reduce the Revolving Credit Commitments unless the
Borrowers elect to do so in the manner provided in the preceding sentence. The
Agent shall give prompt notice to each Bank of any such termination of
Commitments. Any termination of Commitments pursuant to this Section 4.7 may not
be reinstated.
Section 5. Fees and Extensions; Place and Application of Payments.
Section 5.1. Fees. (a) Facility Fee. For the period from the Effective Date
to but not including the Termination Date, the Borrowers shall pay to the Agent,
for the ratable benefit of the Banks in accordance with their Percentages, a
facility fee accruing at the rate per annum equal to the Applicable Margin for
Facility Fee on the average daily amount of the Revolving Credit Commitments and
on the average daily amount of the Short-Term Revolving Credit Commitments, in
each case, whether or not in use. Such facility fee shall be payable quarterly
in arrears on the last day of each calendar quarter in each year (commencing
September 30, 2000) and on the Termination Date, unless the Revolving Credit
Commitments or the Short-Term Revolving Credit Commitments are terminated in
whole on an earlier date, in which event the fee for the period to but not
including the date of such termination shall be paid in whole on the date of
such termination.
(b) Letter of Credit Fees. On the date of issuance or extension, or
increase in the amount, of any Letter of Credit pursuant to Section 1.3 hereof,
the Borrowers shall pay to the Agent for its own account an issuance fee equal
to 1/8 of 1% (0.125%) of the face amount of (or of the increase in the face
amount of) such Letter of Credit. Quarterly in arrears, on the last day of each
calendar quarter (commencing September 30, 2000) the Borrowers shall pay to the
Agent, for the ratable benefit of the Banks in accordance with their
Percentages, a letter of credit fee at a rate per annum equal to the Applicable
Margin for Eurocurrency Loans under the
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Revolving Credit in effect during each day of such quarter applied to the daily
average face amount of Letters of Credit outstanding during such quarter. In
addition, the Borrowers shall pay to the Agent for its own account (i) the
Agent's standard issuance fee for each Letter of Credit and (ii) the Agent's
standard drawing, negotiation, amendment, and other administrative fees for each
Letter of Credit (whether a Commercial Letter of Credit or Standby Letter of
Credit); all the foregoing standard fees shall be retained by the Agent for its
own account (such standard fees referred to in the preceding clauses (i) and
(ii) may be established by the Agent from time to time).
(c) Closing Fees. On the Effective Date, the Borrowers shall pay to the
Agent, for the benefit of the Banks, the up front fees due to the Banks as
heretofore agreed.
(d) Agent Fees. The Borrowers shall pay to the Agent the fees agreed to
between the Agent and the Borrowers pursuant to a separate written letter
agreement dated as of June 28, 2000.
(e) Fee Calculations. All fees payable under this Section 4.1 shall be
computed on the basis of a year of 360 days for the actual number of days
elapsed.
Section 5.2. Extension of Termination Date and Short-Term Revolving Credit
Termination Date. (a) Revolving Credit. The Borrowers may advise the Agent in
writing of their desire to extend the Termination Date for an additional
calendar year, provided (i) such request is made not more than 60 days prior to,
and not less than 45 days prior to, the first and second anniversary dates of
this Agreement and (ii) not more than one such request for the extension of the
Termination Date may be made in any one calendar year. The Agent will promptly
inform the Banks of any such request, and each Bank shall notify the Agent in
writing within 30 days before the anniversary date following such request
whether it agrees to the requested extension. If a Bank fails to so notify the
Agent whether it agrees to such extension, such Bank shall be deemed to have
refused to grant the requested extension. Upon receipt by the Agent of the
written consent of all the Banks, the Termination Date shall be automatically
extended an additional year. Otherwise, the Termination Date will remain as then
scheduled. In no event shall the Termination Date be extended beyond September
10, 2005.
(b) Short-Term Revolving Credit. The Borrowers may advise the Agent in
writing of their desire to extend the Short-Term Revolving Credit Termination
Date for an additional 364 days, provided (i) such request is made not more than
60 days prior to, and not less than 45 days prior to, the first, second, third
and fourth anniversary dates of this Agreement and (ii) not more than one such
request for the extension of the Short-Term Revolving Credit Termination Date
may be made in any one calendar year. The Agent will promptly inform the Banks
of any such request, and each Bank shall notify the Agent in writing within 30
days before the anniversary date following such request whether it agrees to the
requested extension. If a Bank fails to so notify the Agent whether it agrees to
such extension, such Bank shall be deemed to have refused to grant the requested
extension. Upon receipt by the Agent of the written consent of all the Banks,
the Short-Term Revolving Credit Termination Date shall be automatically extended
an additional 364 days. Otherwise, the Short-Term Revolving Credit Termination
Date will remain
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as then scheduled. In no event shall the Short-Term Revolving Credit Termination
Date be extended beyond August 21, 2005.
Section 5.3. Place and Application of Payments. All payments of principal of
and interest on the Loans and the Reimbursement Obligations, and of all other
amounts payable by the Borrowers under this Agreement, shall be made by the
Borrowers to the Agent by no later than 1:00 p.m. (Chicago time) on the due date
thereof at the principal office of the Agent in Chicago, Illinois (or such other
location in the State of Illinois as the Agent may designate to the Borrowers)
or, if such payment is on a Reimbursement Obligation, no later than provided by
Section 1.3(c) hereof or, if such payment is to be made in an Alternative
Currency, no later than 1:00 p.m. local time at the place of payment to such
office as the Agent has previously specified in a notice to the Borrowers for
the benefit of the Person or Persons entitled thereto. Any payments received
after such time shall be deemed to have been received by the Agent on the next
Business Day. All such payments shall be made (i) in U.S. Dollars, in
immediately available funds at the place of payment, or (ii) in the case of
amounts payable hereunder in an Alternative Currency, in such Alternative
Currency in such funds then customary for the settlement of international
transactions in such currency, in each case without setoff or counterclaim. The
Agent will promptly thereafter cause to be distributed like funds relating to
the payment of principal or interest on Loans or commitment fees ratably to the
Banks, in each case to be applied in accordance with the terms of this
Agreement.
Section 6. Definitions; Interpretation.
Section 6.1. Definitions. The following terms when used herein have the
following meanings:
"Account" is defined in Section 10.4(b) hereof.
"Adjusted LIBOR" means a rate per annum determined in accordance with the
following formula:
Adjusted LIBOR = LIBOR
----------------------
1 - Eurocurrency Reserve Percentage
"Eurocurrency Reserve Percentage" means, for any Borrowing of Eurocurrency
Loans, the daily average for the applicable Interest Period of the maximum rate,
expressed as a decimal, at which reserves (including, without limitation, any
supplemental, marginal and emergency reserves) are imposed during such Interest
Period by the Board of Governors of the Federal Reserve System (or any
successor) on "eurocurrency liabilities", as defined in such Board's Regulation
D (or in respect of any other category of liabilities that includes deposits by
reference to which the interest rate on Eurocurrency Loans is determined or any
category of extensions of credit or other assets that include loans by
non-United States offices of any Bank to United States residents), subject to
any amendments of such reserve requirement by such Board or its successor,
taking into account any transitional adjustments thereto. For purposes of this
definition, the Eurocurrency Loans shall be deemed to be "eurocurrency
liabilities" as defined in Regulation D without benefit or
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credit for any prorations, exemptions or offsets under Regulation D. "LIBOR"
means, for an Interest Period for a Borrowing of Eurocurrency Loans, (a) the
LIBOR Index Rate for such Interest Period, if such rate is available, and (b) if
the LIBOR Index Rate cannot be determined, the average rate of interest per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) at which
deposits in U.S. Dollars or the relevant Alternative Currency, as appropriate,
in immediately available funds are offered to the Agent at 11:00 a.m. (London,
England time) two Business Days before the beginning of such Interest Period by
major banks in the interbank eurocurrency market for delivery on the first day
of and for a period equal to such Interest Period in an amount equal or
comparable to the principal amount of the Eurocurrency Loan scheduled to be made
by the Agent as part of such Borrowing. "LIBOR Index Rate" means, for any
Interest Period, the rate per annum (rounded upwards, if necessary, to the next
higher one hundred-thousandth of a percentage point) for deposits in U.S.
Dollars or the relevant Alternative Currency, as appropriate, for a period equal
to such Interest Period, which appears on the appropriate Telerate Page as of
11:00 a.m. (London, England time) on the day two Business Days before the
commencement of such Interest Period. "Telerate Page" means the display
designated on the Telerate Service (or such other service as may be nominated by
the British Bankers' Association as the information vendor for the purpose of
displaying British Bankers' Association Interest Settlement Rates for deposits
of U.S. Dollar deposits (currently displayed on Page 3750) or of the relevant
Alternative Currency, as appropriate.
"Affiliate" means any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to control another Person for purposes of this
definition if such Person possesses, directly or indirectly, the power to
direct, or cause the direction of, the management and policies of the other
Person, whether through the ownership of voting securities, common directors,
trustees or officers, by contract or otherwise; provided that, in any event for
purposes of this definition, any Person that owns, directly or indirectly, 5% or
more of the securities having the ordinary voting power for the election of
directors or governing body of a corporation or 5% or more of the partnership or
other ownership interests of any other Person (other than as a limited partner
of such other Person) will be deemed to control such corporation or other
Person.
"Agent" means Harris Trust and Savings Bank in its capacity as
administrative agent hereunder for the Banks and any successor pursuant to
Section 12.7 hereof.
"Alternative Currency" means Deutsche Marks, Pounds Sterling, French
Francs, Euros, Dutch Guilders, Japanese Yen and any other currency (other than
U.S. Dollars), in each case only to the extent such currencies are freely
transferable and convertible into U.S. Dollars and are traded and readily
available to each Bank in the London interbank market.
"Applicable Margin", with respect to Eurocurrency Loans, Domestic Rate
Loans, and the facility fee payable pursuant to Section 4.1(a) hereof, means the
following:
Applicable Margin for Eurocurrency Loans under the 0.40%
Revolving Credit:
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Applicable Margin for Eurocurrency Loans under the 0.425%
Short-Term Revolving Credit:
Applicable Margin for Domestic Rate Loans under the 0.00%
Revolving Credit:
Applicable Margin for Domestic Rate Loans under the 0.00%
Short-Term Revolving Credit:
Applicable Margin for facility fee under the 0.10%
Revolving Credit:
Applicable Margin for facility fee under the 0.075%
Short-Term Revolving Credit:
"Application" is defined in Section 1.3(b) hereof.
"Authorized Representative" means, for each Borrower, those persons shown
on the list of officers provided by such Borrower pursuant to Section 8.1(f)
hereof, or on any update of such list provided by such Borrower to the Agent, or
any further or different officer of such Borrower so named by any Authorized
Representative of such Borrower in a written notice to the Agent.
"Bank" is defined in the first paragraph of this Agreement and includes the
Agent in its capacity as issuer of Letters of Credit and holder of L/C
Obligations after giving effect to each Participating Bank's interest therein.
"Bid" is defined in Section 3.2(c) hereof.
"Bid Loan" is defined in Section 3.1 hereof.
"Bid Loan Request" is defined in Section 3.2(a) hereof.
"Bid Loan Request Confirmation" is defined in Section 3.2(a) hereof.
"Bid Note" is defined in Section 4.3(d) hereof.
"Borrowers" is defined in the first paragraph of this Agreement.
"Borrowing" means the total of Loans of a single type advanced, continued
for an additional Interest Period, or converted from a different type into such
type by the Banks on a single date and for a single Interest Period. Borrowings
of Revolving Loans and Short-Term Revolving Loans are made and maintained
ratably from each of the Banks according to their Percentages. Borrowings of a
Bid Loan or Bid Loans are made from a Bank or Banks in accordance with the
procedures set forth in Section 3 hereof. A Borrowing is "advanced" on the
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day Banks advance funds comprising such Borrowing to the relevant Borrower, is
"continued" on the date a new Interest Period for the same type of Loans
commences for such Borrowing, and is "converted" when such Borrowing is changed
from one type of Loan to another, all as requested by the relevant Borrower
pursuant to Section 1.6(a) in the case of Revolving Loans and Short-Term
Revolving Loans and Section 3.2 in the case of Bid Loans.
"Borrowing Date" is defined in Section 3.2(a) hereof.
"Business Day" means any day other than a Saturday or Sunday on which Banks
are not authorized or required to close in Chicago, Illinois and, if the
applicable Business Day relates to the borrowing or payment of a Eurocurrency
Loan, on which banks are dealing in U.S. Dollar deposits or the relevant
Alternative Currency in the interbank market in London, England and, if the
applicable Business Day relates to the borrowing or payment of a Eurocurrency
Loan denominated in an Alternative Currency, on which banks and foreign exchange
markets are open for business in the city where disbursements of or payments on
such Loan are to be made.
"Capital Expenditures" means, for any period, the capital expenditures of
Gallagher and its Subsidiaries during such period as defined and classified in
accordance with GAAP.
"Capital Lease" means any lease of Property which, in accordance with GAAP,
would be required to be capitalized on the balance sheet of the lessee.
"Capitalized Lease Obligation" means the amount of the liability shown on
the balance sheet of any Person in respect of a Capital Lease as determined in
accordance with GAAP.
"Change in Control" means and includes any of the following:
(a) any person or group, as defined in Sections 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934, as amended, is or becomes the
beneficial owner, directly or indirectly, of 50% or more of the Voting
Stock of Gallagher; or
(b) during any period of twelve consecutive calendar months,
individuals who at the beginning of such period constituted the Board of
Directors of Gallagher, together with any new directors whose election by
the Board of Directors of Gallagher or nomination for election by
Gallagher's stockholders was approved by at least two-thirds of the
directors then still in office who either were directors at the beginning
of the period or whose election was previously so approved, cease for any
reason other than death or disability to constitute at least a majority of
the directors then in office; or
(c) the stockholders of Gallagher shall approve the sale of all or
substantially all of the assets of Gallagher or any merger, consolidation,
issuance of securities or purchase of assets, the result of which would be
the occurrence of any event described in clause (a) or (b) above.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto.
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"Commercial Letter of Credit" means a Letter of Credit that finances a
commercial transaction by paying part or all of the purchase price for goods
against delivery of a document of title covering such goods and any other
required documentation.
"Commitments" means the Revolving Credit Commitments, the Short-Term
Revolving Credit Commitments, the Swing Line Commitment and the L/C Commitment.
"Compliance Certificate" means a written certificate in the form of Exhibit
J hereto.
"Confirmation of Bid" is defined in Section 3.2(c) hereof.
"Controlled Group" means, with respect to each Borrower, all members of a
controlled group of corporations and all trades and businesses (whether or not
incorporated) under common control which, together with such Borrower or any of
its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Credit" means either the Revolving Credit or the Short-Term Revolving
Credit.
"Credit Event" means the advancing of any Loan, the continuation of or
conversion into a Eurocurrency Loan, or the issuance of, or extension of the
expiration date or increase in the amount of, any Letter of Credit.
"Current Maturities" means, as of any date the same is to be determined,
all payments of principal due under the terms of any Funded Debt within twelve
calendar months of such date.
"Default" means any event or condition the occurrence of which would, with
the passage of time or the giving of notice, or both, constitute an Event of
Default.
"Documentation Agent" is defined in the first paragraph of this Agreement.
"Domestic Rate" means for any day the greater of:
(i) the rate of interest announced by the Agent from time to time as
its prime commercial rate, or equivalent, as in effect on such day, with
any change in the Domestic Rate resulting from a change in said prime
commercial rate to be effective as of the date of the relevant change in
said prime commercial rate; or
(ii) the sum of (x) the rate determined by the Agent to be the
average (rounded upwards, if necessary, to the next higher 1/100 of 1%) of
the rates per annum quoted to the Agent at approximately 10:00 a.m.
(Chicago time) (or as soon thereafter as is practicable) on such day (or,
if such day is not a Business Day, on the immediately preceding Business
Day) by two or more Federal funds brokers selected by the Agent for the
sale to the Agent at face value of Federal funds in an amount comparable to
the principal amount owed to the Agent for which such rate is being
determined, plus (y) 1/2 of 1%.
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"Domestic Rate Loan" means a Revolving Loan or a Short-Term Revolving Loan
bearing interest prior to maturity at a rate specified in Section 1.3(a) hereof.
"EBITDAR" means, with reference to any period, Net Income for such period
plus all amounts deducted in arriving at such Net Income amount in respect of
(i) Interest Expense for such period, plus (ii) federal, state and local income
taxes for such period, plus (iii) all amounts properly charged for depreciation
of fixed assets and amortization of intangible assets during such period on the
books of Gallagher and its Subsidiaries, plus (iv) the aggregate amount of
payments required to be made by Gallagher and its Subsidiaries during such
period in respect of leases or similar arrangements (including without
limitation all payments required under operating and Capital Leases under which
Gallagher or any Subsidiary is liable as lessee).
"Effective Date" means the date on which the Agent has received signed
counterpart signature pages of this Agreement from each of the signatories (or,
in the case of a Bank, confirmation that such Bank has executed such a
counterpart and dispatched it for delivery to the Agent) and the documents
required by Section 8.1 hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute thereto.
"Eurocurrency Loan" means a Revolving Loan or a Short-Term Revolving Loan
bearing interest prior to maturity at the rate specified in Section 1.4(b)
hereof.
"Event of Default" means any of the events or circumstances specified in
Section 10.1 hereof.
"Existing L/Cs" means the outstanding letters of credit issued by Harris
prior to the date hereof, all of which are listed and described on Schedule
1.3(a) hereof.
"Federal Funds Rate" means the fluctuating interest rate per annum
described in part (x) of clause (ii) of the definition of Domestic Rate.
"Fixed Charge Coverage Ratio" means, as of any time the same is to be
determined, the ratio of (x) (i) EBITDAR during the four most recently completed
fiscal quarters minus (ii) Capital Expenditures during the same such period
minus (iii) Restricted Payments during the same such period to (y) the sum of
(i) Interest Expense during the same such four fiscal quarter period, (ii)
Current Maturities during the same such period and (iii) the aggregate amount of
payments required to be made by Gallagher and its Subsidiaries during such
period in respect of leases or similar arrangements (including without
limitation all payments required under operating and Capital Leases under which
Gallagher or any Subsidiary is liable as lessee).
"Fixed Rate Loans" shall mean Eurocurrency Loans, Swing Loans bearing
interest at Harris' Quoted Rate and Bid Loans, unless context in which such term
is used shall otherwise require.
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"Funded Debt" means, at any time the same is to be determined, the
aggregate of all Indebtedness for Borrowed Money of Gallagher and its
Subsidiaries at such time, plus all Indebtedness for Borrowed Money of any other
Person which is directly or indirectly guaranteed by Gallagher or any of its
Subsidiaries or which Gallagher or any of its Subsidiaries has agreed
(contingently or otherwise) to purchase or otherwise acquire or in respect of
which Gallagher or any of its Subsidiaries has otherwise assured a creditor
against loss.
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied by Gallagher and its Subsidiaries on a basis consistent
with the preparation of Gallagher's most recent financial statements furnished
to the Banks pursuant to Section 7.5 hereof.
"Harris" is defined in Section 2.1 hereof.
"Harris' Quoted Rate" is defined in Section 2.3 hereof.
"Indebtedness for Borrowed Money" means for any Person (without
duplication) (i) all indebtedness created, assumed or incurred in any manner by
such Person representing money borrowed (including by the issuance of debt
securities), (ii) all indebtedness for the deferred purchase price of property
or services (other than trade accounts payable arising in the ordinary course of
business which are not more than 90 days past due), (iii) all indebtedness
secured by any Lien upon Property of such Person, whether or not such Person has
assumed or become liable for the payment of such indebtedness, (iv) all
Capitalized Lease Obligations of such Person and (v) all obligations of such
Person on or with respect to letters of credit, bankers' acceptances and other
extensions of credit whether or not representing obligations for borrowed money.
"Interest Expense" means, with reference to any period, the sum of all
interest charges (including imputed interest charges with respect to Capitalized
Lease Obligations and all amortization of debt discount and expense) of
Gallagher and its Subsidiaries for such period determined in accordance with
GAAP.
"Interest Period" is defined in Section 4.1 hereof.
"L/C Commitment" means $50,000,000, as reduced pursuant to the terms
hereof.
"L/C Documents" means the Letters of Credit, any draft or other document
presented in connection with a drawing thereunder, the Applications and this
Agreement.
"L/C Obligations" means the aggregate undrawn face amounts of all
outstanding Letters of Credit and all unpaid Reimbursement Obligations.
"Lending Office" is defined in Section 11.4 hereof.
"Letter of Credit" is defined in Section 1.3(a) hereof.
"LIBOR" is defined in Section 1.4(b) hereof.
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"Lien" means any mortgage, lien, security interest, pledge, charge or
encumbrance of any kind in respect of any Property, including the interests of a
vendor or lessor under any conditional sale, Capital Lease or other title
retention arrangement.
"Loan" means and includes Revolving Loans, Short-Term Revolving Loans,
Swing Loans and Bid Loans, and each of them singly; and the term "type" of Loan
refers to its status as a Revolving Loan, a Short-Term Revolving Loan, a Swing
Loan or a Bid Loan, or, if a Revolving Loan or a Short-Term Revolving Loan, to
its status as a Domestic Rate Loan or Eurocurrency Loan.
"Loan Documents" means this Agreement, the Notes, the Applications, the
Letters of Credit, and each other instrument or document to be delivered
hereunder or thereunder or otherwise in connection therewith.
"Net Income" means, with reference to any period, the net income (or net
loss) of Gallagher and its Subsidiaries for such period as computed on a
consolidated basis in accordance with GAAP, and, without limiting the foregoing,
after deduction from gross income of all expenses and reserves, including
reserves for all taxes on or measured by income.
"Net Worth" means, at any time the same is to be determined, the total
shareholders' equity (including capital stock, additional paid-in capital and
retained earnings after deducting treasury stock, but excluding minority
interests in Subsidiaries) which would appear on the balance sheet of Gallagher
and its Subsidiaries determined on a consolidated basis in accordance with GAAP.
"Notes" means and includes Revolving Credit Notes, the Short-Term Revolving
Credit Notes, the Swing Line Note and the Bid Notes, unless the context in which
such term is used shall otherwise require.
"Obligations" means all obligations of each Borrower to pay principal and
interest on the Loans and the L/C Obligations, all fees and charges payable
hereunder, and all other payment obligations of the Borrowers, and either of
them, arising under or in relation to any Loan Document, in each case whether
now existing or hereafter arising, due or to become due, direct or indirect,
absolute or contingent, and howsoever evidenced, held or acquired.
"Offer" is defined in Section 3.2(c) hereof.
"Original Dollar Amount" means the amount of any Obligation denominated in
U.S. Dollars and, in relation to any Loan denominated in an Alternative
Currency, the U.S. Dollar Equivalent of such Loan on the day it is advanced or
continued for an Interest Period, and, in relation to any L/C Obligation
denominated in an Alternative Currency, the U.S. Dollar Equivalent of such L/C
Obligation on the day such amount is being computed.
"Overnight Eurocurrency Rate" shall mean the rate of interest per annum as
determined by the Agent (rounded upwards, if necessary, to the nearest whole
multiple of one-sixteenth of one percent (1/16 of 1%)) at which overnight or
weekend deposits of the appropriate currency for
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delivery in immediately available and freely transferable funds would be offered
by the Agent to major banks in the interbank market upon request of such major
banks for the applicable period and in an amount comparable to the unpaid
principal amount of the drawing (or, if the Agent is not placing deposits in
such currency in the interbank market, then the Agent's cost of funds in such
currency for such period).
"Participating Bank" is defined in Section 1.3(d) hereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to any or all of its functions under ERISA.
"Percentage" means, for each Bank, (a) with respect to the Revolving
Credit, the percentage of the Revolving Credit Commitments represented by such
Bank's Revolving Credit Commitment or, if the Revolving Credit Commitments have
been terminated, the percentage held by such Bank (including through
participation interests in L/C Obligations and Swing Loans) of the aggregate
principal amount of all Revolving Loans, Swing Loans and L/C Obligations then
outstanding and (b) with respect to the Short-Term Revolving Credit, the
percentage of the Short-Term Revolving Credit Commitments represented by such
Bank's Short-Term Revolving Credit Commitment or, if the Short-Term Revolving
Credit Commitments have been terminated, the percentage held by such Bank of the
aggregate principal amount of all Short-Term Revolving Loans then outstanding.
"Person" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization or any other entity or
organization, including a government or any agency or political subdivision
thereof.
"Plan" means any employee pension benefit plan covered by Title IV of ERISA
or subject to the minimum funding standards under Section 412 of the Code that
either (i) is maintained by a member of the Controlled Group for employees of a
member of the Controlled Group or (ii) is 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 Controlled Group is then making
or accruing an obligation to make contributions or has within the preceding five
plan years made contributions.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Reimbursement Obligation" is defined in Section 1.3(c) hereof.
"Required Banks" means, as of the date of determination thereof, Banks
holding at least 66-2/3% of the Percentages.
"Restricted Payment" means for any Person (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class or
series of its capital stock, now or hereafter outstanding, except a dividend
payable solely in shares of that class of stock to the holders of that class or
(ii) any Restricted Repurchase.
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"Restricted Repurchase" means for any Person, any redemption, retirement,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of its capital stock
"Revolving Credit" is defined in the first paragraph of this Agreement.
"Revolving Credit Note" is defined in Section 4.3(a) hereof.
"Revolving Loan" is defined in Section 1.1 hereof.
"Revolving Swing Loan" is defined in Section 2.1 hereof.
"Set-Off" is defined in Section 14.7 hereof.
"Short-Term Revolving Credit" is defined in the first paragraph of this
Agreement.
"Short-Term Revolving Credit Note" is defined in Section 4.3(b) hereof.
"Short-Term Revolving Credit Termination Date" means September 9, 2001,
subject to any extension of such date pursuant to Section 5.2(b) hereof.
"Short-Term Revolving Loan" is defined in Section 1.2 hereof.
"Short-Term Swing Loan" is defined in Section 2.1 hereof.
"Standby Letter of Credit" means a Letter of Credit that is not a
Commercial Letter of Credit.
"subsidiary" means, as to any particular parent corporation, any
corporation or other Person more than 50% of the Voting Stock of which is at the
time directly or indirectly owned by such parent corporation and/or one or more
corporations which are themselves subsidiaries of such parent corporation. The
term "Subsidiary" shall mean a subsidiary of Gallagher or AJG, as the context
may required.
"Swing Line Commitment" means $30,000,000, as reduced pursuant to the terms
hereof.
"Swing Line Note" is defined in Section 4.3(c) hereof.
"Swing Loans" is defined in Section 2.1 hereof.
"Syndication Agent" is defined in the first paragraph of this Agreement.
"Termination Date" means September 10, 2003, subject to any extension of
such date pursuant to Section 5.2(a) hereof.
"Unfunded Vested Liabilities" means, for any Plan at any time, the amount
(if any) by which the present value of all vested nonforfeitable accrued
benefits under such Plan exceeds the
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fair market value of all Plan assets allocable to such benefits, all determined
as of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the Controlled
Group to the PBGC or the Plan under Title IV of ERISA.
"U.S. Dollar Equivalent" means the amount of U.S. Dollars which would
be realized by converting the Alternative Currency into U.S. Dollars in the spot
market at the exchange rate quoted by the Agent, at approximately 11:00 a.m.
(London time) two Business Days prior to the date on which a computation thereof
is required to be made, to major banks in the interbank foreign exchange market
for the purchase of U.S. Dollars for such Alternative Currency.
"U.S. Dollars" and "$" each means the lawful currency of the United
States of America.
"Voting Stock" of any Person means the capital stock of any class or
classes or other equity interests (however designated) having ordinary voting
power for the election of directors or similar governing body of such Person,
other than stock or other equity interests having such power only by reason of
the happening of a contingency.
"Welfare Plan" means a "welfare plan", as defined in Section 3(1) of
ERISA.
"Wholly-Owned Subsidiary" means a Subsidiary of which all of the
issued and outstanding shares of capital stock (other than directors' qualifying
shares as required by law) or other equity interests are owned by either
Borrower and/or one or more Wholly-Owned Subsidiaries of such Borrower within
the meaning of this definition.
Section 6.2. Interpretation. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined. The words
"hereof", "herein", and "hereunder" and words of like import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All references to time of day herein are references
to Chicago, Illinois time unless otherwise specifically provided. Where the
character or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, it shall be done in
accordance with GAAP except where such principles are inconsistent with the
specific provisions of this Agreement.
Section 7. Representations and Warranties.
Each Borrower hereby represents and warrants to the Agent and each Bank as
to itself and, where the following representations and warranties apply to
Subsidiaries, as to each of its Subsidiaries, as follows:
Section 7.1. Organization and Qualification. Each Borrower is duly
organized, validly existing and in good standing as a corporation under the laws
of the State of Delaware, has full and adequate corporate power to own its
Property and conduct its business as now conducted, and is duly licensed or
qualified and in good standing in each jurisdiction in which the nature of the
business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, except where the failure to be so
licensed or qualified could not
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reasonably be expected to have a materially adverse effect on Gallagher and its
Subsidiaries taken as a whole.
Section 7.2. Subsidiaries. Each Subsidiary is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated or organized, as the case may be, has full and adequate power to
own its Property and conduct its business as now conducted, and is duly licensed
or qualified and in good standing in each jurisdiction in which the nature of
the business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, except where the failure to be so
licensed or qualified could not reasonably be expected to have a materially
adverse effect on Gallagher and its Subsidiaries taken as a whole. Schedule 7.2
(as the same may be amended from time to time by Gallagher's delivery to the
Agent of an updated Schedule 7.2) hereto identifies each Subsidiary, the
jurisdiction of its incorporation or organization, as the case may be, the
percentage of issued and outstanding shares of each class of its capital stock
or other equity interests owned by Gallagher and its Subsidiaries and, if such
percentage is not 100% (excluding directors' qualifying shares as required by
law), a description of each class of its authorized capital stock and other
equity interests and the number of shares of each class issued and outstanding.
All of the outstanding shares of capital stock and other equity interests of
each Subsidiary are validly issued and outstanding and fully paid and
nonassessable and all such shares and other equity interests indicated on
Schedule 7.2 (as amended from time to time) as owned by Gallagher or any of its
Subsidiaries are owned, beneficially and of record, by Gallagher or such
Subsidiary free and clear of all Liens. There are no outstanding commitments or
other obligations of any Subsidiary to issue, and no options, warrants or other
rights of any Person to acquire, any shares of any class of capital stock or
other equity interests of any Subsidiary.
Section 7.3. Corporate Authority and Validity of Obligations. Each Borrower
has full right and authority to enter into this Agreement and the other Loan
Documents to which it is a party, to make the borrowings herein provided for, to
issue its Notes in evidence thereof, and to perform all of its obligations
hereunder and under the other Loan Documents to which it is a party. Each Loan
Document to which it is a party has been duly authorized, executed and delivered
by each Borrower and constitutes the valid and binding obligation of such
Borrower enforceable in accordance with its terms except as enforceability may
be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law). No Loan Document, nor the performance or
observance by either Borrower of any of the matters and things herein or therein
provided for, contravenes or constitutes a default under any provision of law or
any judgment, injunction, order or decree binding upon either Borrower or any
provision of the charter, articles of incorporation or by-laws of either
Borrower or any covenant, indenture or agreement of or affecting either Borrower
or any of their respective Properties, or result in the creation or imposition
of any Lien on any Property of either Borrower.
Section 7.4. Use of Proceeds; Margin Stock. Each Borrower shall use the
proceeds of the Loans and other extensions of credit made available hereunder
for its general corporate and working capital purposes and for such other legal
and proper purposes as are consistent with all applicable laws. Neither Borrower
nor any Subsidiary is engaged in the business of extending
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credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System), and no part of the proceeds of any Loan or any other extension of
credit hereunder will be used to purchase or carry margin stock or used in a
manner that violates any provision of Regulation U or X of the Board of
Governors of the Federal Reserve System.
Section 7.5. Financial Reports. The consolidated balance sheet of Gallagher
and its Subsidiaries as at December 31, 1999, and the related consolidated
statements of income, retained earnings and cash flows of Gallagher and its
Subsidiaries for the fiscal year then ended, and accompanying notes thereto,
which financial statements are accompanied by the audit report of Ernst & Young
LLP, independent public accountants, and the unaudited interim consolidated
balance sheet of Gallagher and its Subsidiaries as at June 30, 2000, and the
related consolidated statements of income, retained earnings and cash flows of
Gallagher and its Subsidiaries for the six months then ended, heretofore
furnished to the Banks, fairly present the consolidated financial condition of
Gallagher and its Subsidiaries as at said dates and the consolidated results of
their operations and cash flows for the periods then ended in conformity with
generally accepted accounting principles applied on a consistent basis. Neither
Gallagher nor any Subsidiary has contingent liabilities which are material to it
other than as indicated on such financial statements or, with respect to future
periods, on the financial statements furnished pursuant to Section 9.5 hereof.
Section 7.6. No Material Adverse Change. Since December 31, 1999, there has
been no change in the condition (financial or otherwise) or business prospects
of Gallagher and its Subsidiaries taken as a whole except those occurring in the
ordinary course of business, none of which in the aggregate have been materially
adverse.
Section 7.7. Full Disclosure. The statements and information furnished to
the Bank in connection with the negotiation of this Agreement and the other Loan
Documents and the commitments by the Banks to provide all or part of the
financing contemplated hereby do not contain any untrue statements of a material
fact or omit a material fact necessary to make the material statements contained
herein or therein not misleading, the Banks acknowledging that as to any
projections furnished to the Banks, the Borrowers only represent that the same
were prepared on the basis of information and estimates the Borrowers believed
to be reasonable.
Section 7.8. Good Title. Gallagher and its Subsidiaries each have good and
defensible title to their assets as reflected on the most recent consolidated
balance sheet of Gallagher and its Subsidiaries furnished to the Banks, subject
to no Liens other than such thereof as are permitted by Section 9.12 hereof.
Section 7.9. Litigation and Other Controversies. There is no litigation or
governmental proceeding or labor controversy pending, nor to the knowledge of
either Borrower threatened, against either Borrower or any of their Subsidiaries
which if adversely determined would (a) impair the validity or enforceability
of, or impair the ability of the Borrowers to perform their obligations under,
this Agreement or any other Loan Document or (b) result in any material adverse
change in the financial condition, Properties, business or operations of
Gallagher and its Subsidiaries taken as a whole.
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Section 7.10. Taxes. All tax returns required to be filed by each Borrower
and their Subsidiaries in any jurisdiction have, in fact, been filed, and all
taxes, assessments, fees and other governmental charges upon each Borrower and
their Subsidiaries or upon any of their respective Properties, income or
franchises, which are shown to be due and payable in such returns, have been
paid, except for any taxes, assessments, fees or charges being contested in good
faith by appropriate proceeding and for which adequate reserves have been
provided. Neither Borrower knows of any proposed additional tax assessment
against it or its Subsidiaries for which adequate provision in accordance with
GAAP has not been made on its accounts. Adequate provisions in accordance with
GAAP for taxes on the books of each Borrower and each of their Subsidiaries have
been made for all open years, and for its current fiscal period.
Section 7.11. Approvals. No authorization, consent, license, or exemption
from, or filing or registration with, any court or governmental department,
agency or instrumentality, nor any approval or consent of the stockholders of
either Borrower or any other Person, is or will be necessary to the valid
execution, delivery or performance by the Borrowers of this Agreement or any
other Loan Document.
Section 7.12. Affiliate Transactions. Neither Borrower nor any Subsidiary
is a party to any contracts or agreements with any of its Affiliates (other than
with Wholly-Owned Subsidiaries of such Borrower) on terms and conditions which
are less favorable to such Borrower or such Subsidiary than would be usual and
customary in similar contracts or agreements between Persons not affiliated with
each other.
Section 7.13. Investment Company; Public Utility Holding Company. Neither
Borrower nor any Subsidiary is an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment Company Act of
1940, as amended, or a "public utility holding company" within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
Section 7.14. ERISA. Each Borrower and each other member of its Controlled
Group has fulfilled its obligations under the minimum funding standards of and
is in compliance in all material respects with ERISA and the Code to the extent
applicable to it and has not incurred any material liability to the PBGC or a
Plan under Title IV of ERISA other than a liability to the PBGC for premiums
under Section 4007 of ERISA. Neither Borrower nor any Subsidiary has any
material contingent liabilities with respect to any post-retirement benefits
under a Welfare Plan, other than liability for continuation coverage described
in article 6 of Title I of ERISA.
Section 7.15. Compliance with Laws. Each Borrower and each of its
Subsidiaries are in compliance with the requirements of all federal, state and
local laws, rules and regulations applicable to or pertaining to their
Properties or business operations (including, without limitation, the
Occupational Safety and Health Act of 1970, the Americans with Disabilities Act
of 1990, and laws and regulations establishing quality criteria and standards
for air, water, land and toxic or hazardous wastes and substances), non-
compliance with which could have a material adverse effect on the financial
condition, Properties, business or operations of Gallagher and its Subsidiaries
taken as a whole. Neither Borrower nor any Subsidiary has received notice to the
effect that its operations are not in compliance with any of the requirements of
applicable federal,
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state or local environmental, health and safety statutes and regulations or are
the subject of any governmental investigation evaluating whether any remedial
action is needed to respond to a release of any toxic or hazardous waste or
substance into the environment, which non-compliance or remedial action could
have a material adverse effect on the financial condition, Properties, business
or operations of Gallagher and its Subsidiaries taken as a whole.
Section 7.16. Other Agreements. Neither Borrower nor any Subsidiary is in
default under the terms of any covenant, indenture or agreement of or affecting
such Borrower, any Subsidiary or any of their Properties, which default if
uncured would have a material adverse effect on the financial condition,
Properties, business or operations of Gallagher and its Subsidiaries taken as a
whole.
Section 7.17. No Default. No Default or Event of Default has occurred and
is continuing.
Section 7.18. Insolvency. After giving effect to the execution and
delivery of the Loan Documents and the extensions of credit under this
Agreement: (a) neither Borrower will (i) be "insolvent," within the meaning of
such term as used in (S)101 of the "Bankruptcy Code", or Section 2 of either the
"UFTA" or the "UFCA", or as defined or used in any "Other Applicable Law" (as
those terms are defined below), or (ii) be unable to pay its debts generally as
such debts become due within the meaning of Section 548 of the Bankruptcy Code,
Section 4 of the UFTA or Section 6 of the UFCA, or (iii) have an unreasonably
small capital to engage in any business or transaction, whether current or
contemplated, within the meaning of Section 548 of the Bankruptcy Code, Section
4 of the UFTA or Section 5 of the UFCA; and (b) the obligations of each Borrower
under the Loan Documents and with respect to the Loans and Letters of Credit
will not be rendered avoidable under any Other Applicable Law. For purposes of
this Section, "Bankruptcy Code" means Title 11 of the United States Code, "UFTA"
means the Uniform Fraudulent Transfer Act, "UFCA" means the Uniform Fraudulent
Conveyance Act, and "Other Applicable Law" means any other applicable law
pertaining to fraudulent transfers or obligations voidable by creditors, in each
case as such law may be amended from time to time.
Section 7.19. Labor Controversies. There are no labor controversies
pending or threatened against either Borrower or any Subsidiary.
Section 8. Conditions Precedent.
The obligation of each Bank to advance, continue, or convert any Loan
(other than the continuation of, or conversion into, a Domestic Rate Loan), or
of the Agent to issue, extend the expiration date of or increase the amount of
any Letter of Credit, shall be subject to the following conditions precedent:
Section 8.1. Initial Credit Event. Before or concurrently with the initial
Credit Event:
(a) The Agent (or its counsel) shall have received from each party
hereto either (i) a counterpart of this Agreement signed on behalf of such party
or (ii) written evidence satisfactory to the Agent (which may include telecopy
transmission of a signed
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signature page of this Agreement) that such party has signed a counterpart of
this Agreement;
(b) The Agent shall have received (i) for each Bank, such Bank's duly
executed Revolving Credit Note dated the date hereof and otherwise in
compliance with the provisions of Section 4.3(a) hereof, (ii) for each Bank,
such Bank's duly executed Short-Term Revolving Credit Note dated the date
hereof and otherwise in compliance with the provisions of Section 4.3(b) hereof
and (iii) Harris' duly executed Swing Line Note of the Borrowers dated the date
hereof;
(c) The Agent shall have received for each Bank the favorable written
opinion of in-house counsel to the Borrowers in form and substance satisfactory
to the Agent and its counsel;
(d) The Agent shall have received copies of (i) a certificate of good
standing, for each Borrower, certified as of a date not earlier than 30 days
prior to the date hereof by the Delaware Secretary of State and (ii) each
Borrower's articles of incorporation, together with all amendments, and bylaws
and any amendments thereto, certified by its Secretary or an Assistant
Secretary
(e) The Agent shall have received copies of resolutions of each Borrower's
Board of Directors authorizing the execution and delivery of the Loan Documents
to which it is a party and the consummation of the transactions contemplated
thereby, together with specimen signatures of the persons authorized to execute
such documents on such Borrower's behalf, all certified in each instance by its
Secretary or Assistant Secretary;
(f) The Agent shall have received a list of each Borrower's Authorized
Representatives;
(g) The Agent shall have received evidence satisfactory to it that the
indebtedness of Gallagher and/or its Subsidiaries owing to Harris Trust and
Savings Bank, The Northern Trust Company, LaSalle Bank N.A. and Bank of
America, N.A. (except for the Existing L/Cs which are to become Letters of
Credit hereunder as set forth in Section 1.3 hereof), has been fully paid and
satisfied and that the credit facilities extended by such lenders have been
terminated;
(h) The Agent shall have received the fees required by Section 5.1(c)
hereof; and
(i) All legal matters incident to the execution and delivery of the Loan
Documents shall be reasonably satisfactory to the Banks.
Section 8.2. All Credit Events. As of the time of each Credit Event hereunder:
(a) In the case of a Borrowing of a Revolving Loan or a Short-Term
Revolving Loan, the Agent shall have received the notice required by Section
1.6 hereof
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(including any deemed notice under Section 1.6(c)); in the case of a Swing
Loan, Harris shall have received the notice required in Section 2.3 hereof;
in the case of a Borrowing of a Bid Loan, the Agent shall have received for
each relevant Bank a Bid Note duly executed by the Borrowers dated as of
the Borrowing Date and otherwise in compliance with the provisions of
Section 4.3(c) hereof and the notice required by Section 3.2 hereof; in the
case of the issuance of any Letter of Credit, the Agent shall have received
a duly completed Application for such Letter of Credit (along with the fees
required by Section 5.1(b) hereof); in the case of an extension or increase
in the amount of a Letter of Credit, the Agent shall have received a
written request therefor (along with the fees required by Section 5.1(b)
hereof) in a form acceptable to the Agent;
(b) Each of the representations and warranties set forth in Section 7
hereof shall be true and correct in all material respects as of said time,
taking into account any amendments to such Section made after the date of
this Agreement in accordance with its provisions, except that if any such
representation or warranty relates solely to an earlier date it need only
remain true as of such date;
(c) The Borrowers shall be in full compliance with all of the terms
and conditions of this Agreement and of the other Loan Documents, and no
Default or Event of Default shall have occurred and be continuing or would
occur as a result of such Credit Event;
(d) After giving effect to such Credit Event, the aggregate Original
Dollar Amount of Revolving Loans, Swing Loans and L/C Obligations then
outstanding shall not exceed the Revolving Credit Commitments;
(e) After giving effect to such Credit Event, the aggregate Original
Dollar Amount of Short-Term Revolving Loans then outstanding shall not
exceed the Short-Term Revolving Credit Commitments; and
(f) Such Credit Event shall not violate any order, judgment or decree
of any court or other authority or any provision of law or regulation
applicable to the Agent or any Bank (including, without limitation,
Regulation U or X of the Board of Governors of the Federal Reserve System).
Each request for a Borrowing hereunder and each request for the issuance
of, increase in the amount of, or extension of the expiration date of, a Letter
of Credit shall be deemed to be a representation and warranty by the Borrowers
on the date of such Credit Event as to the facts specified in paragraphs (a)
through (e), both inclusive, of this Section 8.2.
Section 9. Covenants.
The Borrowers covenant and agree that, so long as any Loan or any L/C
Obligation is outstanding hereunder, or any Commitment is available to or in use
by either Borrower hereunder, except to the extent compliance in any case is
waived in writing by the Required Banks:
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Section 9.1. Maintenance of Business. Each Borrower shall, and shall cause
each Subsidiary to, preserve and maintain its existence. Each Borrower shall,
and shall cause each Subsidiary to, preserve and keep in force and effect all
licenses, permits and franchises necessary to the proper conduct of its
business.
Section 9.2. Maintenance of Properties. Each Borrower shall maintain,
preserve and keep its property, plant and equipment necessary to the proper
conduct of its business in good repair, working order and condition (ordinary
wear and tear excepted) and shall from time to time make all needful and proper
repairs, renewals, replacements, additions and betterments thereto so that at
all times the efficiency thereof shall be fully preserved and maintained, and
shall cause each Subsidiary to do so in respect of Property owned or used by it
and necessary to the proper conduct of its business.
Section 9.3. Taxes and Assessments. Each Borrower shall duly pay and
discharge, and shall cause each Subsidiary to duly pay and discharge, all
material taxes, rates, assessments, fees and governmental charges upon or
against it or its Properties, in each case before the same become delinquent and
before penalties accrue thereon, unless and to the extent that the same are
being contested in good faith and by appropriate proceedings which prevent
enforcement of the matter under contest and adequate reserves are provided
therefor.
Section 9.4. Insurance. Each Borrower shall insure and keep insured, and
shall cause each Subsidiary to insure and keep insured, with good and
responsible insurance companies, all insurable Property owned by it which is of
a character usually insured by Persons similarly situated and operating like
Properties against loss or damage from such hazards and risks, and in such
amounts, as are insured by Persons similarly situated and operating like
Properties; and Borrower shall insure, and shall cause each Subsidiary to
insure, such other hazards and risks (including employers' and public liability
risks) with good and responsible insurance companies as and to the extent
usually insured by Persons similarly situated and conducting similar businesses.
The Borrowers shall upon written request furnish to the Agent and any Bank a
certificate setting forth in summary form the nature and extent of the insurance
maintained pursuant to this Section.
Section 9.5. Financial Reports. The Borrowers shall, and shall cause each
Subsidiary to, maintain a standard system of accounting in accordance with GAAP
and shall furnish to the Agent, each Bank and their duly authorized
representatives such information respecting the business and financial condition
of the Borrowers and their Subsidiaries as the Agent or such Bank may reasonably
request; and without any request, shall furnish to the Agent and the Banks:
(a) as soon as available, and in any event within 45 days after
the close of each fiscal quarter accounting period of Gallagher, a copy of
the consolidated and consolidating balance sheet of Gallagher and its
Subsidiaries as of the last day of such period and the consolidated and
consolidating statements of income, retained earnings and cash flows of
Gallagher and its Subsidiaries for the fiscal quarter and for the fiscal
year-to-date period then ended, each in reasonable detail showing in
comparative form the figures for the corresponding date and period in the
previous fiscal year, prepared by
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Gallagher in accordance with GAAP and certified to by its President or
Chief Financial Officer;
(b) as soon as available, and in any event within 90 days after
the close of each annual accounting period of Gallagher, a copy of the
consolidated and consolidating balance sheet of Gallagher and its
Subsidiaries as of the last day of the period then ended and the
consolidated and consolidating statements of income, retained earnings and
cash flows of Gallagher and its Subsidiaries for the period then ended, and
accompanying notes thereto, each in reasonable detail showing in
comparative form the figures for the previous fiscal year, accompanied by
an unqualified opinion thereon of Ernst & Young LLP or another firm of
independent public accountants of recognized national standing, selected by
Gallagher and satisfactory to the Required Banks, to the effect that the
financial statements have been prepared in accordance with GAAP and present
fairly in accordance with GAAP the consolidated financial condition of
Gallagher and its Subsidiaries as of the close of such fiscal year and the
results of their operations and cash flows for the fiscal year then ended
and that an examination of such accounts in connection with such financial
statements has been made in accordance with generally accepted auditing
standards and, accordingly, such examination included such tests of the
accounting records and such other auditing procedures as were considered
necessary in the circumstances;
(c) within the period provided in subsection (b) above, the
written statement of the accountants who certified the audit report thereby
required that in the course of their audit they have obtained no knowledge
of any Default or Event of Default, or, if such accountants have obtained
knowledge of any such Default or Event of Default, they shall disclose in
such statement the nature and period of the existence thereof;
(d) promptly after receipt thereof, any additional written
reports, management letters or other detailed information contained in
writing concerning significant aspects of either Borrower's or any
Subsidiary's operations and financial affairs given to it by its
independent public accountants;
(e) promptly after the sending or filing thereof, a copies of
all proxy statements, financial statements and reports which each Borrower
sends to its shareholders, and copies of all regular, periodic and special
reports and all registration statements which either Borrower files with
the Securities and Exchange Commission or any successor thereto or with any
national securities exchange; and
(f) promptly after knowledge thereof shall have come to the
attention of any responsible officer of either Borrower, written notice of
any threatened or pending litigation or governmental proceeding or labor
controversy against either Borrower or any Subsidiary which, if adversely
determined, would have a material adverse effect on the financial
condition, Properties, business or operations of either Borrower or any
Subsidiary or of the occurrence of any Default or Event of Default
hereunder.
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Each of the financial statements furnished to the Agent and the Banks pursuant
to subsections (a) and (b) of this Section shall be accompanied by a Compliance
Certificate signed by the President or Chief Financial Officer of Gallagher to
the effect that to the best of such officer's knowledge and belief no Default or
Event of Default has occurred during the period covered by such statements or,
if any such Default or Event of Default has occurred during such period, setting
forth a description of such Default or Event of Default and specifying the
action, if any, taken by the Borrowers to remedy the same. Such Compliance
Certificate shall also set forth the calculations supporting such statements in
respect of Sections 9.7, 9.8 and 9.9 of this Agreement.
Section 9.6. Inspection. Each Borrower shall, and shall cause each
Subsidiary to, permit the Agent, each Bank and each of their duly authorized
representatives and agents to visit and inspect any of the Properties, corporate
books and financial records of such Borrower and each Subsidiary, to examine and
make copies of the books of accounts and other financial records of such
Borrower and each Subsidiary, and to discuss the affairs, finances and accounts
of such Borrower and each Subsidiary with, and to be advised as to the same by,
its officers, employees and independent public accountants (and by this
provision each Borrower hereby authorizes such accountants to discuss with the
Agent and such Bank the finances and affairs of such Borrower and of each
Subsidiary) at such reasonable times and reasonable intervals as the Agent or
any such Bank may designate.
Section 9.7. Net Worth. Gallagher shall not at any time permit its Net
Worth to be less than $200,000,000.
Section 9.8. Debt to Net Worth Ratio. Gallagher shall not at any time
permit the ratio of Funded Debt to Net Worth to be more than 1.0 to 1.0.
Section 9.9. Fixed Charge Coverage Ratio. Gallagher shall, as of the last
day of each of its fiscal quarters, maintain its Fixed Charge Coverage Ratio for
the four fiscal quarters then ended at not less than 1.50 to 1.0.
Section 9.10. Indebtedness for Borrowed Money. The Borrowers shall not,
nor shall they permit any Subsidiary to, issue, incur, assume, create or have
outstanding any Indebtedness for Borrowed Money; provided, however, that the
foregoing shall not restrict nor operate to prevent:
(a) the Obligations;
(b) purchase money indebtedness and Capitalized Lease
Obligations secured by Liens permitted by Section 9.11(d) hereof in an
amount not to exceed $25,000,000 at any one time outstanding for the
Borrowers and their Subsidiaries in the aggregate; and
(c) Indebtedness for Borrowed Money other than that which is
permitted by either of the foregoing subsections (a) or (b) provided such
Indebtedness does not exceed $25,000,000 at any time outstanding for the
Borrowers and their Subsidiaries in the aggregate.
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Section 9.11. Liens. The Borrowers shall not, nor shall they permit any
Subsidiary to, create, incur or permit to exist any Lien of any kind on any
Property owned by such Borrower or such Subsidiary; provided, however, that the
foregoing shall not apply to nor operate to prevent:
(a) Liens arising by statute in connection with worker's
compensation, unemployment insurance, old age benefits, social security
obligations, taxes, assessments, statutory obligations or other similar
charges, good faith cash deposits in connection with tenders, contracts or
leases to which either Borrower or any Subsidiary is a party or other cash
deposits required to be made in the ordinary course of business, provided
in each case that the obligation is not for borrowed money and that the
obligation secured is not overdue or, if overdue, is being contested in
good faith by appropriate proceedings which prevent enforcement of the
matter under contest and adequate reserves have been established therefor;
(b) mechanics', workmen's, materialmen's, landlords', carriers',
or other similar Liens arising in the ordinary course of business with
respect to obligations which are not due or which are being contested in
good faith by appropriate proceedings which prevent enforcement of the
matter under contest;
(c) the pledge of assets for the purpose of securing an appeal,
stay or discharge in the course of any legal proceeding, provided that the
aggregate amount of liabilities of the Borrowers and their Subsidiaries
secured by a pledge of assets permitted under this subsection, including
interest and penalties thereon, if any, shall not be in excess of
$5,000,000 at any one time outstanding;
(d) Liens on Property of either Borrower or any of their
Subsidiaries created solely for the purpose of securing indebtedness
permitted by Section 9.10(b) hereof, representing or incurred to finance,
refinance or refund the purchase price of Property, provided that no such
Lien shall extend to or cover other Property of such Borrower or such
Subsidiary other than the respective Property so acquired, and the
principal amount of indebtedness secured by any such Lien shall at no time
exceed the original purchase price of such Property;
(e) leases or subleases granted to others in the ordinary course
of business and any interest or title of a lessor under any lease permitted
by this Agreement;
(f) customary rights of set off, revocation, refund or
chargeback under deposit agreements or under the Uniform Commercial Code in
favor of banks or other financial institution where either Borrower or any
Subsidiary maintains deposits in the ordinary course of business;
(g) Liens constituting encumbrances in the nature of zoning
restrictions, condemnations, easements, encroachments, covenants, rights of
way, minor defects, irregularities and rights or restrictions of record on
the title or use of real property, which do not materially detract from the
value of such property or materially impair the use thereof in the business
of either Borrower or any Subsidiary;
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(h) Liens on limited partnership interests of either Borrower in
favor of The Chase Manhattan Bank to secure contingent obligations of such
Borrower; and
(i) Liens other than those permitted by any of the foregoing
subsections (a) through (h) provided such Liens do not secure borrowed
money and provided further that such Liens secure obligations not exceeding
$5,000,000.
Section 9.12. Investments, Acquisitions, Loans, Advances and Guaranties.
Neither Borrower shall, nor shall they permit any Subsidiary to, directly or
indirectly, make, retain or have outstanding any investments (whether through
purchase of stock or obligations or otherwise) in, or loans or advances (other
than for travel advances, advances for relocation and other similar cash
advances made to employees in the ordinary course of business) to, any other
Person, or acquire all or any substantial part of the assets or business of any
other Person or division thereof, or be or become liable as endorser, guarantor,
surety or otherwise for any debt, obligation or undertaking of any other Person,
or otherwise agree to provide funds for payment of the obligations of another,
or supply funds thereto or invest therein or otherwise assure a creditor of
another against loss, or apply for or become liable to the issuer of a letter of
credit which supports an obligation of another (other than Letters of Credit
issued hereunder), or subordinate any claim or demand it may have to the claim
or demand of any other Person; provided, however, that the foregoing shall not
apply to nor operate to prevent:
(a) investments in direct obligations of the United States of
America or of any agency or instrumentality thereof whose obligations
constitute full faith and credit obligations of the United States of
America, provided that any such obligations shall mature within one year of
the date of issuance thereof;
(b) investments in commercial paper rated at least P-1 by
Moody's Investors Services, Inc. and at least A-1 by Standard & Poor's
Corporation maturing within 270 days of the date of issuance thereof;
(c) investments in certificates of deposit issued by any United
States commercial bank having capital and surplus of not less than
$100,000,000 which have a maturity of one year or less;
(d) investments in money market funds that invest solely, and
which are restricted by their respective charters to invest solely, in
investments of the type described in the immediately preceding subsections
(a), (b) and (c) above;
(e) endorsement of items for deposit or collection of commercial
paper received in the ordinary course of business;
(f) investments for which the projected tax credits exceed the
cost of such investments;
(g) investments in real estate limited partnerships not
exceeding $50,000,000 at any one time outstanding for the Borrowers and
their Subsidiaries in the aggregate;
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(h) investments in hedge funds;
(i) equity investments (including investments in preferred and
common stock) not exceeding $100,000,000 at any one time outstanding for
the Borrowers and their Subsidiaries in the aggregate;
(j) loans to employees not exceeding $10,000,000 at any one time
outstanding for the Borrowers and their Subsidiaries in the aggregate;
(k) intercompany loans and advances between the Borrowers and
guaranties by either Borrower of the obligations of the other provided that
such underlying obligations are not prohibited under the terms of this
Agreement;
(l) investments, guarantees and contingent obligations (other
than those which are permitted by subsections (a) through (k) above) not
exceeding $25,000,000 at any time outstanding for the Borrowers and their
Subsidiaries in the aggregate; and
(m) acquisitions of all or substantially all of the assets or
business of any other Person or division thereof, or all or any part of the
Voting Stock of or other equity interest in any Person (including as such
an acquisition, any action to participate as a joint venturer in any joint
venture or as a partner in any partnership), in each case if and so long as
(i) no Default or Event of Default exists or would exist after giving
effect to such acquisition, (ii) the Board of Directors or other governing
body of such Person whose Property or Voting Stock or other equity interest
is being so acquired has approved the terms of such acquisition and (iii)
such acquisition involves a line of business which is complementary to the
lines of business in which the Borrower or the Subsidiary, as the case may
be, making such acquisition is engaged on the Effective Date.
In determining the amount of investments, acquisitions, loans, advances and
guarantees permitted under this Section, investments and acquisitions shall
always be taken at the original cost thereof (regardless of any subsequent
appreciation or depreciation therein), loans and advances shall be taken at the
principal amount thereof then remaining unpaid, and guarantees shall be taken at
the amount of obligations guaranteed thereby.
Section 9.13. Unrealized Losses. The Borrowers shall not at any time
permit unrealized losses on the investments permitted by Section 9.12 to be in
excess of $100,000,000 in the aggregate for the Borrowers and their
Subsidiaries.
Section 9.14. Mergers and Consolidations. Neither Borrower shall be a
party to any merger or consolidation unless such Borrower is the surviving
entity and no Default or Event of Default exists or would exist after giving
effect to such merger or consolidation.
Section 9.15. Capital Expenditures. The Borrowers shall not, nor shall
they permit any Subsidiaries to, expend or become obligated for Capital
Expenditures in an aggregate amount in excess of $25,000,000 during any fiscal
year of Gallagher.
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Section 9.16. ERISA. The Borrowers shall, and shall cause each Subsidiary
to, promptly pay and discharge all obligations and liabilities arising under
ERISA of a character which if unpaid or unperformed might result in the
imposition of a Lien against any of its Properties. The Borrowers shall, and
shall cause each Subsidiary to, promptly notify the Agent and each Bank of (i)
the occurrence of any reportable event (as defined in ERISA) with respect to a
Plan, (ii) receipt of any notice from the PBGC of its intention to seek
termination of any Plan or appointment of a trustee therefor, (iii) its
intention to terminate or withdraw from any Plan, and (iv) the occurrence of any
event with respect to any Plan which would result in the incurrence by either
Borrower or any Subsidiary of any material liability, fine or penalty, or any
material increase in the contingent liability of either Borrower or any
Subsidiary with respect to any post-retirement Welfare Plan benefit.
Section 9.17. Compliance with Laws. The Borrowers shall, and shall cause
each Subsidiary to, comply in all respects with the requirements of all federal,
state and local laws, rules, regulations, ordinances and orders applicable to or
pertaining to their Properties or business operations, non-compliance with which
could have a material adverse effect on the financial condition, Properties,
business or operations of Gallagher and its Subsidiaries taken as a whole or
could result in a Lien (other than Liens permitted under Section 9.13 hereof)
upon any of their Property.
Section 9.18. Burdensome Contracts with Affiliates. Except to the extent
permitted by Section 9.12(j) hereof, the Borrowers shall not, nor shall they
permit any Subsidiary to, enter into any contract, agreement or business
arrangement with any of its Affiliates (other than with Wholly-Owned
Subsidiaries) on terms and conditions which are less favorable to such Borrower
or such Subsidiary than would be usual and customary in similar contracts,
agreements or business arrangements between Persons not affiliated with each
other.
Section 9.19. No Changes in Fiscal Year. Neither Borrower nor any
Subsidiary shall change its fiscal year from its present basis without the prior
written consent of the Required Banks.
Section 9.20. Change in the Nature of Business. The Borrowers shall not,
and shall not permit any Subsidiary to, engage in any business or activity if as
a result the general nature of the business of either Borrower or any Subsidiary
would be changed in any material respect from the general nature of the business
engaged in by such Borrower or such Subsidiary on the date of this Agreement.
Section 10. Events of Default and Remedies.
Section 10.1. Events of Default. Any one or more of the following shall
constitute an Event of Default:
(a) default in the payment when due of all or any part of any
Obligation payable by the Borrowers, or either of them, hereunder or under
any other Loan Document (whether at the stated maturity thereof or at any
other time provided for in this Agreement or such other Loan Document); or
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(b) default in the observance or performance of any covenant set
forth in Sections 9.5, 9.7, 9.8, 9.9, 9.10, 9.12, 9.13, 9.14, 9.15, 9.16 or
9.20 hereof; or
(c) default in the observance or performance of any other
provision hereof or of any other Loan Document which is not remedied within
30 days after the earlier of (i) the date on which such failure shall first
become known to any officer of either Borrower or (ii) written notice
thereof is given to the Borrowers by the Agent or any Bank; or
(d) any representation or warranty made by the Borrowers, or
either of them, herein or in any other Loan Document, or in any statement
or certificate furnished by it pursuant hereto or thereto, or in connection
with any Loan or other extension of credit made hereunder, proves untrue in
any material respect as of the date of the issuance or making thereof; or
(e) default shall occur under any evidence of Indebtedness for
Borrowed Money issued, assumed or guaranteed by either Borrower or any
Subsidiary aggregating in excess of $5,000,000, or under any indenture,
agreement or other instrument under which the same may be issued, and such
default shall continue for a period of time sufficient to permit the
acceleration of the maturity of any such Indebtedness for Borrowed Money
(whether or not such maturity is in fact accelerated), or any such
Indebtedness for Borrowed Money shall not be paid when due (whether by
lapse of time, acceleration or otherwise); or
(f) any judgment or judgments, writ or writs, or warrant or
warrants of attachment, or any similar process or processes in an aggregate
amount in excess of $10,000,000 shall be entered or filed against either
Borrower or any Subsidiary or against any of their Property and which
remains unvacated, unbonded, unstayed or unsatisfied for a period of 30
days; or
(g) either Borrower or any member of its Controlled Group shall
fail to pay when due an amount or amounts aggregating in excess of
$2,000,000 which it shall have become liable to pay to the PBGC or to a
Plan under Title IV of ERISA; or notice of intent to terminate a Plan or
Plans having aggregate Unfunded Vested Liabilities in excess of $10,000,000
(collectively, a "Material Plan") shall be filed under Title IV of ERISA by
either Borrower or any other member of its Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate or to cause a
trustee to be appointed to administer any Material Plan or a proceeding
shall be instituted by a fiduciary of any Material Plan against either
Borrower or any member of its Controlled Group to enforce Section 515 or
4219(c)(5) of ERISA and such proceeding shall not have been dismissed
within 30 days thereafter; or a condition shall exist by reason of which
the PBGC would be entitled to obtain a decree adjudicating that any
Material Plan must be terminated; or
(h) the occurrence of a Change of Control; or
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(i) either Borrower or any Subsidiary shall (i) have entered
involuntarily against it an order for relief under the United States
Bankruptcy Code, as amended, (ii) not pay, or admit in writing its
inability to pay, its debts generally as they become due, (iii) make an
assignment for the benefit of creditors, (iv) apply for, seek, consent to,
or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial part of
its Property, (v) institute any proceeding seeking to have entered against
it an order for relief under the United States Bankruptcy Code, as amended,
to adjudicate it insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it
or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed
against it, (vi) take any corporate action in furtherance of any matter
described in parts (i) through (v) above, or (vii) fail to contest in good
faith any appointment or proceeding described in Section 10.1(j) hereof; or
(j) a custodian, receiver, trustee, examiner, liquidator or
similar official shall be appointed for either Borrower or any Subsidiary
or any substantial part of any of their Property, or a proceeding described
in Section 10.1(i)(v) shall be instituted against either Borrower or any
Subsidiary, and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of 60 days.
Section 10.2. Non-Bankruptcy Defaults. When any Event of Default other
than those described in subsections (i) or (j) of Section 10.1 hereof has
occurred and is continuing, the Agent shall, if so directed by the Required
Banks, by written notice to the Borrowers: (a) terminate the remaining
Commitments and all other obligations of the Banks hereunder on the date stated
in such notice (which may be the date thereof); (b) declare the principal of and
the accrued interest on all outstanding Notes to be forthwith due and payable
and thereupon all outstanding Notes, including both principal and interest
thereon, shall be and become immediately due and payable together with all other
amounts payable under the Loan Documents without further demand, presentment,
protest or notice of any kind; and (c) demand that the Borrowers immediately pay
to the Agent, subject to Section 10.4, the full amount then available for
drawing under each or any Letter of Credit, and the Borrowers agree to
immediately make such payment and acknowledge and agree that the Banks would not
have an adequate remedy at law for failure by the Borrowers to honor any such
demand and that the Agent, for the benefit of the Banks, shall have the right to
require the Borrowers to specifically perform such undertaking whether or not
any drawings or other demands for payment have been made under any Letter of
Credit.
Section 10.3. Bankruptcy Defaults. When any Event of Default described in
subsections (i) or (j) of Section 10.1 hereof has occurred and is continuing,
then all outstanding Notes shall immediately become due and payable together
with all other amounts payable under the Loan Documents without presentment,
demand, protest or notice of any kind, the obligation of the Banks to extend
further credit pursuant to any of the terms hereof shall immediately terminate
and the Borrowers shall immediately pay to the Agent, subject to Section 10.4,
the full amount then available for drawing under all outstanding Letters of
Credit, the Borrowers acknowledging that the Banks would not have an adequate
remedy at law for failure by the
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Borrowers to honor any such demand and that the Banks, and the Agent on their
behalf, shall have the right to require the Borrowers to specifically perform
such undertaking whether or not any draws or other demands for payment have been
made under any of the Letters of Credit.
Section 10.4. Collateral for Undrawn Letters of Credit. (a) If the payment
or prepayment of the amount available for drawing under any or all outstanding
Letters of Credit is required under Section 1.3(b) or Section 4.5(b) or under
Section 10.2 or Section 10.3 above, the Borrowers shall forthwith pay the amount
required to be so prepaid, to be held by the Agent as provided in subsection (b)
below.
(b) All amounts prepaid pursuant to subsection (a) above shall be held by
the Agent in a separate collateral account (such account, and the credit
balances, properties and any investments from time to time held therein, and any
substitutions for such account, any certificate of deposit or other instrument
evidencing any of the foregoing and all proceeds of and earnings on any of the
foregoing being collectively called the "Account") as security for, and for
application by the Agent (to the extent available) to, the reimbursement of any
payment under any Letter of Credit then or thereafter made by the Agent, and to
the payment of the unpaid balance of any Loans and all other Obligations. The
Account shall be held in the name of and subject to the exclusive dominion and
control of the Agent for the benefit of the Agent and the Banks. If and when
requested by the Borrowers, the Agent shall invest funds held in the Account
from time to time in direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America with a remaining maturity of one year or less, provided that the Agent
is irrevocably authorized to sell investments held in the Account when and as
required to make payments out of the Account for application to amounts due and
owing from the Borrowers to the Agent or Banks; provided, however, that if (i)
the Borrowers shall have made payment of all such obligations referred to in
subsection (a) above and (ii) no Letters of Credit, Commitments, Loans or other
Obligations remain outstanding hereunder, then the Agent shall repay to the
Borrowers any remaining amounts held in the Account.
Section 10.5. Notice of Default. The Agent shall give notice to the
Borrowers under Section 10.1(c) hereof promptly upon being requested to do so by
any Bank and shall thereupon notify all the Banks thereof.
Section 10.6. Expenses. The Borrowers jointly and severally agree to pay to
the Agent, for the account of the Agent and each Bank, and any other holder of
any Note outstanding hereunder, all out-of-pocket expenses incurred or paid by
the Agent and such Bank or any such holder, including attorneys' fees and court
costs, in connection with any Default or Event of Default by the Borrowers, or
either of them, hereunder or in connection with the enforcement of any of the
Loan Documents.
Section 11. Change in Circumstances.
Section 11.1. Change of Law. Notwithstanding any other provisions of this
Agreement or any Note, if at any time after the date hereof any Bank shall
determine in good faith that any change in applicable laws, treaties or
regulations or in the interpretation thereof makes it unlawful for such Bank to
make or continue to maintain Eurocurrency Loans or to perform its
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obligations as contemplated hereby, such Bank shall promptly give notice thereof
to the Agent (which shall in turn promptly notify the Borrowers and the other
Banks) and such Bank's obligations to make or maintain Eurocurrency Loans under
this Agreement shall terminate until it is no longer unlawful for such Bank to
make or maintain Eurocurrency Loans. The Borrowers shall prepay on demand the
outstanding principal amount of any such affected Eurocurrency Loans, together
with all interest accrued thereon and all other amounts payable to the affected
Bank with respect thereto; provided, however, subject to all of the terms and
conditions of this Agreement, the Borrowers may then elect to borrow the
principal amount of the affected Eurocurrency Loans from such Bank by means of
Domestic Rate Loans from such Bank, which Domestic Rate Loans shall not be made
ratably by the Banks but only from such affected Bank.
Section 11.2. Unavailability of Deposits or Inability to Ascertain, or
Inadequacy of, Adjusted LIBOR. If on or prior to the first day of any Interest
Period for any Borrowing of Eurocurrency Loans:
(a) the Agent determines that deposits in U.S. Dollars or the
applicable Alternative Currency (in the applicable amounts) are not being
offered to it in the eurocurrency interbank market for such Interest
Period, or that by reason of circumstances affecting the interbank
eurocurrency market adequate and reasonable means do not exist for
ascertaining the applicable Adjusted LIBOR, or
(b) the Required Banks determine and so advise the Agent that
Adjusted LIBOR as determined by the Agent will not adequately and fairly
reflect the cost to such Banks of funding their Eurocurrency Loans or Loan
for such Interest Period,
then the Agent shall forthwith give notice thereof to the Borrowers and the
Banks, whereupon until the Agent notifies the Borrowers that the circumstances
giving rise to such suspension no longer exist, the obligations of the Banks to
make Eurocurrency Loans in the currency so affected shall be suspended.
Section 11.3. Increased Cost and Reduced Return. (a) If, on or after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Lending Office) with any request or directive (whether or not having the force
of law but, if not having the force of law, compliance with which is customary
in the relevant jurisdiction) of any such authority, central bank or comparable
agency:
(i) shall subject any Bank (or its Lending Office) to any tax,
duty or other charge with respect to its Eurocurrency Loans, its Notes, its
Letters of Credit, or its participation in any thereof, any Reimbursement
Obligations owed to it or its obligation to make Eurocurrency Loans, issue
Letters of Credit, or to participate therein, or shall change the basis of
taxation of payments to any Bank (or its Lending Office) of the principal
of or interest on its Eurocurrency Loans, Letters of Credit, or
participations therein or any other amounts due under this Agreement in
respect of its Eurocurrency Loans, Letters of Credit, or participations
therein, any Reimbursement Obligations owed
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to it, or its obligation to make Eurocurrency Loans, issue a Letter of
Credit, or acquire participations therein (except for changes in the rate
of tax on the overall net income or profits of such Bank or its Lending
Office imposed by the jurisdiction in which such Bank or its lending office
is incorporated, or in which such Bank's principal executive office or
Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding with respect to any Eurocurrency Loans any such
requirement included in an applicable Eurocurrency Reserve Percentage)
against assets of, deposits with or for the account of, or credit extended
by, any Bank (or its Lending Office) or shall impose on any Bank (or its
Lending Office) or on the interbank market any other condition affecting
its Eurocurrency Loans, its Notes, its Letters of Credit, or its
participation in any thereof, any Reimbursement Obligation owed to it, or
its obligation to make Eurocurrency Loans, to issue a Letter of Credit, or
to participate therein;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Eurocurrency Loan, issuing or
maintaining a Letter of Credit, or participating therein, or to reduce the
amount of any sum received or receivable by such Bank (or its Lending Office)
under this Agreement or under its Notes with respect thereto, by an amount
deemed by such Bank to be material, then, within 15 days after demand by such
Bank (with a copy to the Agent), the Borrowers shall be obligated to pay to such
Bank such additional amount or amounts as will compensate such Bank for such
increased cost or reduction. In the event any law, rule, regulation or
interpretation described above is revoked, declared invalid or inapplicable or
is otherwise rescinded, and as a result thereof a Bank is determined to be
entitled to a refund from the applicable authority for any amount or amounts
which were paid or reimbursed by the Borrowers to such Bank hereunder, such Bank
shall refund such amount or amounts to the Borrowers without interest.
(b) If any Bank or the Agent shall have determined that the adoption,
after the date hereof, of any applicable law, rule or regulation regarding
capital adequacy, or any change therein (including, without limitation, any
revision in the Final Risk-Based Capital Guidelines of the Board of Governors of
the Federal Reserve System (12 CFR Part 208, Appendix A; 12 CFR Part 225,
Appendix A) or of the Office of the Comptroller of the Currency (12 CFR Part 3,
Appendix A), or in any other applicable capital rules heretofore adopted and
issued by any governmental authority), or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Lending Office) with any request or directive regarding
capital adequacy (whether or not having the force of law but, if not having the
force of law, compliance with which is customary in the applicable jurisdiction)
of any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Bank's capital, or on the capital
of any corporation controlling such Bank, as a consequence of its obligations
hereunder to a level below that which such Bank could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's policies
with respect to capital adequacy) by an amount deemed by such Bank to be
material,
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then from time to time, within 15 days after demand by such Bank (with a copy to
the Agent), the Borrowers shall pay to such Bank such additional amount or
amounts as will compensate such Bank for such reduction.
(c) Each Bank that determines to seek compensation under this Section
11.3 shall notify the Borrowers and the Agent of the circumstances that entitle
the Bank to such compensation pursuant to this Section 11.3 and will designate a
different 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. A certificate of any Bank claiming
compensation under this Section 11.3 and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive if reasonably determined.
Section 11.4. Lending Offices. Each Bank may, at its option, elect to
make its Loans hereunder at the branch, office or affiliate specified on the
appropriate signature page hereof (each a "Lending Office") for each type of
Loan available hereunder or at such other of its branches, offices or affiliates
as it may from time to time elect and designate in a written notice to the
Borrowers and the Agent.
Section 11.5. Discretion of Bank as to Manner of Funding.
Notwithstanding any other provision of this Agreement, each Bank shall be
entitled to fund and maintain its funding of all or any part of its Loans in any
manner it sees fit, it being understood, however, that for the purposes of this
Agreement all determinations hereunder shall be made as if each Bank had
actually funded and maintained each Eurocurrency Loan through the purchase of
deposits of U.S. Dollars or the relevant Alternative Currency in the
eurocurrency interbank market having a maturity corresponding to such Loan's
Interest Period and bearing an interest rate equal to Adjusted LIBOR for such
Interest Period.
Section 12. THE AGENT.
Section 12.1. Appointment and Authorization of Agent. Each Bank hereby
appoints Harris Trust and Savings Bank as the Agent under the Loan Documents and
hereby authorizes the Agent to take such action as the Agent on its behalf and
to exercise such powers under the Loan Documents as are delegated to the Agent
by the terms thereof, together with such powers as are reasonably incidental
thereto.
Section 12.2. Agent and its Affiliates. The Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any other
Bank and may exercise or refrain from exercising the same as though it were not
the Agent, and the Agent and its affiliates may accept deposits from, lend money
to, and generally engage in any kind of business with either Borrower or any
Affiliate of either Borrower as if it were not the Agent under the Loan
Documents. The term "Bank" as used herein and in all other Loan Documents,
unless the context otherwise clearly requires, includes the Agent in its
individual capacity as a Bank. References in Section 1 hereof to the Agent's
Loans, or to the amount owing to the Agent for which an interest rate is being
determined, refer to the Agent in its individual capacity as a Bank.
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Section 12.3. Action by Agent. If the Agent receives from the Borrowers
a written notice of an Event of Default pursuant to Section 9.6(c)(i) hereof,
the Agent shall promptly give each of the Banks written notice thereof. The
Banks expressly agree that the Agent is not acting as a fiduciary of the Banks
in respect of the Loan Documents, the Borrowers or otherwise, and nothing herein
or in any of the other Loan Documents shall result in any duties or obligations
on the Agent or any of the Banks except as expressly set forth herein. The
obligations of the Agent under the Loan Documents are only those expressly set
forth therein. Without limiting the generality of the foregoing, the Agent shall
not be required to take any action hereunder with respect to any Default or
Event of Default, except as expressly provided in Sections 10.2 and 10.5 hereof.
In no event, however, shall the Agent be required to take any action in
violation of applicable law or of any provision of any Loan Document, and the
Agent shall in all cases be fully justified in failing or refusing to act
hereunder or under any other Loan Document unless it shall be first indemnified
to its reasonable satisfaction by the Banks against any and all costs, expense,
and liability which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall be entitled to assume that no Default or
Event of Default exists unless notified to the contrary by a Bank or the
Borrowers. In all cases in which this Agreement and the other Loan Documents do
not require the Agent to take certain actions, the Agent shall be fully
justified in using its discretion in failing to take or in taking any action
hereunder and thereunder.
Section 12.4. Consultation with Experts. The Agent may consult with
legal counsel, 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 12.5. Liability of Agent; Credit Decision. 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 with the Loan Documents (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, any other Loan Document
or any Credit Event; (ii) the performance or observance of any of the covenants
or agreements of the Borrowers contained herein or in any other Loan Document;
(iii) the satisfaction of any condition specified in Section 8 hereof, except
receipt of items required to be delivered to the Agent; or (iv) the validity,
effectiveness, genuineness, enforceability, perfection, value, worth or
collectibility hereof or of any other Loan Document or of any other documents or
writing furnished in connection with any Loan Document; and the Agent makes no
representation of any kind or character with respect to any such matter
mentioned in this sentence. The Agent may execute any of its duties under any of
the Loan Documents by or through employees, agents, and attorneys-in-fact and
shall not be answerable to the Banks, the Borrowers, or any other Person for the
default or misconduct of any such agents or attorneys-in-fact selected with
reasonable care. The Agent shall not incur any liability by acting in reliance
upon any notice, consent, certificate, other document or statement (whether
written or oral) believed by it to be genuine or to be sent by the proper party
or parties. In particular and without limiting any of the foregoing, the Agent
shall have no responsibility for confirming the accuracy of any Compliance
Certificate or other document or instrument received
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by it under the Loan Documents. The Agent may treat the payee of any Note as the
holder thereof until written notice of transfer shall have been filed with the
Agent signed by such payee in form satisfactory to the Agent. Each Bank
acknowledges that it has independently and without reliance on the Agent or any
other Bank, and based upon such information, investigations and inquiries as it
deems appropriate, made its own credit analysis and decision to extend credit to
the Borrowers in the manner set forth in the Loan Documents. It shall be the
responsibility of each Bank to keep itself informed as to the creditworthiness
of the Borrowers and the Agent shall have no liability to any Bank with respect
thereto.
Section 12.6. Indemnity. The Banks shall ratably, in accordance with
their respective Percentages, indemnify and hold the Agent, and its directors,
officers, employees, agents and representatives harmless from and against any
liabilities, losses, costs or expenses suffered or incurred by it under any Loan
Document or in connection with the transactions contemplated thereby, regardless
of when asserted or arising, except to the extent they are promptly reimbursed
for the same by the Borrowers and except to the extent that any event giving
rise to a claim was caused by the gross negligence or willful misconduct of the
party seeking to be indemnified. The obligations of the Banks under this Section
12.6 shall survive termination of this Agreement.
Section 12.7. Resignation of Agent and Successor Agent. The Agent may
resign at any time by giving written notice thereof to the Banks and the
Borrowers. Upon any such resignation of the Agent, the Required Banks shall have
the right to appoint a successor Agent with the consent of the Borrowers. If no
successor Agent shall have been so appointed by the Required Banks, and shall
have accepted such appointment, within 30 days after the retiring Agent's giving
of notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be any Bank hereunder or any commercial
bank organized under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least $200,000,000. Upon
the acceptance of its appointment as the Agent hereunder, such successor Agent
shall thereupon succeed to and become vested with all the rights and duties of
the retiring or removed Agent under the Loan Documents, and the retiring Agent
shall be discharged from its duties and obligations thereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Section
12 and all protective provisions of the other Loan Documents shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent.
Section 12.8. Syndication Agent and Documentation Agent. The financial
institutions named in the first paragraph of this Agreement as Syndication Agent
and Documentation Agent shall have no duties or responsibilities for the
administration of this Agreement or the other Loan Documents.
Section 13. Miscellaneous.
Section 13.1. Withholding Taxes. (a) Payments Free of Withholding.
Except as otherwise required by law and subject to Section 13.1(b) hereof, each
payment by the Borrowers under this Agreement or the other Loan Documents shall
be made without withholding for or on account of any present or future taxes
(other than overall net income taxes on the recipient) imposed by or within the
jurisdiction in which either Borrower is domiciled, any jurisdiction from which
the
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Borrowers make any payment, or (in each case) any political subdivision or
taxing authority thereof or therein. If any such withholding is so required, the
Borrowers shall make the withholding, pay the amount withheld to the appropriate
governmental authority before penalties attach thereto or interest accrues
thereon and forthwith pay such additional amount as may be necessary to ensure
that the net amount actually received by each Bank and the Agent free and clear
of such taxes (including such taxes on such additional amount) is equal to the
amount which that Bank or the Agent (as the case may be) would have received had
such withholding not been made. If the Agent or any Bank pays any amount in
respect of any such taxes, penalties or interest, the Borrowers shall reimburse
the Agent or that Bank for that payment on demand in the currency in which such
payment was made. If the Borrowers pay any such taxes, penalties or interest,
they shall deliver official tax receipts evidencing that payment or certified
copies thereof to the Bank or Agent on whose account such withholding was made
(with a copy to the Agent if not the recipient of the original) on or before the
thirtieth day after payment.
(b) U.S. Withholding Tax Exemptions. Each Bank that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) shall
submit to the Borrowers and the Agent on or before the earlier of the initial
Credit Event and 30 days after the date hereof, two duly completed and signed
copies of either Form 1001 (or substantially similar substitute forms) (relating
to such Bank and entitling it to a complete exemption from withholding under the
Code on all amounts to be received by such Bank, including fees, pursuant to the
Loan Documents and the Loans) or Form 4224 (or substantially similar substitute
forms) (relating to all amounts to be received by such Bank, including fees,
pursuant to the Loan Documents and the Loans) of the United States Internal
Revenue Service. Thereafter and from time to time, each Bank shall submit to the
Borrowers and the Agent such additional duly completed and signed copies of one
or the other of such Forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may be (i)
requested by the Borrowers in a written notice, directly or through the Agent,
to such Bank and (ii) required under then-current United States law or
regulations to avoid or reduce United States withholding taxes on payments in
respect of all amounts to be received by such Bank, including fees, pursuant to
the Loan Documents or the Loans.
(c) Inability of Bank to Submit Forms. If any Bank determines, as a
result of any change in applicable law, regulation or treaty, or in any official
application or interpretation thereof, that it is unable to submit to the
Borrowers or Agent any form or certificate that such Bank is obligated to submit
pursuant to subsection (b) of this Section 13.1 or that such Bank is required to
withdraw or cancel any such form or certificate previously submitted or any such
form or certificate otherwise becomes ineffective or inaccurate, such Bank shall
promptly notify the Borrowers and Agent of such fact and the Bank shall to that
extent not be obligated to provide any such form or certificate and will be
entitled to withdraw or cancel any affected form or certificate, as applicable.
Section 13.2. No Waiver of Rights. No delay or failure on the part of
the Agent or any Bank or on the part of any holder or holders of any of the
Obligations in the exercise of any power or right under any Loan Document shall
operate as a waiver thereof, nor as an acquiescence in any default, nor shall
any single or partial exercise thereof preclude any other or further exercise of
any other power or right. The rights and remedies hereunder of the Agent, the
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Banks and any holder or holders of any of the Obligations are cumulative to, and
not exclusive of, any rights or remedies which any of them would otherwise have.
Section 13.3. Non-Business Day. If any payment hereunder becomes due and
payable on a day which is not a Business Day, the due date of such payment shall
be extended to the next succeeding Business Day on which date such payment shall
be due and payable. In the case of any payment of principal falling due on a day
which is not a Business Day, interest on such principal amount shall continue to
accrue during such extension at the rate per annum then in effect, which accrued
amount shall be due and payable on the next scheduled date for the payment of
interest.
Section 13.4. Documentary Taxes. The Borrowers agree that they will pay
any documentary, stamp or similar taxes payable in respect of any Loan Document,
including interest and penalties, in the event any such taxes are assessed,
irrespective of when such assessment is made and whether or not any credit is
then in use or available hereunder.
Section 13.5. Survival of Representations. All representations and
warranties made herein or in certificates given pursuant hereto shall survive
the execution and delivery of this Agreement and the other Loan Documents, and
shall continue in full force and effect with respect to the date as of which
they were made as long as any credit is in use or available hereunder.
Section 13.6. Survival of Indemnities. All indemnities and all other
provisions relative to reimbursement to the Banks of amounts sufficient to
protect the yield of the Banks with respect to the Loans, including, but not
limited to, Section 4.6, Section 11.3 and Section 13.15 hereof, shall survive
the termination of this Agreement and the other Loan Documents and the payment
of the Loans and all other Obligations.
Section 13.7. Sharing of Set-Off. Each Bank agrees with each other Bank
which is a party hereto that if such Bank shall receive and retain any payment,
whether by set-off or application of deposit balances or otherwise ("Set-off"),
on any of the Loans or Reimbursement Obligations in excess of its ratable share
of payments on all such obligations then outstanding to the Banks, then such
Bank shall purchase for cash at face value, but without recourse, ratably from
each of the other Banks such amount of the Loans or Reimbursement Obligations,
or participations therein, held by each such other Banks (or interest therein)
as shall be necessary to cause such Bank to share such excess payment ratably
with all the other Banks; provided, however, that if any such purchase is made
by any Bank, and if such excess payment or part thereof is thereafter recovered
from such purchasing Bank, the related purchases from the other Banks shall be
rescinded ratably and the purchase price restored as to the portion of such
excess payment so recovered, but without interest. For purposes of this Section
13.7, amounts owed to or recovered by, the Agent in connection with
Reimbursement Obligations in which Banks have been required to fund their
participation shall be treated as amounts owed to or recovered by the Agent as a
Bank hereunder.
Section 13.8. Notices. Except as otherwise specified herein, all notices
under the Loan Documents shall be in writing (including telecopy or other
electronic communication) and shall be given to a party hereunder at its address
or telecopier number set forth below or such other address or telecopier number
as such party may hereafter specify by notice to the Agent and the
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Borrowers, given by courier, by United States certified or registered mail, or
by other telecommunication device capable of creating a written record of such
notice and its receipt. Notices under the Loan Documents to the Banks and the
Agent shall be addressed to their respective addresses, telecopier or telephone
numbers set forth on the signature pages hereof, and to the Borrowers shall be
addressed in care of Gallagher as follows:
Arthur J. Gallagher & Co.
The Gallagher Centre
Two Pierce Place
Itasca, Illinois 60143-3141
Attention: General Counsel
Telephone: (630) 285-3457
Telecopy: (630) 285-3483
Each such notice, request or other communication shall be effective
(i) if given by telecopier, when such telecopy is transmitted to the telecopier
number specified in this Section 13.8 or on the signature pages hereof and a
confirmation of receipt of such telecopy has been received by the sender, (ii)
if given by courier, when delivered, (iii) if given by mail, three business days
after such communication is deposited in the mail, registered with return
receipt requested, addressed as aforesaid or (iv) if given by any other means,
when delivered at the addresses specified in this Section 13.8 or on the
signature pages hereof; provided that any notice given pursuant to Section 1
hereof shall be effective only upon receipt.
Section 13.9. Counterparts. This Agreement may be executed in any
number of counterpart signature pages, and by the different parties on different
counterparts, each of which when executed shall be deemed an original but all
such counterparts taken together shall constitute one and the same instrument.
Section 13.10. Successors and Assigns. This Agreement shall be binding
upon the Borrowers and their successors and assigns, and shall inure to the
benefit of each of the Banks and the benefit of their respective successors and
assigns, including any subsequent holder of any Note. The Borrowers may not
assign any of their rights or obligations under any Loan Document without the
written consent of all of the Banks.
Section 13.11. Participants and Note Assignees. Each Bank shall have
the right at its own cost to grant participations (to be evidenced by one or
more agreements or certificates of participation) in the Loans made and
Reimbursement Obligations and/or Commitments and/or participations in Swing
Loans held by such Bank at any time and from time to time, and to assign its
rights under such Loans or the Notes evidencing such Loans or Reimbursement
Obligations, to one or more other banks, insurance companies, commercial lenders
and other financial institutions; provided that no such participation or
assignment shall relieve any Bank of any of its obligations under this
Agreement, and provided further that no such assignee or participant shall have
any rights under this Agreement except as provided in this Section 13.11, and
the Agent shall have no obligation or responsibility to such participant or
assignee, except that nothing herein provided is intended to affect the rights
of an assignee of a Note to enforce the Note assigned. Any party to which such a
participation or assignment has been granted shall have the
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benefits of Section 4.6 and Section 11.3 hereof but shall not be entitled to
receive any greater payment under either such Section than the Bank granting
such participation or assignment would have been entitled to receive with
respect to the rights transferred. 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 Borrowers
hereunder including, without limitation, the right to approve any amendment or
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 that would (A) increase any
Commitment of such Bank if such increase would also increase the participant's
obligations, (B) forgive any amount of or postpone the date for payment of any
principal of or interest on any Loan or Reimbursement Obligation or of any fee
payable hereunder in which such participant has an interest or (C) reduce the
stated rate at which interest or fees accrue or other amounts payable hereunder
in which such participant has an interest. Each Borrower authorizes each Bank to
disclose to any participant or prospective participant under this Section 13.11
any financial or other information pertaining to the Borrowers, subject to
Section 13.21 hereof.
Section 13.12. Assignment Agreements. Each Bank may, from time to time
upon at least five Business Days' notice to the Agent and the Borrowers, assign
to other Persons all or any part of its rights and obligations under this
Agreement (including without limitation the indebtedness evidenced by each Note
then owned by such assigning Bank, together with an equivalent proportion of its
obligation to make Loans and advances and participate in Letters of Credit and
Swing Loans hereunder) pursuant to written agreements in the form attached
hereto as Exhibit K executed by such assigning Bank, such assignee Bank or
Banks, the Borrowers and the Agent, which agreements shall specify in each
instance the portion of the indebtedness evidenced by each Note which is to be
assigned to each such assignee lender and the portion of the Commitments, and
obligations to participate in Letters of Credit and Swing Loans, in each case of
the assigning Bank to be assumed by such assignee lender (the "Assignment
Agreements"); provided, however, that (i) each such assignment shall be of a
constant, and not a varying, percentage of the assigning Bank's rights and
obligations under this Agreement and the assignment shall cover the same
percentage of such Bank's Commitments, Loans, Notes and interests in Letters of
Credit and Swing Loans; (ii) the aggregate amount of the Revolving Credit
Commitment and Short-Term Revolving Credit Commitment of the assigning Bank
being assigned pursuant to each such assignment (determined as of the effective
date of the relevant Assignment Agreement) shall in no event be less than
$5,000,000; (iii) the assigning Bank shall assign an identical percentage of its
Revolving Credit Commitment and its Short-Term Credit Commitment, (iv) each Bank
shall maintain for its own account at least $5,000,000 of its Revolving Credit
Commitment and Short-Term Revolving Credit Commitment and the Agent must retain
all of the Swing Line Commitment; (v) the Agent and the Borrowers must each
consent (which consents shall not be unreasonably withheld) to each such
assignment (except that the Borrowers' consent shall not be required if such
assignment is made after an Event of Default has occurred and is continuing) to
a party which is not a Bank at such time except that such consents shall not be
required in connection with an assignment by a Bank to a wholly-owned subsidiary
of such Bank; and (vi) the assigning Bank must pay to the Agent a processing and
recordation fee of $3,500 and any out-of-pocket attorney's fees incurred by the
Agent in connection with such Assignment Agreement. Upon the execution of each
Assignment
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<PAGE>
Agreement by the assigning Bank thereunder, the assignee lender thereunder, the
Borrowers (if applicable) and the Agent and payment to such assigning Bank by
such assignee lender of the purchase price for the portion of the indebtedness
of the Borrowers being acquired by it, (i) such assignee lender shall thereupon
become a "Bank" for all purposes of this Agreement with Commitments (including
the related obligations to participate in Letters of Credit and Swing Loans) in
the amounts set forth in such Assignment Agreement and with all the rights,
powers and obligations afforded a Bank hereunder, (ii) such assigning Bank shall
have no further liability for funding the portion of its Commitments (including
the related obligations to participate in Letters of Credit and Swing Loans)
assumed by such new assignee Bank and (iii) the address for notices to such
assignee Bank shall be as specified in the Assignment Agreement executed by it.
Concurrently with the execution and delivery of such Assignment Agreement, the
Borrowers shall upon request execute and deliver new Notes to the assignee Bank
in the amount of its Revolving Credit Commitment, Short-Term Revolving Credit
Commitment and Bid Loans (and a Swing Line Note if such assignee Bank is
concurrently with such assignment becoming a new Agent), and new Bid Notes to
the assigning Bank in the amount of its Bid Loans after giving effect to the
reduction occasioned by such assignment, all such Notes to constitute "Notes"
for all purposes of this Agreement. Nothing in this Section 13.12 shall prevent
or prohibit any Bank which is a bank, trust company or other financial
institution from pledging its Notes or Loans to a Federal Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank; no such
pledge, or any assignment pursuant to or in lieu of an enforcement of such a
pledge, shall relieve the transferor Bank from its obligations hereunder.
Section 13.13. Amendments. Any provision of the Loan Documents may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by (a) the Borrowers, (b) the Required Banks, and (c) if the rights or
duties of the Agent are affected thereby, the Agent; provided that:
(i) no amendment or waiver pursuant to this Section 13.13
shall (A) increase any Commitment of any Bank without the consent of
such Bank or (B) forgive, or reduce the amount of, or postpone any
fixed date for payment of, any principal of or interest on any Loan or
Reimbursement Obligation or any fee payable hereunder without the
consent of each Bank or (C) reduce the stated rate at which interest or
any fee hereunder is calculated; and
(ii) no amendment or waiver pursuant to this Section 13.13
shall, unless signed by each Bank, change any provision of Section 8,
Section 10.1(a), Section 11, this Section 13.13, or the definition of
Required Banks, or affect the number of Banks required to take any
action under the Loan Documents.
Section 13.14. Headings. Section headings used in this Agreement are
for reference only and shall not affect the construction of this Agreement.
Section 13.15. Legal Fees, Other Costs and Indemnification. The
Borrowers jointly and severally agree to pay all costs and expenses of the Agent
in connection with the preparation and negotiation of the Loan Documents,
including without limitation, the fees and disbursements of Chapman and Cutler,
counsel to the Agent, in connection with the preparation and execution of
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<PAGE>
the Loan Documents, and any amendment, waiver or consent related hereto, whether
or not the transactions contemplated herein are consummated. The Borrowers
further agree to indemnify each Bank, the Agent, and their respective directors,
officers and employees against all losses, claims, damages, penalties,
judgments, liabilities and related expenses (including, without limitation, all
expenses of litigation or preparation therefor, whether or not the indemnified
Person is a party thereto) which any of them may incur or reasonably pay arising
out of or relating to any Loan Document or any of the transactions contemplated
thereby or the direct or indirect application or proposed application of the
proceeds of any Loan or Letter of Credit, other than those which arise from the
gross negligence or willful misconduct of the party claiming indemnification.
The Borrowers, upon demand by the Agent or a Bank at any time, shall reimburse
the Agent or Bank for any legal or other expenses incurred in connection with
investigating or defending against any of the foregoing except if the same is
directly due to the gross negligence or willful misconduct of the party to be
indemnified.
Section 13.16. Set Off. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence and during the continuance of any Event of Default, each
Bank and each subsequent holder of any Note is hereby authorized by the
Borrowers at any time or from time to time, without notice to the Borrowers or
to any other Person, any such notice being hereby expressly waived, to set off
and to appropriate and to apply any and all deposits (general or special,
including, but not limited to, indebtedness evidenced by certificates of
deposit, whether matured or unmatured, but not including trust accounts, and in
whatever currency denominated) and any other indebtedness at any time held or
owing by that Bank or that subsequent holder to or for the credit or the account
of either Borrower, whether or not matured, against and on account of the
obligations and liabilities of the Borrowers to that Bank or that subsequent
holder under the Loan Documents, including, but not limited to, all claims of
any nature or description arising out of or connected with the Loan Documents,
irrespective of whether or not (a) that Bank or that subsequent holder shall
have made any demand hereunder or (b) the principal of or the interest on the
Loans or Notes and other amounts due hereunder shall have become due and payable
pursuant to Section 8 and although said obligations and liabilities, or any of
them, may be contingent or unmatured.
Section 13.17. Currency. Each reference in this Agreement to U.S. Dollars
or to an Alternative Currency (the "relevant currency") is of the essence. To
the fullest extent permitted by law, the obligation of the Borrowers in respect
of any amount due in the relevant currency under this Agreement shall,
notwithstanding any payment in any other currency (whether pursuant to a
judgment or otherwise), be discharged only to the extent of the amount in the
relevant currency that the Person entitled to receive such payment may, in
accordance with normal banking procedures, purchase with the sum paid in such
other currency (after any premium and costs of exchange) on the Business Day
immediately following the day on which such Person receives such payment. If the
amount of the relevant currency so purchased is less than the sum originally due
to such Person in the relevant currency, the Borrowers agree, as a separate
obligation and notwithstanding any such judgment, to indemnify such Person
against such loss, and if the amount of the specified currency so purchased
exceeds the sum of (a) the amount originally due to the relevant Person in the
specified currency plus (b) any amounts shared with other Banks as a result of
allocations of such excess as a disproportionate payment to such Person under
Section 13.7 hereof, such Person agrees to remit such excess to the Borrowers.
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<PAGE>
Section 13.18. Entire Agreement. The Loan Documents constitute the
entire understanding of the parties thereto with respect to the subject matter
thereof and any prior or contemporaneous agreements, whether written or oral,
with respect thereto are superseded thereby.
Section 13.19. Governing Law. This Agreement and the other Loan
Documents, and the rights and duties of the parties hereto, shall be construed
and determined in accordance with the internal laws of the State of Illinois.
Section 13.20. Submission to Jurisdiction; Waiver of Jury Trial. Each
Borrower hereby submits to the nonexclusive jurisdiction of the United States
District Court for the Northern District of Illinois and of any Illinois State
court sitting in the City of Chicago for purposes of all legal proceedings
arising out of or relating to this Agreement, the other Loan Documents or the
transactions contemplated hereby or thereby. Each Borrower irrevocably waives,
to the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a court has been
brought in an inconvenient forum. EACH BORROWER, THE AGENT, AND EACH BANK HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY.
Section 13.21. Confidentiality. Each Bank agrees to maintain in
confidence and not to disclose without the Borrowers' consent (other than to its
employees, affiliates, auditors, counsel or other professional advisors, or to
another Bank, each of which shall also be bound by this Section 13.21) any
information concerning the Borrowers or any Subsidiaries furnished pursuant to
this Agreement and identified as confidential by the party so furnishing such
information; provided that any Bank may disclose any such information (a) that
has become generally available to the public, (b) if required or appropriate in
any report, statement or testimony submitted to any regulatory body having or
claiming to have jurisdiction over such Bank, (c) if required or appropriate in
response to any summons or subpoena or in connection with any litigation, (d) in
order to comply with any law, order, regulation or ruling applicable to such
Bank, or (e) to any prospective or actual participant under Section 13.11 or
13.12 hereof in connection with any contemplated or actual transfer of a
participating or other interest in such Bank's rights or obligations hereunder;
provided, that (i) such actual or prospective transferee executes an agreement
with such Bank containing provisions substantially identical to those contained
in this Section 13.21 and (ii) in the case of any disclosure under subsection
(c) above, such Bank shall (to the extent permitted by applicable law) notify
the Borrowers of such disclosure so that the Borrowers may seek an appropriate
protective order or waive such Bank's compliance with the provisions of this
Section, it being understood that if the Borrowers have no right to obtain such
a protective order or if the Borrowers do not commence procedures to obtain such
a protective order within ten business days of the receipt of such notice, such
Bank's compliance with this Section shall be deemed to have been waived with
respect to such disclosure.
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<PAGE>
Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall be a contract between us for the purposes hereinabove set forth.
Dated as of September 11, 2000.
ARTHUR J. GALLAGHER & CO.
By
Name: __________________________
Title: __________________________
AJG FINANCIAL SERVICES, INC.
By
Name: _________________________
Title: _________________________
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<PAGE>
Accepted and agreed to as of the day and year last above written.
Address and Amount of Commitments:
Address: Harris Trust and Savings Bank, in
its individual capacity as a Bank
and in its capacity as Agent
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60690
Attn.: Emerging Majors Illinois By__________________________________
Telecopy: (312) 293-4856 Name: ____________________________
Telephone: (312) 461-2781 Title: ___________________________
Revolving Credit Commitment: $15,000,000
Short-Term Revolving Credit Commitment: $30,000,000
Swing Line Commitment: $30,000,000
Lending Offices:
Domestic Rate Loans:
111 West Monroe Street
Chicago, Illinois 60690
Eurocurrency Loans:
Nassau Branch
c/o 111 West Monroe Street
Chicago, Illinois 60690
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<PAGE>
Address and Amount of Commitments:
Address: Citibank, N.A.
Citibank, N.A.
399 Park Avenue
12th Floor - Zone 8 By_____________________________
New York, New York 10043 Name:________________________
Attn.: Peter Bickford Title:_______________________
Telecopy: (212) 935-4285
Telephone: (212) 559-8146
Revolving Credit Commitment: $12,500,000
Short-Term Revolving Credit Commitment: $25,000,000
Lending Offices:
Domestic Rate Loans:
2 Penn's Way
Suite 200
New Castle, Delaware 19720
Attn.: Sally Schoenleber
Telephone: (302) 894-6061
Eurocurrency Loans:
2 Penn's Way
Suite 200
New Castle, Delaware 19720
Attn.: Sally Schoenleber
Telephone: (302) 894-6061
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<PAGE>
Address and Amount of Commitments:
Address: Bank of America, N.A.
Bank of America, N.A.
231 South LaSalle Street
10th Floor By_____________________________
Chicago, Illinois 60697 Name:________________________
Attn.: Elizabeth Bishop Title:_______________________
Telecopy: (312) 987-0889
Telephone: (312) 828-6550
Revolving Credit Commitment: $12,500,000
Short-Term Revolving Credit Commitment: $25,000,000
Lending Offices:
Domestic Rate Loans:
231 South LaSalle Street
10th Floor
Chicago, Illinois 60697
Attn.: Chris Morris
Eurocurrency Loans:
231 South LaSalle Street
10th Floor
Chicago, Illinois 60697
Attn.: Chris Morris
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<PAGE>
Address and Amount of Commitments:
Address: LaSalle Bank National Association
LaSalle Bank National Association
135 South LaSalle Street
Suite 1126 By________________________________
Chicago, Illinois 60603 Name:___________________________
Attn.: Kyle Freimuth Title:__________________________
Telecopy: (312) 904-6546
Telephone: (312) 904-4623
Revolving Credit Commitment: $5,000,000
Short-Term Revolving Credit Commitment: $10,000,000
Lending Offices:
Domestic Rate Loans:
135 South LaSalle Street
Suite 1126
Chicago, Illinois 60603
Attn.: Amy Ahmad
Telephone: (312) 904-2694
Eurocurrency Loans:
135 South LaSalle Street
Suite 1126
Chicago, Illinois 60603
Attn.: Amy Ahmad
Telephone: (312) 904-2694
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<PAGE>
Address and Amount of Commitments:
Address: The Northern Trust Company
The Northern Trust Company
50 South LaSalle Street
Chicago, Illinois 60675 By_____________________________
Attn.: Nicole Boehm Name:________________________
Telecopy: (312) 444-3640 Title:_______________________
Telephone: (312) 630-6062
Revolving Credit Commitment: $5,000,000
Short-Term Revolving Credit Commitment: $10,000,000
Lending Offices:
Domestic Rate Loans:
50 South LaSalle Street
Chicago, Illinois 60675
Attn.: Linda Honda
Eurocurrency Loans:
50 South LaSalle Street
Chicago, Illinois 60675
Attn.: Linda Honda
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<PAGE>
Exhibit A
Notice of Payment Request
[Name of Bank] [Date]
[Address]
Attention:
Reference is made to the Credit Agreement, dated as of September 11,
2000 among Arthur J. Gallagher & Co., AJG Financial Services, Inc., the Banks
named therein, and Harris Trust and Savings Bank, as Agent (the "Credit
Agreement"). Capitalized terms used herein and not defined herein have the
meanings assigned to them in the Credit Agreement. [The relevant Borrower,
________, has failed to pay its Reimbursement Obligation in the amount of
$__________. Your Bank's Percentage of the unpaid Reimbursement Obligation is
$____________] or [Harris Trust and Savings Bank has been required to return a
payment by the relevant Borrower, ________, of a Reimbursement Obligation in the
amount of $____________. Your Bank's Percentage of the returned Reimbursement
Obligations is $____________.]
Very truly yours,
Harris Trust and Savings Bank
By
Its___________________________
<PAGE>
Exhibit B
Revolving Credit Note
September 11, 2000
FOR VALUE RECEIVED, the undersigned, ARTHUR J. GALLAGHER & CO., a Delaware
corporation ("Gallagher"), and AJG FINANCIAL SERVICES, INC., a Delaware
corporation ("AJG"; Gallagher and AJG being referred to herein collectively as
the "Borrowers" and individually as a "Borrower"), jointly and severally promise
to pay to the order of ________________________________ (the "Bank") on the
Termination Date of the hereinafter defined Credit Agreement, at the principal
office of Harris Trust and Savings Bank, in Chicago, Illinois, (or in the case
of Eurocurrency Loans denominated in an Alternative Currency, at such office as
the Agent has previously notified the Borrowers) in the currency of such Loan in
accordance with Section 5.1 of the Credit Agreement, the aggregate unpaid
principal amount of all Revolving Loans made by the Bank to the Borrowers
pursuant to the Credit Agreement, together with interest on the principal amount
of each Revolving Loan from time to time outstanding hereunder at the rates, and
payable in the manner and on the dates, specified in the Credit Agreement.
The Bank shall record on its books or records or on a schedule attached to
this Note, which is a part hereof, each Revolving Loan made by it pursuant to
the Credit Agreement, together with all payments of principal and interest and
the principal balances from time to time outstanding hereon, whether the
Revolving Loan is a Domestic Rate Loan or a Eurocurrency Loan, the currency
thereof and the interest rate and Interest Period applicable thereto, provided
that prior to the transfer of this Note all such amounts shall be recorded on a
schedule attached to this Note. The record thereof, whether shown on such books
or records or on a schedule to this Note, shall be prima facie evidence of the
same, provided, however, that the failure of the Bank to record any of the
foregoing or any error in any such record shall not limit or otherwise affect
the obligation of the Borrowers to repay all Revolving Loans made to it pursuant
to the Credit Agreement together with accrued interest thereon.
This Note is one of the Notes referred to in the Credit Agreement dated as
of September 11, 2000, among the Borrowers, Harris Trust and Savings Bank,
individually and as Agent, and the banks from time to time party thereto (said
Credit Agreement, as amended, modified or restated from time to time, being
referred to herein as the "Credit Agreement"), and this Note and the holder
hereof are entitled to all the benefits provided for thereby or referred to
therein, to which Credit Agreement reference is hereby made for a statement
thereof. All defined terms used in this Note, except terms otherwise defined
herein, shall have the same meaning as in the Credit Agreement.
Prepayments may be made hereon and this Note may be declared due prior to
the expressed maturity hereof, all in the events, on the terms and in the manner
as provided for in the Credit Agreement.
This Note shall be governed by and construed in accordance with the
internal laws of the State of Illinois.
<PAGE>
The Borrowers hereby jointly and severally promise to pay all reasonable
costs and expenses (including attorneys' fees) suffered or incurred by the
holder hereof in collecting this Note or enforcing any rights in any collateral
therefor, all as more particularly provided in the Credit Agreement. The
Borrowers hereby waive demand, presentment, protest or notice of any kind
hereunder except as expressly provided in the Credit Agreement.
Arthur J. Gallagher & Co.
By
Its________________________________
AJG Financial Services, Inc.
By
Name: _____________________________
Title: ____________________________
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<PAGE>
Exhibit C
Short-Term Revolving Credit Note
September 11, 2000
FOR VALUE RECEIVED, the undersigned, ARTHUR J. GALLAGHER & CO., a Delaware
corporation ("Gallagher"), and AJG FINANCIAL SERVICES, INC., a Delaware
corporation ("AJG"; Gallagher and AJG being referred to herein collectively as
the "Borrowers" and individually as a "Borrower"), jointly and severally promise
to pay to the order of ________________________________ (the "Bank") on the
Short-Term Revolving Credit Termination Date of the hereinafter defined Credit
Agreement, at the principal office of Harris Trust and Savings Bank, in Chicago,
Illinois, (or in the case of Eurocurrency Loans denominated in an Alternative
Currency, at such office as the Agent has previously notified the Borrowers) in
the currency of such Loan in accordance with Section 5.1 of the Credit
Agreement, the aggregate unpaid principal amount of all Short-Term Revolving
Loans made by the Bank to the Borrowers pursuant to the Credit Agreement,
together with interest on the principal amount of each Short-Term Revolving Loan
from time to time outstanding hereunder at the rates, and payable in the manner
and on the dates, specified in the Credit Agreement.
The Bank shall record on its books or records or on a schedule attached to
this Note, which is a part hereof, each Short-Term Revolving Loan made by it
pursuant to the Credit Agreement, together with all payments of principal and
interest and the principal balances from time to time outstanding hereon,
whether the Short-Term Revolving Loan is a Domestic Rate Loan or a Eurocurrency
Loan, the currency thereof and the interest rate and Interest Period applicable
thereto, provided that prior to the transfer of this Note all such amounts shall
be recorded on a schedule attached to this Note. The record thereof, whether
shown on such books or records or on a schedule to this Note, shall be prima
facie evidence of the same, provided, however, that the failure of the Bank to
record any of the foregoing or any error in any such record shall not limit or
otherwise affect the obligation of the Borrowers to repay all Short-Term
Revolving Loans made to it pursuant to the Credit Agreement together with
accrued interest thereon.
This Note is one of the Notes referred to in the Credit Agreement dated as
of September 11, 2000, among the Borrowers, Harris Trust and Savings Bank,
individually and as Agent, and the banks from time to time party thereto (said
Credit Agreement, as amended, modified or restated from time to time, being
referred to herein as the "Credit Agreement"), and this Note and the holder
hereof are entitled to all the benefits provided for thereby or referred to
therein, to which Credit Agreement reference is hereby made for a statement
thereof. All defined terms used in this Note, except terms otherwise defined
herein, shall have the same meaning as in the Credit Agreement.
Prepayments may be made hereon and this Note may be declared due prior to
the expressed maturity hereof, all in the events, on the terms and in the manner
as provided for in the Credit Agreement.
<PAGE>
This Note shall be governed by and construed in accordance with the
internal laws of the State of Illinois.
The Borrowers hereby jointly and severally promise to pay all reasonable
costs and expenses (including attorneys' fees) suffered or incurred by the
holder hereof in collecting this Note or enforcing any rights in any collateral
therefor, all as more particularly provided in the Credit Agreement. The
Borrowers hereby waive demand, presentment, protest or notice of any kind
hereunder except as expressly provided in the Credit Agreement.
Arthur J. Gallagher & Co.
By
Its_________________________________
AJG Financial Services, Inc.
By
Name: _____________________________
Title: ____________________________
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<PAGE>
Exhibit D
Swing Line Note
$30,000,000.00 September 11, 2000
On the Termination Date, for value received, the undersigned, ARTHUR J.
GALLAGHER & CO., a Delaware corporation ("Gallagher"), and AJG FINANCIAL
SERVICES, INC., a Delaware corporation ("AJG"; Gallagher and AJG being referred
to herein collectively as the "Borrowers" and individually as a "Borrower"),
jointly and severally promise to pay to the order of Harris Trust and Savings
Bank (the "Bank"), at the principal office of Harris Trust and Savings Bank in
Chicago, Illinois, the principal sum of (i) Thirty Million and 00/100 Dollars
($30,000,000.00), or (ii) such lesser amount as may at the time of the maturity
hereof, whether by acceleration or otherwise, be the aggregate unpaid principal
amount of all Swing Loans owing from the Borrowers to the Bank under the Swing
Line Commitment provided for in the Credit Agreement hereinafter mentioned.
This Note evidences Swing Loans made and to be made to the Borrowers by the
Bank under the Swing Line Commitment provided for under that certain Credit
Agreement dated as of September 11, 2000 by and between the Borrowers, Harris
Trust and Savings Bank, individually and as Agent, and the banks from time to
time party thereto (said Credit Agreement, as amended, modified or restated from
time to time, being referred to herein as the "Credit Agreement"), and the
Borrowers hereby jointly and severally promise to pay interest at the office
specified above on each Swing Loan evidenced hereby at the rates and times
specified therefor in the Credit Agreement.
Each Swing Loan made under the Swing Line Commitment provided for in the
Credit Agreement by the Bank to the Borrowers against this Note, any repayment
of principal hereon and the interest rates applicable thereto shall be endorsed
by the holder hereof on the reverse side of this Note or recorded on the books
and records of the holder hereof (provided that such entries shall be endorsed
on the reverse side hereof prior to any negotiation hereof) and the Borrowers
agree that in any action or proceeding instituted to collect or enforce
collection of this Note, the entries so endorsed on the reverse side hereof or
recorded on the books and records of the Bank shall be prima facie evidence of
the unpaid balance of this Note and the interest rates applicable thereto.
This Note is issued by the Borrowers under the terms and provisions of the
Credit Agreement, and this Note and the holder hereof are entitled to all of the
benefits and security provided for thereby or referred to therein, to which
reference is hereby made for a statement thereof. This Note may be declared to
be, or be and become, due prior to its expressed maturity as specified in the
Credit Agreement, and certain prepayments are required to be made hereon, all in
the events, on the terms and with the effects provided in the Credit Agreement.
All capitalized
<PAGE>
terms used herein without definition shall have the same meaning herein as such
terms have in the Credit Agreement.
This Note shall be construed in accordance with, and governed by, the
internal laws of the State of Illinois without regard to principles of conflict
of law.
The Borrowers hereby jointly and severally promise to pay all reasonable
costs and expenses (including attorneys' fees) suffered or incurred by the
holder hereof in collecting this Note or enforcing any rights in any collateral
therefor, all as more particularly provided in the Credit Agreement. The
Borrowers hereby waive demand, presentment, protest or notice of any kind
hereunder except as expressly provided in the Credit Agreement.
Arthur J. Gallagher & Co.
By
Its_________________________________
AJG Financial Services, Inc.
By
Name: _____________________________
Title: ____________________________
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<PAGE>
Exhibit E
Bid Note
_____________, 20___
For Value Received, the undersigned Arthur J. Gallagher & Co., a
Delaware corporation ("Gallagher"), and AJG Financial Services, Inc., a Delaware
corporation ("AJG", Gallagher and AJG being referred to herein collectively as
the "Borrowers" and individually as a "Borrower"), jointly and severally promise
to pay to the order of ________________________________________ (the "Bank") on
the Short-Term Revolving Credit Termination Date, at the principal office of
Harris Trust and Savings Bank in Chicago, Illinois in immediately available
funds, the aggregate unpaid principal amount of all Bid Loans made by the Bank
to either Borrower pursuant to the Credit Agreement hereinafter identified and
defined, and with each Bid Loan to mature and become payable on the last day of
the Interest Period applicable thereto, but in no event later than the
Short-Term Revolving Credit Termination Date, together with interest on the
principal amount of each Bid Loan from time to time outstanding hereunder at the
rates, and payable in the manner and on the dates, specified in the Credit
Agreement.
The Bank shall record on its books and records or on a schedule
attached to this Note, which is a part hereof, each Bid Loan made by it pursuant
to the Credit Agreement, together with all payments of principal and interest
and the principal balances thereof from time to time outstanding hereon and the
interest rate and Interest Period applicable thereto, provided that prior to the
transfer of this Note all such amounts shall be recorded on a schedule attached
to this Note. The record thereof, whether shown on such books and records or on
a schedule to this Note, shall be prima facie evidence of the same, provided,
however, that the failure of the Bank to record any of the foregoing or any
error in any such record shall not limit or otherwise affect the obligation of
the Borrowers to repay all Bid Loans made to them pursuant to the Credit
Agreement together with accrued interest thereon.
This Bid Note is one of the Notes referred to in the Credit Agreement
dated as of September 11, 2000, among the Borrowers, Harris Trust and Savings
Bank as Agent, and the Banks party thereto (the "Credit Agreement"), and this
Note and the holder hereof are entitled to all the benefits provided for thereby
or referred to therein, to which Credit Agreement reference is hereby made for a
statement thereof. All defined terms used in this Note, except terms otherwise
defined herein, shall have the same meaning herein as such terms have in the
Credit Agreement.
This Note may be declared due prior to the expressed maturity hereof on
the terms and in the manner provided for in the Credit Agreement.
This Note shall be governed and construed in accordance with the
internal laws of the State of Illinois.
<PAGE>
The Borrowers hereby jointly and severally promise to pay all
reasonable costs and expenses (including attorneys' fees) suffered or incurred
by the holder hereof in collecting this Note or enforcing any rights in any
collateral therefor, all as more particularly provided for in the Credit
Agreement. The Borrowers hereby waive demand, presentment, protest or notice of
any kind hereunder except as expressly provided in the Credit Agreement.
Arthur J. Gallagher & Co.
By
Its____________________________________
AJG Financial Services, Inc.
By
Its____________________________________
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<PAGE>
Exhibit F
Bid Loan Request Confirmation
[Date]
Harris Trust and Savings Bank,
as Agent for the Banks
party to the Credit Agreement
referred to below
Attention:
The undersigned, ___________________________________________ (the
"Borrower") refers to the Credit Agreement dated as of September 11, 2000 (the
"Credit Agreement"), among Arthur J. Gallagher & Co., AJG Financial Services,
Inc., the Banks named therein and Harris Trust and Savings Bank as Agent for the
Banks. Capitalized terms used and not defined herein have the meanings assigned
to them in the Credit Agreement. The undersigned Borrower hereby confirms that
it has, on the date hereof, given you notice pursuant to Section 3.2 of the
Credit Agreement that it requests a Borrowing of a Bid Loan under the Credit
Agreement, and in that connection sets forth below the terms on which such
Borrowing is requested to be made:
(A) Date of proposed Borrowing of Bid Loan/1/ __________
(B) Aggregate Principal Amount
of Borrowing of Bid Loan/2/ ______________
(C) Interest Period/3/ ______________
______________
______________
___________________
/1/ The Bid Loan Request Confirmation must be received on a Business Day by
the Agent not later than 2:30 p.m. (Chicago time) one Business Day
before the proposed Borrowing Date.
/2/ Not less than $5,000,000 and in integral multiples of $1,000,000.
/3/ Which shall be no more than 180 days or less than 7 days and shall end
not later than the Short-Term Revolving Credit Termination Date.
<PAGE>
(D) If applicable, maximum amount __________
requested for each Interest __________
Period/4/ ______________
Upon acceptance of any or all of the Bids offered by Banks in response
to this request, the Borrowers shall be deemed to affirm as of such date the
representations and warranties made in the Credit Agreement to the extent
specified in Section 8 thereof.
Very truly yours,
[Name of Relevant Borrower]
By
Its__________________________
_____________________
/4/ May not exceed amount in (B) for any Interest Period and for each
Interest Period must be not less than $5,000,000 and in integral
multiples of $1,000,000.
-2-
<PAGE>
Exhibit G
Invitation to Bid
[Name of Bank] [Date]
[Address]
Attention:
Reference is made to the Credit Agreement, dated as of September 11,
2000 (the "Credit Agreement") among Arthur J. Gallagher & Co., AJG Financial
Services, Inc., the Banks named therein and Harris Trust and Savings Bank as
Agent for the Banks. Capitalized terms used and not defined herein have the
meanings assigned to them in the Credit Agreement. [Borrower] made a Bid Loan
--------------
Request on ______________, ____ pursuant to Section 3.2 of the Credit Agreement,
and in that connection you are invited to submit a Bid by [Date] . Your Bid must
--------
comply with Section 3.2 of the Credit Agreement and the terms set forth below on
which the Bid Loan Request was made.
(A) Date of proposed Borrowing of Bid Loan _________________
(B) Aggregate Principal Amount of
of Competitive Advance Interest Periods
1. ________________________ _________________
2. ________________________ _________________
3. ________________________ ______________
(C) The Bid must be received by Harris Trust and Savings Bank not later
than 9:00 a.m. (Chicago time) on the proposed Borrowing Date.
Very truly yours,
Harris Trust and Savings Bank
as Agent for the Banks
By
Its___________________________
<PAGE>
Exhibit H
Confirmation of Bid
[Date]
Harris Trust and Savings Bank,
as Agent for the Banks party to the
Credit Agreement referred to below
Attention:
The undersigned, [Name of Bank] , refers to the Credit Agreement dated
----------------
as of September 11, 2000 (the "Credit Agreement") among Arthur J. Gallagher &
Co., AJG Financial Services, Inc., the Banks named therein and Harris Trust and
Savings Bank as Agent for the Banks. Capitalized terms used and not defined
herein have the meanings assigned to them in the Credit Agreement. The
undersigned hereby confirms that on the date hereof it has made a Bid pursuant
to Section 3.2 of the Credit Agreement, in response to the Bid Loan Request made
by [Borrower] on _____________, 20__, and in that connection sets forth below
--------------
the terms on which such Bid is made:
Date of proposed Borrowing of Bid Loan: ________________________/1/
Principal Interest Interest
Amount/2/ Period/3/ Rate/4/
Very truly yours,
[Name of Bank]
By
Its_____________________________
_____________________
/1/ As specified in the related Invitation to Bid.
/2/ Principal amount bid for each Interest Period may not exceed the
principal amount requested by the Borrower or the maximum amount
requested for that Interest Period, if less. Bids must be made in a
minimum amount of $5,000,000 and in integral multiples of $1,000,000.
/3/ Up to 180 days and not less than 7 days, as specified in the related
Invitation to Bid.
/4/ Specify rate of interest per annum computed on the basis of a year of
360 days and actual days elapsed.
<PAGE>
Exhibit I
Notice of Acceptance of Bid
[Name of Bank] [Date]
[Address]
Attention:
Reference is made to the Credit Agreement, dated as of September 11,
2000 (the "Credit Agreement") among Arthur J. Gallagher & Co., AJG Financial
Services, Inc., the Banks named therein and Harris Trust and Savings Bank as
Agent for the Banks. Capitalized terms used and not defined herein have the
meanings assigned to them in the Credit Agreement. [Borrower] made a Bid Loan
--------------
Request on _____________, ____ pursuant to Section 3.2 of the Credit Agreement,
and in that connection you have submitted a Bid. Your Bid has been accepted as
set forth below.
(A) Date of proposed Borrowing of Bid Loan __________
(B) Principal Amount of Bid Loan(s) __________
(C) Your Bid accepted:
Interest
Amount: __________ Period: __________ Rate: __________
__________ __________ __________
__________ __________ __________
(D) Aggregate winning bids:
Interest
Amount: __________ Period: __________ Rate: __________
__________ __________ __________
__________ __________ __________
Very truly yours,
Harris Trust and Savings Bank,
as Agent for the Banks
By
Its______________________________
<PAGE>
Exhibit J
Compliance Certificate
This Compliance Certificate is furnished to Harris Trust and Savings
Bank as Agent pursuant to the Credit Agreement, dated as of September 11, 2000
among Arthur J. Gallagher & Co., AJG Financial Services, Inc., the Banks
signatory thereto and Harris Trust and Savings Bank, as Agent (the "Credit
Agreement"). Unless otherwise defined herein, the terms used in this Compliance
Certificate have the meanings ascribed thereto in the Credit Agreement.
The Undersigned Hereby Certifies That:
1. I am the duly elected ________________________________ of
Gallagher;
2. I have reviewed the terms of the Credit Agreement and I
have made, or have caused to be made under my supervision, a detailed
review of the transactions and conditions of Gallagher and its
Subsidiaries during the accounting period covered by the attached
financial statements;
3. The examinations described in paragraph 2 did not
disclose, and I have no knowledge of, the existence of any condition or
the occurrence of any event which constitutes a Default or Event of
Default during or at the end of the accounting period covered by the
attached financial statements or as of the date of this Certificate,
except as set forth below;
4. The financial statements required by Section 9.5 of the
Credit Agreement and being furnished to you concurrently with this
certificate are, to the best of my knowledge, true, correct and
complete as of the dates and for the periods covered thereby; and
5. The Attachment hereto sets forth financial data and
computations evidencing the Borrowers' compliance with certain
covenants of the Credit Agreement, all of which data and computations
are, to the best of my knowledge, true, complete and correct and have
been made in accordance with the relevant Sections of the Credit
Agreement.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrowers have taken, are taking, or propose to
take with respect to each such condition or event:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
<PAGE>
The foregoing certifications, together with the computations set forth
in the Attachment hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this _________ day of
__________________ 20___.
____________________________________________
________________________________, __________
(Type or Print Name) (Title)
-2-
<PAGE>
ATTACHMENT TO COMPLIANCE CERTIFICATE
ARTHUR J. GALLAGHER & CO. AND AJG FINANCIAL SERVICES, INC.
Compliance Calculations for Credit Agreement
Dated as of September 11, 2000
Calculations as of _____________, 20___
================================================================================
A. NET WORTH (SECTION 9.7)
1. Net Worth as defined _________
2. Net Worth (Line 1) must not be
less than $200,000,000
============
3. Borrowers are in compliance?
(Circle yes or no) Yes/No
==========
B. DEBT TO NET WORTH RATIO (SECTION 9.8)
1. Funded Debt as defined _________
2. Net Worth as defined _________
3. Ratio of Funded Debt
(Line 1) to Net Worth (Line 2)
("Debt to Net Worth Ratio") :1
==========
4. As listed in Section 9.8, for
the date of this Certificate, the
Debt to Net Worth Ratio must not
be more than 1.0:1
==========
5. Borrowers are in compliance?
(Circle yes or no) Yes/No
==========
C. FIXED CHARGE COVERAGE RATIO (SECTION 9.9)
1. Net Income as defined __________
2. Amounts deducted in arriving
at Net Income in respect of
<PAGE>
(a) Interest Expense as defined ___________
(b) Federal, state, and local income taxes ___________
(c) Depreciation of fixed assets and
amortization of intangible assets ___________
(d) Amounts payable in respect of leases
similar arrangements ___________
3. Sum of Lines 1, 2(a), 2(b), (2(c)
and 2(d) ("EBITDAR") ___________
4. Capital Expenditures as defined ___________
5. Restricted Payments as defined ___________
6. Line 3 minus Line 4 minus Line 5 ___________
7. Interest Expense as defined ___________
8. Current Maturities as defined ___________
9. Amounts payable in respect of leases
and similar arrangements ___________
10. Sum of Lines 7, 8 and 9 ___________
11. Ratio of Line 6 to Line 10
("Fixed Charge Coverage Ratio") :1
===========
12. As listed in Section 9.9, for the date
of this Certificate, the Fixed Charge
Coverage Ratio must not be less than 1.50:1
===========
13. Borrowers are in compliance
(Circle yes or no) Yes/No
===========
-2-
<PAGE>
EXHIBIT K
ASSIGNMENT AND ACCEPTANCE
Dated _____________, 20_____
Reference is made to the Credit Agreement dated as of September 11,
2000 (the "Credit Agreement") among Arthur J. Gallagher & Co., AJG Financial
Services, Inc., the Banks and Harris Trust and Savings Bank, as Agent for the
Banks. Terms defined in the Credit Agreement are used herein with the same
meaning.
_____________________________________________________ (the "Assignor")
and _________________________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, a _______% interest in
and to all of the Assignor's rights and obligations under the Credit Agreement
as of the Effective Date (as defined below), including, without limitation, such
percentage interest in the Assignor's Revolving Credit Commitment as in effect
on the Effective Date and the Revolving Loans, if any, owing to the Assignor on
the Effective Date and the Assignor's Percentage of any outstanding L/C
Obligations and Revolving Swing Loans, if any, and the Assignor's Short-Term
Revolving Credit Commitment as in effect on the Effective Date and the Short-
Term Revolving Loans and Bid Loans, if any, owing to the Assignor on the
Effective Date and the Assignor's Percentage of outstanding Short-Term Swing
Loans, if any.
2. The Assignor (i) represents and warrants that as of the date
hereof (A) its Revolving Credit Commitment is $____________, (B) the aggregate
outstanding principal amount of Revolving Loans made by it under the Credit
Agreement that have not been repaid is $____________ and a description of the
interest rates, currencies and interest periods for such Revolving Loans is
attached as Schedule I hereto, (C) the aggregate principal amount of Assignor's
outstanding L/C Obligations is $___________, (D) the aggregate amount of
Assignor's participations (whether or not funded) in outstanding Revolving Swing
Loans is $_____________ (E) its Short-Term Revolving Credit Commitment is
$__________, (F) the aggregate outstanding principal amount of Short-Term
Revolving Loans made by it under the Credit Agreement that have not been repaid
is $__________ and a description of the interest rates, currencies and interest
periods for such Short-Term Revolving Loans is attached as Schedule I hereto,
(G) the aggregate amount of Assignor's participations (whether or not funded) in
outstanding Short-Term Swing Loans is $___________ and (H) the aggregate
outstanding principal amount of Bid Loans made by it under the Credit Agreement
that have not been repaid is $____________ and a description of the interest
rates and interest periods for such Bid Loans is attached as Schedule I hereto;
(ii) represents and warrants that it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free and clear
of any adverse claim, lien, or encumbrance of any kind; (iii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in
<PAGE>
or in connection with the Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or any
other instrument or document furnished pursuant thereto; and (iv) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Borrowers or the performance or observance by either
Borrower of any of their respective obligations under the Credit Agreement or
any other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered to the Banks pursuant to Section 9.5(a) and Section 9.5(b) thereof and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and Acceptance;
(ii) agrees that it will, independently and without reliance upon the Agent, the
Assignor 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 action under the Credit Agreement; (iii) appoints and
authorizes the Agent to take such action as Agent on its behalf and to exercise
such powers under the Credit Agreement as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
(iv) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Bank; and (v) specifies as its lending offices (and address
for notices) the offices set forth beneath its name on the signature pages
hereof.
4. As consideration for the assignment and sale contemplated in
Section 1 hereof, the Assignee shall pay to the Assignor on the date hereof in
Federal funds an amount equal to $________________*. It is understood that
facility and/or Letter of Credit fees accrued to the date hereof with respect to
the interest assigned hereby are for the account of the Assignor and such fees
accruing from and including the date hereof are for the account of the Assignee.
Each of the Assignor and the Assignee hereby agrees that if it receives any
amount under the Credit Agreement which is for the account of the other party
hereto, it shall receive the same for the account of such other party to the
extent of such other party's interest therein and shall promptly pay the same to
such other party.
5. The effective date for this Assignment and Acceptance shall be
_____________, 20___ (the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Borrowers for their
acceptance, to the extent required by the Credit Agreement, and to the Agent for
acceptance and recording by the Agent.
6. Upon such acceptance and recording, as of the Effective Date, (i)
the Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of a
Bank thereunder and (ii) the Assignor shall, to
___________________________
* Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee. It may be preferable
in an appropriate case to specify these amounts generically or by formula
rather than as a fixed sum.
<PAGE>
the extent provided in this Assignment and Acceptance, relinquish its rights and
be released from its obligations under the Credit Agreement.
7. Upon such acceptance and recording, from and after the Effective
Date, the Agent shall make all payments under the Credit Agreement in respect of
the interest assigned hereby (including, without limitation, all payments of
principal, interest and commitment fees with respect thereto) to the Assignee.
The Assignor and Assignee shall make all appropriate adjustments in payments
under the Credit Agreement for periods prior to the Effective Date directly
between themselves.
8. In accordance with Section 13.12 of the Credit Agreement, the
Assignor and the Assignee request and direct that the Agent prepare and cause
the Borrowers to execute and deliver (a) to the Assignee a Revolving Credit Note
payable to the Assignee, a Short-Term Revolving Credit Note payable to the
Assignee and a Bid Note (or Bid Notes, as the case may be) payable to the
Assignee to reflect its Revolving Credit Commitment, Short-Term Revolving Credit
Commitment and Bid Loans, respectively, after giving effect to the assignment
hereunder and (b) to the Assignor a new Bid Note (or Bid Notes, as the case may
be) payable to the Assignor to reflect its Bid Loans after giving effect to the
assignment hereunder.
9. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of Illinois.
[ASSIGNOR LENDER]
By:________________________________________
Title:
[ASSIGNEE LENDER]
By:________________________________________
Title:
Lending Office (and address for notices):
___________________________________________
___________________________________________
___________________________________________
LIBOR Funding Office:
___________________________________________
___________________________________________
___________________________________________
-3-
<PAGE>
Accepted and consented this
____ day of ___________, ____
ARTHUR J. GALLAGHER & CO.
By:_________________________________________
Title:______________________________________
AJG FINANCIAL SERVICES, INC.
By:_________________________________________
Title:______________________________________
Accepted and consented to by the Agent this
_______ day of ___________, ____
[AGENT]
By:_________________________________________
Title:______________________________________
-4-
<PAGE>
SCHEDULE I
TO
ASSIGNMENT AND ACCEPTANCE
REVOLVING LOANS
---------------
Type of
Principal Revolving Interest Last Day of
Amount Loan Currency Rate Interest Period
SHORT-TERM REVOLVING LOANS
---------------------------
Type of
Principal Revolving Interest Last Day of
Amount Loan Currency Rate Interest Period
BID LOANS
---------
Principal Interest Last Day of
Amount Rate Interest Period
<PAGE>
Schedule 1.2(a)
Existing Letters Of Credit
<TABLE>
<CAPTION>
Letter of Stated Stated
Credit Number Maturity Date Amount Beneficiary
------------- ------------- ------ -----------
<S> <C> <C> <C>
SPL 34032 10/1/00 $2,000,000 Hartford Fire Insurance
Company
SPL 32852 10/1/00 $380,000 Travelers
SPL 34959 11/15/00 $187,756 Cooperative Self-Insured Fund
SPL 36487 6/12/01 $2,200,000 Peachtree/First Union
SPL 37047 6/30/06 1,000,000 MacQuarie Bank
(Australian
Dollars)
SPL 37054 5/10/01 $90,000 Ameren CIPS
SPL 37055 5/10/01 $180,000 Ameren CIPS
SPL 37304 11/16/00 $5,000,000 Rabobank-Amsterdam Raubles Corp.
SPL 37312 11/22/00 $4,379,608 IL Dept. of Natural Resources
SPL 37331 1/28/01 $3,700,000 Chase Manhattan
SPL 90002459 4/19/01 $100,000 Mercantile Bank
SPL 90002448 4/19/01 $300,000 Mercantile Bank
</TABLE>
<PAGE>
Schedule 7.2
Existing Subsidiaries
Those companies which are indented represent Subsidiaries of the
corporation under which they are indented. Except for directors' qualifying
shares, 100% of the Voting Stock of each of the Subsidiaries listed below, other
than those indicated by footnote, is owned of record or beneficially by its
indicated parent./1/
<TABLE>
<CAPTION>
State or Other
Jurisdiction of
Name Incorporation
<S> <C>
Arthur J. Gallagher & Co. Delaware
Arthur J. Gallagher & Co. (Illinois) Illinois
Arthur J. Gallagher & Co. of Oklahoma, Inc. Oklahoma
Arthur J. Gallagher Risk Management Services, Inc. Illinois
Arthur J. Gallagher & Co. of Michigan, Inc. Michigan
Arthur J. Gallagher & Co. of Wisconsin, Inc. Wisconsin
Arthur J. Gallagher & Co. of Pennsylvania, Inc. Pennsylvania
Gallagher Captive Services, Inc. Delaware
Arthur J. Gallagher & Co.--Chicago Metro Illinois
Arthur J. Gallagher & Co. (St. Louis) Delaware
Gallagher Holt, Inc. Texas
Arthur J. Gallagher, Inc. Texas
Gallagher Braniff, Inc. Texas
Arthur J. Gallagher & Co. (Florida) Florida
Arthur J. Gallagher & Co. of New York, Inc. New York
Arthur J. Gallagher & Co. Ohio Agency, Inc. Ohio
Risk Placement Services, Inc. Illinois
</TABLE>
________________________
/1/ Gallagher conducts some of its operations under the following names:
Gallagher Bassett Information Services; Gallagher Risk Management Services;
Pacific Atlantic Administrators; The Boston Insurance Center; Gallagher
Heffernan; Broussard, Bush & Hurst; Henley, Williams & Associates; Gallagher
Steel Agency; Bryce Insurance; CMC Claims Management Corporation; The Planning
Corporation; Environmental Claims Management Incorporated; Gallagher Byerly,
Inc.; Innovative Risk Services, Inc.; and International Special Risk Services,
Inc.
<PAGE>
<TABLE>
<S> <C>
Arthur J. Gallagher & Co.--Greenville South Carolina
Arthur J. Gallagher and Co. of Massachusetts, Inc. Massachusetts
Gallagher Insurance Advisors, Inc. Massachusetts
Arthur J. Gallagher & Co. of Rhode Island, Inc. Rhode Island
Arthur J. Gallagher International, Inc. Delaware
Arthur J. Gallagher & Co. (Bermuda) Limited Bermuda
Arthur J. Gallagher Intermediaries (Bermuda) Limited Bermuda
Arthur J. Gallagher Management (Bermuda) Limited Bermuda
Gallagher Captive Services (Cayman) Limited Cayman Islands
Scholastic Risk Services Limited Bermuda
Artex Insurance Company Ltd./2/ Bermuda
Artex Underwriting Managers Ltd. Bermuda
Protected Insurance Company Bermuda
Arthur J. Gallagher & Co.--Little Rock Arkansas
Arthur J. Gallagher & Co. of Georgia, Inc. Georgia
Arthur J. Gallagher (UK) Limited England
Risk Management Partners Ltd./3/ England
John Plumer & Company Limited England
Morgan Insurance Services Limited England
Gallagher Bassett Services, Inc. Delaware
Gallagher Bassett of New York, Inc. New York
Gallagher Bassett International Ltd. Delaware
Gallagher Bassett International Ltd. (UK) England
Gallagher Bassett Canada Inc. Canada
Gallagher Benefit Administrators, Inc. Illinois
Gallagher Bassett Investigative Services, Inc. Delaware
Wyatt Gallagher Bassett Pty Ltd./3/ Australia
</TABLE>
_______________
/2/ 76% of the Common Stock of this subsidiary is owned by two third parties.
/3/ 50% of the Common Stock of each of these subsidiaries is owned by an
unrelated party.
-2-
<PAGE>
<TABLE>
<S> <C>
Gallagher Bassett Australia Pty Ltd. Australia
Wyatt Emerson Pty Ltd. Australia
Wyatt Group (PNG) Pty Ltd. New Guinea
Gallagher Bassett International S.A. France
Arthur J. Gallagher & Co. Insurance Brokers of California, Inc. California
Charity First Insurance Services, Inc. California
Arthur J. Gallagher & Co. of Connecticut, Inc. Connecticut
Arthur J. Gallagher Intermediaries, Inc. New York
Arthur J. Gallagher & Co.--Denver Colorado
Arthur J. Gallagher & Co. of Washington, Inc. Washington
Gallagher Louisiana, Inc. Louisiana
Arthur J. Gallagher of Louisiana, Inc. Louisiana
Arthur J. Gallagher & Co. of Mississippi, Inc. Mississippi
Arthur J. Gallagher & Co.--Kansas City, Inc. Missouri
IMC Insurance Management Corporation Missouri
IMC Services Corporation Missouri
GBS Retirement Services, Inc. New York
Arthur J. Gallagher & Co. of New Jersey, Inc. New Jersey
Arthur J. Gallagher & Co. Ohio Life Agency, Inc. Ohio
Gallagher Pipino, Inc. Ohio
Arthur J. Gallagher & Co. of Minnesota, Inc. Minnesota
Gallagher Alliance Insurance Services, Inc. Arizona
AJG Financial Services, Inc. Delaware
AJG Capital, Inc./4/ Illinois
AJG Investments, Inc. Delaware
AJG Premium Finance, Inc. Illinois
Lamberson Koster & Company California
Arthur J. Gallagher & Co. of Tennessee, Inc. Tennessee
Arthur J. Gallagher & Co. of Kentucky, Inc. Kentucky
</TABLE>
__________________
/4/ 10% of the Common Stock of this subsidiary is owned by an unrelated party.
-3-
<PAGE>
<TABLE>
<S> <C>
Gallagher Benefit Services, Inc. Delaware
Gallagher Benefit Services of Michigan, Inc. Michigan
Gallagher Benefit Services of the Carolinas, Inc. North Carolina
Gallagher Benefit Services of Colorado, Inc. Colorado
Gallagher Benefit Services of Kansas City, Inc. Delaware
Gallagher Benefit Services of New York, Inc. New York
Gallagher Benefit Services of Texas, Inc. Texas
Gallagher Benefit Services of Washington, D.C. Delaware
Generation 2000 Loss Control Services, Inc. Tennessee
Risk Placement Services of Texas, Inc. Texas
Arthur J. Gallagher Service Company Delaware
Risk Placement Services of Arkansas, Inc. Arkansas
Arthur J. Gallagher Australasia Pty Ltd.* Australia
AJG Two Pierce, Inc. Delaware
Gallagher Woods & Co., Inc. Delaware
Arthur J. Gallagher & Co. of Maryland, Inc. Maryland
</TABLE>
_______________
* 40% of the Common Stock of this subsidiary is owned by unrelated parties.
-4-
