<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the period ended September 30, 1994 OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
Commission File Number 1-9215
--------------------
UNITED ASSET MANAGEMENT CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 04-2714625
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 330-8900
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. X Yes No
----- -----
The number of shares of common stock outstanding as of November 1, 1994 was
28,096,636.
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<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements. (F-1 to F-4)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations. (F-5 to F-7)
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Certain of the Company's subsidiaries are subject to legal proceedings
arising in the ordinary course of business. On the basis of
information presently available and advice received from counsel, it
is the opinion of management that the disposition or ultimate
determination of such legal proceedings will not have a material
adverse effect on the financial position of the Company.
Item 2. Changes in Securities. Not Applicable
Item 3. Defaults Upon Senior Securities. None
Item 4. Submission of Matters to a Vote of Security Holders. Not Applicable
Item 5. Other Information. None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibit 2 - Not Applicable
Exhibit 4 - Not Applicable
Exhibit 10 - Amended and Restated Reducing Credit Agreement
dated as of August 29, 1994
Exhibit 11 - Calculation of Earnings Per Share (F-8)
Exhibit 15 - Not Applicable
Exhibit 18 - Not Applicable
Exhibit 19 - Not Applicable
Exhibit 20 - Not Applicable
Exhibit 23 - Not Applicable
Exhibit 24 - Not Applicable
Exhibit 25 - Not Applicable
Exhibit 28 - Not Applicable
(b) A report on Form 8-K was filed on October 12, 1994. The item
reported was as follows:
Exhibit 5 - Other Events - Execution of Amended and Restated
------------
Reducing Credit Agreement.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNITED ASSET MANAGEMENT CORPORATION
NOVEMBER 9, 1994 /s/ William H. Park
- ----------------------- ----------------------------------------
William H. Park
Senior Vice President
(Duly authorized officer and
principal financial officer)
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
UNITED ASSET MANAGEMENT CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ---------------------------
1994 1993 (1) 1994 1993 (1)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues.............................. $118,922,000 $111,402,000 $355,787,000 $331,087,000
------------ ------------ ------------ ------------
Operating expenses:
Compensation and related expenses... 57,910,000 51,556,000 172,053,000 162,586,000
Amortization of cost assigned
to contracts acquired............. 13,551,000 12,095,000 40,200,000 36,157,000
Other operating expenses............ 18,806,000 19,664,000 57,589,000 52,060,000
------------ ------------ ------------ ------------
90,267,000 83,315,000 269,842,000 250,803,000
------------ ------------ ------------ ------------
Operating income...................... 28,655,000 28,087,000 85,945,000 80,284,000
------------ ------------ ------------ ------------
Non-operating expenses:
Interest expense, net............... 2,599,000 3,235,000 8,094,000 10,794,000
Other amortization.................. 304,000 340,000 934,000 1,037,000
------------ ------------ ------------ ------------
2,903,000 3,575,000 9,028,000 11,831,000
------------ ------------ ------------ ------------
Income before income tax expense...... 25,752,000 24,512,000 76,917,000 68,453,000
Income tax expense.................... 10,996,000 11,051,000 32,963,000 29,917,000
------------ ------------ ------------ ------------
Net income............................ $ 14,756,000 $ 13,461,000 $ 43,954,000 $ 38,536,000
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Earnings per share:
Primary earnings per share.......... $0.50 $0.46 $1.49 $1.34
Fully diluted earnings per share.... $0.50 $0.45 $1.48 $1.31
Dividends per share................... $0.26 $0.22 $0.74 $0.62
<FN>
(1) Restated due to a pooling of interests transaction completed in the fourth
quarter of 1993.
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
F-1
<PAGE>
UNITED ASSET MANAGEMENT CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
(Unaudited)
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents............................ $ 73,561,000 $ 62,807,000
Investment management fees receivable................ 73,890,000 75,003,000
Other current assets................................. 7,106,000 5,611,000
------------ ------------
Total current assets................................... 154,557,000 143,421,000
Fixed assets, net...................................... 16,649,000 14,994,000
Cost assigned to contracts acquired, net............... 453,511,000 461,705,000
Other assets........................................... 57,245,000 55,680,000
------------ ------------
Total assets........................................... $681,962,000 $675,800,000
------------ ------------
------------ ------------
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses................ $ 51,781,000 $ 56,541,000
Accrued compensation................................. 42,426,000 20,331,000
Current portion of notes payable..................... 3,258,000 1,628,000
------------ ------------
Total current liabilities.............................. 97,465,000 78,500,000
Senior notes payable................................... 41,000,000 80,000,000
Subordinated notes payable............................. 117,965,000 130,551,000
Deferred income taxes.................................. 35,940,000 33,738,000
------------ ------------
Total liabilities...................................... 292,370,000 322,789,000
------------ ------------
Commitments and contingencies
Stockholders' equity:
Common stock, par value $.01 per share............... 283,000 270,000
Capital in excess of par value....................... 251,921,000 233,759,000
Retained earnings.................................... 144,269,000 118,982,000
------------ ------------
396,473,000 353,011,000
Less treasury shares at cost......................... (6,881,000) --
------------ ------------
Total stockholders' equity............................. 389,592,000 353,011,000
------------ ------------
Total liabilities and stockholders' equity............. $681,962,000 $675,800,000
------------ ------------
------------ ------------
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
F-2
<PAGE>
UNITED ASSET MANAGEMENT CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ---------------------------
1994 1993(1) 1994 1993(1)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash flow from operating activities:
Net income....................................... $ 14,756,000 $ 13,461,000 $ 43,954,000 $ 38,536,000
Adjustments to reconcile net income to net
cash flow provided by operating activities:
Amortization of cost assigned to
contracts acquired............................. 13,551,000 12,095,000 40,200,000 36,157,000
Depreciation..................................... 1,165,000 1,131,000 3,218,000 3,021,000
Other amortization............................... 304,000 340,000 934,000 1,037,000
------------ ------------ ------------ ------------
Net income plus amortization and depreciation.. 29,776,000 27,027,000 88,306,000 78,751,000
Changes in assets and liabilities:
(Increase) decrease in investment management
fees receivable.............................. (1,518,000) (3,914,000) 1,605,000 (4,481,000)
Decrease (increase) in other current assets.... 391,000 579,000 (1,456,000) 996,000
(Decrease) increase in accounts payable and
accrued expenses............................. (1,231,000) 6,549,000 (5,535,000) 4,765,000
Increase in accrued compensation............... 2,139,000 2,522,000 21,907,000 19,632,000
Increase in deferred income taxes.............. 1,702,000 1,310,000 2,202,000 3,186,000
------------ ------------ ------------ ------------
Net cash flow from operating activities............ 31,259,000 34,073,000 107,029,000 102,849,000
Cash flow from (used in) investing activities:
Cash additions to cost assigned to
contracts acquired............................. (14,408,000) (220,000) (23,950,000) (7,016,000)
Change in other assets........................... (1,280,000) 2,333,000 (6,900,000) (3,975,000)
------------ ------------ ------------ ------------
Net cash flow from (used in) investing activities.. (15,688,000) 2,113,000 (30,850,000) (10,991,000)
Cash flow from (used in) financing activities:
Purchase of treasury shares...................... (2,697,000) -- (13,397,000) (4,166,000)
Reductions in long-term debt, net................ (14,769,000) (29,617,000) (40,374,000) (63,888,000)
Issuance or reissuance of equity securities..... 1,456,000 4,157,000 7,448,000 7,250,000
Dividends declared............................... (7,307,000) (5,470,000) (20,819,000) (14,397,000)
------------ ------------ ------------ ------------
Net cash flow used in financing activities......... (23,317,000) (30,930,000) (67,142,000) (75,201,000)
Effect of foreign exchange rate changes on
cash flows....................................... 478,000 410,000 1,717,000 301,000
Net (decrease) increase in cash and cash
equivalents...................................... (7,268,000) 5,666,000 10,754,000 16,958,000
Cash and cash equivalents at beginning of period... 80,829,000 59,360,000 62,807,000 48,068,000
------------ ------------ ------------ ------------
Cash and cash equivalents at end of period......... $ 73,561,000 $ 65,026,000 $ 73,561,000 $ 65,026,000
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
<FN>
(1) Restated due to a pooling of interests transaction completed in the fourth
quarter of 1993.
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
F-3
<PAGE>
UNITED ASSET MANAGEMENT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1
In the opinion of management, the accompanying unaudited Condensed
Consolidated Financial Statements contain all adjustments, consisting only of
normal recurring accruals, necessary to present fairly the financial position of
the Company and its subsidiaries at September 30, 1994 and their results of
operations and cash flows for the three and nine-month periods ended September
30, 1994 and 1993. These Financial Statements should be read in conjunction
with the Company's Annual Report on Form 10-K for the year ended December 31,
1993.
Note 2
Accumulated depreciation of fixed assets was $28,948,000 and $25,730,000
at September 30, 1994 and December 31, 1993, respectively. The accumulated
amortization of cost assigned to contracts acquired was $257,523,000 and
$218,078,000 at September 30, 1994 and December 31, 1993, respectively.
Note 3
The Company has a systematic program to repurchase shares of its common
stock to meet the requirements for future issuance of shares upon the exercise
of stock options and warrants. During the three month period ended September
30, 1994, the Company repurchased 77,500 shares of its common stock at a cost of
$2,697,000. For the nine months ended September 30, 1994, common stock
repurchases totalled 403,500 shares at a cost of $13,397,000. During the three
and nine-month periods ended September 30, 1994, exercises of warrants and stock
options resulted in the Company extinguishing subordinated notes, receiving cash
proceeds and issuing stock as follows:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
September 30, 1994 September 30, 1994
------------------ ------------------
<S> <C> <C>
Subordinated notes extinguished $777,000 $16,741,000
Cash proceeds received $1,264,000 $4,155,000
Shares issued -- 735,247
Treasury shares reissued 103,116 203,604
</TABLE>
As of September 30, 1994, the Company held 199,896 treasury shares.
As of September 30, 1994, 3,682,000 warrants and 3,209,000 stock options
were outstanding at average exercise prices of $30.72 and $27.30, respectively.
Note 4
On July 14, 1994, the Company completed its acquisition of Suffolk Capital
Management in a transaction which is being accounted for as a purchase.
F-4
<PAGE>
UNITED ASSET MANAGEMENT CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The revenues of UAM's affiliated firms are principally derived from fees
for investment advisory services provided to institutional and other clients.
Investment advisory fees are generally a function of the overall fee rate
charged to each account and the level of assets under management by the
affiliated firms. Assets under management can be affected by client
contributions to new or existing accounts, withdrawals of assets from or
terminations of client accounts and investment performance, which may depend on
general market conditions.
AMORTIZATION OF COST ASSIGNED TO CONTRACTS ACQUIRED AND OPERATING CASH FLOW (NET
INCOME PLUS AMORTIZATION AND DEPRECIATION)
Cost assigned to contracts acquired, net of accumulated amortization,
represented 67% of the Company's total assets as of September 30, 1994.
Amortization of cost assigned to contracts acquired, which is a non-cash charge,
represented 15% of the Company's operating expenses for both the three and nine-
month periods ended September 30, 1994. Recording the cost assigned to
contracts acquired as an asset, with the resulting amortization as an operating
expense, reflects the application of generally accepted accounting principles to
acquisitions by UAM of investment management firms in transactions accounted for
as purchases, where the principal assets acquired are the contracts which
evidence the firms' ongoing relationships with their clients.
Although the contracts acquired are typically terminable on 30 days notice,
analyses conducted by independent consultants retained by UAM to assist the
Company in allocating the purchase price among the assets acquired and the
experience of UAM's firms to date have indicated that: 1) contracts are usually
relatively long-lived; 2) the duration of contracts can be reasonably estimated;
and 3) the value of the cost assigned to contracts acquired can be estimated
based on the present value of its projected income stream.
The cost assigned to contracts acquired is amortized on a straight-line
basis over the estimated weighted average useful life of the contracts of
individual firms acquired. These lives are estimated through statistical
analysis of historical patterns of terminations for each firm or similar firms
and the size and age of the contracts acquired as of the acquisition date.
Since actual terminations can differ from the statistical patterns
developed, the Company updates the lifing analyses discussed above based on
terminations subsequent to the acquisition. If the subsequent termination
experience indicates that any of the estimates of the average remaining lives
should be shortened, the remaining cost assigned to contracts acquired will be
amortized over the shorter life commencing in the year in which the new estimate
is determined. The results of the most recent reevaluations of estimated
remaining lives had no material effect on the Company's financial position or
results of operations.
Cost assigned to contracts acquired is amortized as an operating expense.
It does not, however, require the use of cash and therefore, management believes
that it is important to distinguish this expense from other operating expenses
in order to evaluate the performance of the Company. Amortization of cost
assigned to contracts acquired per share referred to below has been calculated
by dividing total amortization by the same number of shares used in the fully
diluted earnings per share calculation.
For purposes of this discussion, "Operating Cash Flow" is defined as net
income plus amortization and depreciation, as reflected in the Company's
Condensed Consolidated Statement of Cash Flows. Management uses Operating Cash
Flow not to the exclusion of net income, but rather as an additional important
measure of the Company's performance.
F-5
<PAGE>
UNITED ASSET MANAGEMENT CORPORATION
OPERATING RESULTS
NINE MONTHS ENDED SEPTEMBER 30, 1994
COMPARED TO
NINE MONTHS ENDED SEPTEMBER 30, 1993
The 1993 results of operations have been restated to reflect the 1993
acquisition of Murray Johnstone Limited, which has been accounted for as a
pooling of interests transaction.
Revenues increased 7% to $355,787,000 for the nine months ended
September 30, 1994 from $331,087,000 for the first nine months of 1993, due to
several factors. The revenues of Pell, Rudman & Co., Inc., GSB Investment
Management, Inc., Dwight Asset Management Company and Suffolk Capital
Management, acquired March 29, 1993, December 29, 1993, January 4, 1994 and July
14, 1994, respectively, were included since their acquisition dates. The
revenues of Investment Research Company, acquired February 25, 1994 in a
transaction accounted for as a pooling of interests, are included retroactive to
January 1, 1994. Portfolio performance since September 30, 1993 also
contributed slightly to assets under management and thus, higher fee revenues.
Compensation and related expenses together with other operating expenses
increased 7% from $214,646,000 to $229,642,000 for the nine months ended
September 30, 1994. This increase reflects the activity described above as well
as higher compensation earned at existing affiliates under revenue sharing
agreements. The amortization of cost assigned to contracts acquired increased
11% to $40,200,000 from $36,157,000 primarily as a result of the acquisitions
described above.
Income before income tax expense increased 12% to $76,917,000 from
$68,453,000, reflecting the net result of the circumstances described above as
well as a reduction in interest expense due to a decrease in the average debt
outstanding. The Company's estimated annual effective tax rate is 43% and 44%
for the nine months ended September 30, 1994 and 1993, respectively.
Net income increased 14% to $43,954,000 from $38,536,000 for the same
period in 1993. Again, this increase reflects the net result of the
circumstances described above. Fully diluted earnings per share increased 13%
to $1.48 from $1.31, reflecting the higher net income together with the effect
of the Company's lower common stock price, partially offset by the impact of the
issuance of shares of common stock, warrants and stock options on the
calculation of earnings per share under the modified treasury stock method.
Amortization of cost assigned to contracts acquired on a per share basis
increased to $1.35 from $1.23 primarily as a result of the purchase acquisitions
described above.
THREE MONTHS ENDED SEPTEMBER 30, 1994
COMPARED TO
THREE MONTHS ENDED SEPTEMBER 30, 1993
The 1993 results of operations have been restated to reflect the 1993
acquisition of Murray Johnstone Limited, which has been accounted for as a
pooling of interests transaction.
Revenues increased 7% to $118,922,000 in the three months ended
September 30, 1994, from $111,402,000 for the third quarter of 1993, due to
several factors. The revenues of GSB Investment Management, Inc., Dwight Asset
Management Company and Suffolk Capital Management, acquired December 29, 1993,
January 4, 1994 and July 14, 1994, respectively, have been included since their
acquisition dates. In addition, the revenues of Investment Research Company,
acquired February 25, 1994 in a transaction accounted for as a pooling of
interests, have been included for the third quarter of 1994. The portfolio
performance since the third quarter of 1993 also added slightly to assets under
management and higher revenues.
F-6
<PAGE>
Compensation and related expenses together with other operating expenses
increased 8% to $76,716,000 from $71,220,000 primarily reflecting the activity
described above and higher compensation earned at existing affiliates. The
amortization of cost assigned to contracts acquired increased 12% to $13,551,000
from $12,095,000 as a result of the purchase acquisitions discussed above.
Income before income tax expense increased 5% to $25,752,000 from
$24,512,000, reflecting the net result of the circumstances described above as
well as a reduction in interest expense due to a decrease in the average debt
outstanding. The Company's estimated annual effective tax rate is approximately
43% and 45% for the three months ended September 30, 1994 and 1993,
respectively. The quarter ended September 30, 1993 included the required
retroactive application back to January 1, 1993 of the increase in Federal tax
rates.
Net income increased 10% to $14,756,000 from $13,461,000 again reflecting
the net result of the circumstances described above. Fully diluted earnings per
share increased 11% to $0.50 for the third quarter of 1994 from $0.45 in the
third quarter of 1993, reflecting the higher net income coupled with the effect
of the Company's lower common stock price, partially offset by the impact of the
issuance of shares of common stock, warrants and stock options on the
calculation of earnings per share under the modified treasury stock method.
Amortization of cost assigned to contracts acquired on a per share basis
increased to $0.46 from $0.41 primarily as a result of the purchase acquisitions
described above.
CHANGES IN FINANCIAL CONDITION AND LIQUIDITY
The Company generated $88,306,000 and $29,776,000 in Operating Cash Flow
(net income plus amortization and depreciation) for the nine and three-month
periods ended September 30, 1994, respectively. The primary use of this
Operating Cash Flow was to pay down a portion of the borrowings under the
Company's revolving credit facility, to fund the cash portions of acquisitions,
to pay dividends to shareholders and to repurchase shares of the Company's
common stock. Effective August 29, 1994, the company amended and restated its
reducing credit agreement whereby the commitments increased from $225,000,000 to
$400,000,000. There was $41,000,000 in borrowings outstanding under the
Company's $400,000,000 revolving credit facility at September 30, 1994.
The Company expects to use Operating Cash Flow together with funds borrowed
from banks under the revolving credit facility referred to above and other
Company securities to 1) fund possible future acquisitions of institutional
investment management firms, 2) pay dividends and 3) repurchase shares of the
Company's common stock. Whether the Company ultimately completes any such
additional acquisitions or the timing of such acquisitions is not certain.
Management believes that the Company's existing capital, together with its
Operating Cash Flow and borrowings available under its revolving line of credit,
will provide the Company with sufficient resources to meet its present and
reasonably foreseeable future cash needs.
F-7
<PAGE>
UNITED ASSET MANAGEMENT CORPORATION
Exhibit 11
CALCULATION OF EARNINGS PER SHARE
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- -------------------
1994 1993(1) 1994 1993(1)
---- ---- ---- ----
<S> <C> <C> <C> <C>
Common and common equivalent shares:
Net income............................. $14,756 $13,461 $43,954 $38,536
Adjustments thereto (2)................ -- -- -- --
------- ------- ------- -------
Adjusted net income.................... $14,756 $13,461 $43,954 $38,536
------- ------- ------- -------
------- ------- ------- -------
Average shares outstanding............. 28,060 26,477 28,082 25,922
Adjustments thereto (3)................ 1,494 2,974 1,516 2,743
------- ------- ------- -------
Shares used in computation............. 29,554 29,451 29,598 28,665
------- ------- ------- -------
------- ------- ------- -------
Per Share................................ $ 0.50 $ 0.46 $ 1.49 $ 1.34
------- ------- ------- -------
------- ------- ------- -------
Common shares -- assuming full dilution:
Net income............................. $14,756 $13,461 $43,954 $38,536
Adjustments thereto (2)................ -- -- -- --
------- ------- ------- -------
Adjusted net income.................... $14,756 $13,461 $43,954 $38,536
------- ------- ------- -------
------- ------- ------- -------
Average shares outstanding............. 28,060 26,477 28,082 25,922
Adjustments thereto (3)................ 1,572 3,163 1,647 3,567
------- ------- ------- -------
Shares used in computation............. 29,632 29,640 29,729 29,489
------- ------- ------- -------
------- ------- ------- -------
Per Share................................ $ 0.50 $ 0.45 $ 1.48 $ 1.31
------- ------- ------- -------
------- ------- ------- -------
<FN>
- -------------------------
(1) Restated due to a pooling of interests transaction completed in the fourth
quarter of 1993.
(2) The proceeds from the exercise of stock options and warrants in accordance
with the modified treasury stock method are first used to buy back up to
20% of the Company's common stock at the average price for the period in
the primary calculation and at the higher of the average or closing price
in the fully diluted calculation. Any remaining proceeds are used to
retire debt, and this adjusts income for interest assumed to be saved net
of income tax from the use of such proceeds.
(3) Adjusts shares for stock options and warrants under the modified treasury
stock method and contingently issuable shares based on the probability of
issuance, after adjusting for the stock assumed repurchased in accordance
with (2) above.
</TABLE>
F-8
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT
among
UNITED ASSET MANAGEMENT CORPORATION
The Several Banks and other
Financial Institutions
from time to time parties hereto
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent
and
THE FIRST NATIONAL BANK OF BOSTON, as Collateral Agent
Dated as of August 29, 1994
<PAGE>
TABLE OF CONTENTS
PAGE
SECTION I. DEFINITIONS AND ACCOUNTING TERMS. . . . . . . . . . . . . . . 2
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Accounting Terms and Determinations. . . . . . . . . . . . . . . 17
1.3 Other Definitional Terms. . . . . . . . . . . . . . . . . . . . . 18
SECTION II AMOUNTS AND TERMS OF LOANS. . . . . . . . . . . . . . . . . . 18
2.1 Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.2 Notice of Borrowing. . . . . . . . . . . . . . . . . . . . . . . . 19
2.3 Disbursement of Funds. . . . . . . . . . . . . . . . . . . . . . . 19
2.4 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.5 Interest.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.6 Interest Periods. . . . . . . . . . . . . . . . . . . . . . . . . 22
2.7 Repayment of Loans. . . . . . . . . . . . . . . . . . . . . . . . 23
2.8 Voluntary Termination or Reduction and Mandatory Reduction of
Total Commitment.. . . . . . . . . . . . . . . . . . . . . . . . . 23
2.9 Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.10 Fees.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.11 Payments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.12 Interest Rate Not Ascertainable, Etc. . . . . . . . . . . . . . . 25
2.13 Illegality.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.14 Increased Costs; Capital Adequacy; Regulation D Compensation.. . . 27
2.15 Change of Lending Office. . . . . . . . . . . . . . . . . . . . . 30
2.16 Funding Losses. . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.17 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . 31
2.18 Certain Adjustments. . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION III REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . 32
3.1 Organization and Qualification. . . . . . . . . . . . . . . . . . 32
3.2 Corporate Authority. . . . . . . . . . . . . . . . . . . . . . . 32
3.3 Valid Obligations. . . . . . . . . . . . . . . . . . . . . . . . 33
3.4 Governmental Approvals. . . . . . . . . . . . . . . . . . . . . . 33
3.5 Title to Properties; Absence of Encumbrances. . . . . . . . . . . 33
3.6 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . 33
3.7 Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.8 Events of Default. . . . . . . . . . . . . . . . . . . . . . . . 34
3.9 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.10 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.11 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . 34
3.12 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.13 Compliance with ERISA. . . . . . . . . . . . . . . . . . . . . . 35
i
<PAGE>
3.14 Securities and Exchange Commission Registrations and Filings,
Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.15 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.16 Pledge Agreement and Security Agreement. . . . . . . . . . . . . . 36
3.17 Revenue Sharing Agreements. . . . . . . . . . . . . . . . . . . . 37
3.18 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . 37
3.19 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION IV CONDITIONS OF LOANS . . . . . . . . . . . . . . . . . . . . . 38
4.1 Conditions Precedent to Effectiveness and to Initial Loans . . . . 38
4.2 Conditions Precedent to Each Loan. . . . . . . . . . . . . . . . 40
SECTION V COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.1 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . 41
5.2 Conduct of Business. . . . . . . . . . . . . . . . . . . . . . . 43
5.3 Maintenance of Insurance. . . . . . . . . . . . . . . . . . . . . 44
5.4 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.5 Inspection by the Banks. . . . . . . . . . . . . . . . . . . . . 44
5.6 Maintenance of Books and Records. . . . . . . . . . . . . . . . . 44
5.7 Current Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.8 Cash Flow Ratios.. . . . . . . . . . . . . . . . . . . . . . . . . 45
5.9 Consolidated Net Worth. . . . . . . . . . . . . . . . . . . . . . 45
5.10 Consolidated Liabilities for Borrowed Money to Consolidated Net
Worth Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.11 Senior Indebtedness to Capital Funds. . . . . . . . . . . . . . . 45
5.12 Limitations on Indebtedness. . . . . . . . . . . . . . . . . . . 46
5.13 Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.14 Restriction on Encumbrances. . . . . . . . . . . . . . . . . . . 49
5.15 Merger; Consolidation; Sale or Lease of Assets . . . . . . . . . . 50
5.16 Additional Stock Issuance. . . . . . . . . . . . . . . . . . . . 50
5.17 Investments, Loans. . . . . . . . . . . . . . . . . . . . . . . . 51
5.18 Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.19 Notification of Default. . . . . . . . . . . . . . . . . . . . . 52
5.20 Notification of Material Litigation; Material Adverse Change. . . 52
5.21 Change in Terms and Prepayment of Subordinated Indebtedness. . . 52
5.22 Pledged Collateral. . . . . . . . . . . . . . . . . . . . . . . . 52
5.23 Restricted Payments. . . . . . . . . . . . . . . . . . . . . . . 55
5.24 Contingent Payments. . . . . . . . . . . . . . . . . . . . . . . 56
5.25 Transactions with Affiliates. . . . . . . . . . . . . . . . . . . 56
5.26 Revenue Sharing Agreements. . . . . . . . . . . . . . . . . . . . 56
5.27 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . 56
5.28 Investment in Aldrich, Eastman & Waltch, L.P. . . . . . . . . . . 56
ii
<PAGE>
SECTION VI DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.1 Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.2 Remedies on Default. . . . . . . . . . . . . . . . . . . . . . . 59
6.3 Money Market Loans. . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION VII THE AGENTS. . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.1 Appointment of Agents. . . . . . . . . . . . . . . . . . . . . . 61
7.2 Nature of Duties of Agents. . . . . . . . . . . . . . . . . . . . 61
7.3 Lack of Reliance on the Agents.. . . . . . . . . . . . . . . . . . 61
7.4 Certain Rights of the Agents. . . . . . . . . . . . . . . . . . . 62
7.5 Reliance by Agents. . . . . . . . . . . . . . . . . . . . . . . . 63
7.6 Indemnification of Agents. . . . . . . . . . . . . . . . . . . . 63
7.7 Each Agent in its Individual Capacity. . . . . . . . . . . . . . 63
7.8 Holders of Notes. . . . . . . . . . . . . . . . . . . . . . . . . 64
7.9 Successor Agents.. . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 64
8.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.2 Expenses and Indemnity. . . . . . . . . . . . . . . . . . . . . . 65
8.3 Set-Off. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.4 Application of Set-Offs. . . . . . . . . . . . . . . . . . . . . 67
8.5 Term of Agreement. . . . . . . . . . . . . . . . . . . . . . . . 68
8.6 Consents, Amendments, Waivers, etc. . . . . . . . . . . . . . . . 68
8.7 Benefit of Agreement.. . . . . . . . . . . . . . . . . . . . . . . 69
8.8 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
8.9 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . 71
8.10 Jurisdiction. . . . . . . . . . . . . . . . . . . . . . . . . . . 71
8.11 No Third Party Rights. . . . . . . . . . . . . . . . . . . . . . 71
8.12 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . 71
8.13 Partial Invalidity. . . . . . . . . . . . . . . . . . . . . . . . 71
8.14 Table of Contents and Captions. . . . . . . . . . . . . . . . . . 71
8.15 Effectiveness. . . . . . . . . . . . . . . . . . . . . . . . . . 71
8.16 Pledged Stock. . . . . . . . . . . . . . . . . . . . . . . . . . 72
8.17 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . 72
8.18 Withholding Tax Exemption. . . . . . . . . . . . . . . . . . . . . 72
8.19 WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . 74
iii
<PAGE>
Page
----
EXHIBITS: A. . . . . . . . . Commitments
B. . . . . . . . . Form of Confirmation and Amendment
C. . . . . . . . . Agreements Providing for Contingent Payments
D. . . . . . . . . Heitman Permitted Indebtedness and Encumbrances
E. . . . . . . . . Form of Note
F. . . . . . . . . Subordinated Indebtedness
G. . . . . . . . . Form of Subordination Agreement/Subordinated Note
H. . . . . . . . . Form of Notice of Borrowing
I. . . . . . . . . Encumbrances
J. . . . . . . . . Litigation
K. . . . . . . . . Subsidiaries
L. . . . . . . . . Subscription Rights, Warrants, etc.
M-1. . . . . . . . Opinion of Hill & Barlow
M-2. . . . . . . . Opinion of Wildman, Harrold, Allen & Dixon
N. . . . . . . . . Revenue and Contract Amortization History
O. . . . . . . . . Indebtedness
iv
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 29, 1994, by
and among UNITED ASSET MANAGEMENT CORPORATION, a Delaware corporation (the
"Company"), having its chief executive office at One International Place,
100 Oliver Street, Boston, Massachusetts 02110, the several banks and other
financial institutions from time to time parties to this Agreement (the
"Banks"), MORGAN GUARANTY TRUST COMPANY OF NEW YORK, a New York banking
corporation, as agent for the Banks (in such capacity, the "Agent") and THE
FIRST NATIONAL BANK OF BOSTON, a national banking association, as collateral
agent for the Banks (in such capacity, the "Collateral Agent", and together with
the Agent, the "Agents"). All capitalized terms used herein and defined in
Section 1.1 are used herein as so defined.
R E C I T A L S
(A) The Company, the banks parties thereto (the "Existing
Banks"), the Agent, as agent for the Existing Banks, and the Collateral Agent,
as collateral agent for the Existing Banks, are parties to that certain Credit
Agreement, dated as of May 18, 1992 (as heretofore amended and supplemented, the
"Original Credit Agreement"), pursuant to which such Banks have agreed to make
certain loans to the Company from time to time upon the terms and subject to the
conditions therein set forth.
(B) The Company has requested that the aggregate amount of the
"Commitments" under the Original Credit Agreement be increased from $225,000,000
to $400,000,000.
(C) Each of Fleet Bank of Massachusetts, BayBank Boston, N.A. and
Wachovia Bank of Georgia, N.A. desires to become a party to the Original Credit
Agreement (as amended and restated hereby) as a "Bank".
(D) The parties hereto desire to make certain other amendments to
the Original Credit Agreement, as more particularly set forth herein.
(E) For convenience of reference, the Company, the Banks, the
Agent and the Collateral Agent desire to amend and restate the Original Credit
Agreement in its entirety.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and
<PAGE>
sufficiency of which are hereby acknowledged, the parties hereto agree that the
Original Credit Agreement is hereby amended and restated to read in its entirety
as follows:
SECTION I.
DEFINITIONS AND ACCOUNTING TERMS
2. DEFINITIONS. In addition to the terms defined above, capitalized terms used
in this Agreement or in the Notes or in any certificate, report or other
document made or delivered pursuant to this Agreement shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
AFFILIATE. Of any Person means any other Person (i) directly or indirectly
controlling, controlled by, or under common control with, such Person,
whether through the ownership of voting securities, by contract or
otherwise, (ii) which directly or indirectly beneficially owns or holds 5%
or more of any class of voting stock of the Company or any of its
Subsidiaries, (iii) 5% or more of any class of the voting stock of which is
directly or indirectly owned or held by the Company or any of its
Subsidiaries or (iv) which is a partnership in which the Company or any of
its Subsidiaries is a general partner.
AGREEMENT. This Agreement, including all schedules and exhibits hereto, as
the same may be amended, supplemented or otherwise modified from time to
time.
AMORTIZATION AMOUNT. The meaning assigned to such term in Section 5.11.
APPLICABLE CD RATE MARGIN. For any day during any fiscal quarter, the
percentage indicated below opposite the applicable Level as at the last day
of the second preceding fiscal quarter of the Company:
<TABLE>
<CAPTION>
Applicable CD Rate
Margin from the
Closing Date through Applicable CD Rate
and including the Margin after
Level Conversion Date Conversion Date
----- --------------------- -------------------
<S> <C> <C>
1 .875% 1.125%
2 1.000% 1.250%
3 1.125% 1.375%
4 1.375% 1.625%
</TABLE>
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<PAGE>
APPLICABLE COMMITMENT FEE RATE. For any day during any fiscal quarter of
the Company, the percentage indicated below opposite the applicable Level
as at the last day of the second preceding fiscal quarter of the Company:
<TABLE>
<CAPTION>
Applicable Commitment
Level Fee Rate
----- ---------------------
<S> <C>
1 .25%
2 .30%
3 .35%
4 .50%
</TABLE>
APPLICABLE EURODOLLAR RATE MARGIN. For any day during any fiscal quarter of
the Company, the percentage indicated below opposite the applicable Level
as at the last day of the second preceding fiscal quarter of the Company:
<TABLE>
<CAPTION>
Applicable Eurodollar
Rate Margin from the
Closing Date through Applicable Eurodollar
and including the Rate Margin after
Level Conversion Date the Conversion Date
----- -------------------- ---------------------
<S> <C> <C>
1 .750% 1.000%
2 .875% 1.125%
3 1.000% 1.250%
4 1.250% 1.500%
</TABLE>
ASSESSMENT RATE. For any Interest Period, the net annual assessment rate
(rounded upward, if necessary, to the next higher 1/100 of 1%) actually
incurred by Morgan to the Federal Deposit Insurance Corporation (or any
successor) for such Corporation's (or such successor's) insuring time
deposits at offices of Morgan in the United States during the most recent
period for which such rate has been determined prior to the commencement of
such Interest Period.
ASSIGNMENT OF PARTNERSHIP INTEREST. The Pledge and Assignment of Limited
Partnership Interests, dated as of May 18, 1992, made by UAM Realty
Advisors to the Collateral Agent, as the same may be amended, supplemented
or otherwise modified from time to time.
BAILEE NOTICE. The meaning assigned to such term in Section 3.16(a).
BANKRUPTCY CODE. Title 11 of the United States Code entitled "Bankruptcy",
as now or hereafter in effect, or any successor thereto.
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<PAGE>
BASE RATE. For any day, a rate per annum equal to the greater of (a) the
Prime Lending Rate in effect on such day or (b) one-half of one percent
(1/2%) per annum in excess of the Federal Funds Effective Rate in effect on
such date. For purposes of this Agreement, any change in the Base Rate due
to a change in the Prime Lending Rate shall be effective on the date such
change in the Prime Lending Rate is announced, and any change in the Base
Rate due to a change in the Federal Funds Effective Rate shall be effective
on the effective date of such change in the Federal Funds Effective Rate.
If for any reason Morgan shall have determined (which determination shall
be conclusive absent manifest error) that it is unable to ascertain for any
day the Federal Funds Effective Rate for any reason, including, without
limitation, the inability or failure of Morgan to obtain sufficient bids or
publications in accordance with the terms hereof, the Base Rate shall be
the Prime Lending Rate until the circumstances giving rise to such
inability no longer exist.
BASE RATE LOAN. Any Loan bearing interest at the rate provided in Section
2.5(a).
BKB. The First National Bank of Boston, a national banking association.
BORROWED MONEY. Indebtedness incurred by any Person for borrowed money,
whether secured or unsecured, senior or subordinated.
BORROWING. Each borrowing pursuant to a Notice of Borrowing consisting of
the same Type of Loans having the same Interest Period (except as otherwise
provided in Sections 2.13 and 2.14) made by all of the Banks concurrently.
BUSINESS DAY. (i) For all purposes other than as covered by clause (ii)
below, any day on which banks are not authorized or required to close in
Boston, Massachusetts or New York, New York and (ii) with respect to all
notices and determinations in connection with, and payments of principal
and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) and which is also a day for trading by and between
banks in Dollar deposits in the applicable interbank Eurodollar market.
CAPITAL FUNDS. Consolidated Net Worth plus (i) Subordinated Indebtedness
outstanding on the Closing Date and (ii) Subordinated Indebtedness created
after the Closing Date no portion of the principal of which
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<PAGE>
is due and payable by the Company prior to a date 180 days following the
Termination Date.
CASH FLOW. For any period of determination, all amounts that should, in
accordance with GAAP, be included as income from operations before interest
expense and taxes and before amortization of original issue discount, debt
issue expense and value of acquired contracts, PLUS depreciation of real
and personal property and leasehold improvements.
CD BASE RATE. With respect to each Interest Period, the rate of interest
determined by the Agent to be the average (rounded upward, if necessary, to
the next higher 1/100 of 1%) of the prevailing rates per annum bid at 10:00
A.M. (New York City time) (or as soon thereafter as practicable) on the
first day of such Interest Period by two or more New York certificate of
deposit dealers of recognized standing for the purchase at face value from
each Reference Bank of its certificates of deposit in an amount comparable
to the principal amount of the CD Rate Loan of such Reference Bank to which
such Interest Period applies and having a maturity comparable to such
Interest Period.
CD RATE LOAN. Any Loan bearing interest at the rate provided in Section
2.5(b).
CLOSING DATE. August 29, 1994.
CODE. The Internal Revenue Code of 1986 and the rules and regulations
thereunder, collectively, as now or hereafter in effect, or any successor
thereto.
COLLATERAL. Collectively, (a) the "Collateral" as such term is defined in
each of the Pledge Agreement, the Subsidiaries Pledge Agreement, the
Security Agreement, the Subsidiaries Security Agreement, the DSI Pledge
Agreement, the Heitman Pledge Agreement, the UAM U.K. Holdings Pledge
Agreement and the Assignment of Partnership Interest, and (b) to the extent
not otherwise included in clause (a) above, and subject to the provisions
of Section 5.22(c), all capital stock of any Subsidiary, hereafter created
or acquired by the Company or by any Subsidiary of the Company.
COMMITMENT. The meaning assigned to such term in Section 2.1(b).
COMMITMENT AMOUNT. For each Bank, the amount set forth opposite such Bank's
name on Exhibit A hereto, as such amount may be reduced as provided in
Section 2.8 or
-5-
<PAGE>
adjusted to reflect assignments pursuant to Section 8.7.
COMMITMENT PERCENTAGE. For each Bank, the percentage set forth opposite
such Bank's name on Exhibit A hereto, as adjusted to reflect assignments
pursuant to Section 8.7.
CONFIRMATION AND AMENDMENT. The Guaranty and Security Documents
Confirmation and Amendment, dated as of the date hereof, among the Company,
the Guaranty Subsidiaries, the Banks and the Agents, substantially in the
form of Exhibit B hereto, as the same may be amended, supplemented or
otherwise modified from time to time.
CONSOLIDATED CASH FLOW. For any period of determination, Cash Flow of the
Company and its Subsidiaries determined on a consolidated basis.
CONSOLIDATED DEBT SERVICE. At any date, (a) all amounts that should in
accordance with GAAP be included, on a consolidated basis, as (i) payments
of principal on Indebtedness scheduled to arise during the four (4)
complete consecutive calendar quarters commencing with the quarter during
which such date of determination arises and including the three (3)
succeeding quarters and (ii) payments of interest due during the period
consisting of the four (4) complete consecutive calendar quarters
immediately preceding such date of determination, (including, for purposes
of clause (i) and (ii) above, the Loans but excluding payments of principal
on the Loans required to be made at the end of an Interest Period if
amounts at least equal to such payments will be available (such prospective
availability to be determined as of the date Consolidated Cash Flow is
determined) to be simultaneously re-borrowed by the Company pursuant to the
Commitments) PLUS (b) the aggregate of all amounts declared or paid
(without duplication) as dividends on the capital stock of the Company
during the period of four (4) complete calendar quarters immediately
preceding such date of determination.
CONSOLIDATED NET WORTH. At any date the consolidated stockholders' equity
of the Company and its Subsidiaries less their consolidated Intangible
Assets, all determined as of such date. For purposes of this definition
"Intangible Assets" means the amount (to the extent reflected in
determining such consolidated stockholders' equity) of (i) all write-ups
(other than write-ups resulting from foreign currency translations and
write-ups of assets of a going concern business
-6-
<PAGE>
made within twelve months after the acquisition of such business)
subsequent to December 31, 1993 in the book value of any asset owned by the
Company or a Subsidiary, (ii) all investments in unconsolidated
Subsidiaries and all equity investments in Persons which are not
Subsidiaries and (iii) all unamortized debt discount and expense,
unamortized deferred charges, goodwill, trademarks, service marks, trade
names, anticipated future benefit of tax loss carry-forwards, copyrights,
organization or developmental expenses and other intangible assets;
PROVIDED, HOWEVER, that Consolidated Net Worth shall include the net book
value of investment advisory contracts acquired.
CONTINGENT PAYMENTS. Those amounts required to be paid in cash by the
Company under existing or future agreements among the Company, any of its
Subsidiaries and selling stockholders of any such Subsidiaries relating to
the payment of additional purchase price for Subsidiaries contingent upon
future operating performance of such Subsidiaries, including, without
limitation, under the agreements set forth on Exhibit C hereto.
CONTROLLED GROUP. All members of a controlled group of corporations and all
trades or businesses (whether or not incorporated) under common control
which, together with the Company, are treated as a single employer under
Section 414(b) or 414(c) of the Code.
CONVERSION DATE. August 29, 1996 as such date may be amended from time to
time.
CREDIT LYONNAIS. Collectively, Credit Lyonnais New York Branch, a branch
duly licensed under the laws of the State of New York of Credit Lyonnais, a
banking corporation organized and existing under the laws of the Republic
of France, with respect to Base Rate Loans and CD Rate Loans, and Credit
Lyonnais Cayman Island Branch, a branch duly licensed under the laws of the
Cayman Islands of Credit Lyonnais, a banking corporation organized and
existing under the laws of the Republic of France, with respect to
Eurodollar Loans.
DEFAULT. Any event or condition which, with notice or lapse of time, or
both, would constitute an Event of Default.
DEUTSCHE BANK. Collectively, Deutsche Bank AG, New York Branch, a branch
duly licensed under the laws of the State of New York of Deutsche Bank AG,
a banking
-7-
<PAGE>
corporation organized and existing under the laws of the Republic of
Germany, with respect to Base Rate Loans and CD Rate Loans, and Deutsche
Bank AG, Cayman Islands Branch, a branch duly licensed under the laws of
the Cayman Islands of Deutsche Bank AG, a banking corporation organized and
existing under the laws of the Republic of Germany, with respect to
Eurodollar Loans.
DOLLAR AND THE SIGN "$". Lawful money of the United States of America.
DOMESTIC RESERVE PERCENTAGE. For any day, that percentage (expressed as a
decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including without limitation any basic,
supplemental or emergency reserves) for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion
dollars in respect of new non-personal time deposits in dollars in New York
City having a maturity comparable to the related Interest Period and in an
amount of $100,000 or more. The Fixed CD Rate shall be adjusted
automatically on and as of the effective date of any change in the Domestic
Reserve Percentage.
DSI. Dewey Square Investors Corporation, a Delaware corporation and a
Subsidiary of UAM Holdings.
DSI GUARANTY. The DSI Guaranty, dated as of May 18, 1992, made by DSI in
favor of the Beneficiaries named therein, as the same may be amended,
supplemented or otherwise modified from time to time.
DSI PLEDGE AGREEMENT. The DSI Pledge Agreement dated as of May 18, 1992
made by DSI in favor of the Collateral Agent, for the ratable benefit of
the Banks, as the same may be amended, supplemented or otherwise modified
from time to time.
EACH AGENT. The Agent or the Collateral Agent.
ENCUMBRANCES. Any mortgage, pledge, security interest, lien or other charge
or encumbrance, including the lien or retained security title of a
conditional vendor.
ERISA. The Employee Retirement Income Security Act of 1974 and the rules
and regulations thereunder, collectively, as now or hereafter in effect, or
any successor thereto.
-8-
<PAGE>
EURODOLLAR LOAN. Any Loan bearing interest at the rate provided in Section
2.5(c).
EURODOLLAR RESERVE PERCENTAGE. For any day, that percentage (expressed as a
decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement for a member bank of the Federal Reserve
System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category
of liabilities which includes deposits by reference to which the interest
rate on Eurodollar Loans is determined or any category of extensions of
credit or other assets which includes loans by a non-United States office
of any Bank to United States residents).
EXCHANGE ACT. Securities Exchange Act of 1934, as now or hereafter in
effect, or any successor thereto.
EXISTING BANKS. The meaning given to such term in the Recitals hereto.
EVENT OF DEFAULT. The meaning given to such term in Section 6.1.
FEDERAL FUNDS EFFECTIVE RATE. For any day, the rate per annum (rounded
upward, if necessary, to the next higher 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day, PROVIDED that (i) if such day is not
a Business Day, the Federal Funds Effective Rate for such day shall be such
rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if no such rate is
so published on such next succeeding Business Day, the Federal Funds
Effective Rate for such day shall be the average rate quoted to Morgan on
such day on such transactions as determined by the Agent.
FIXED CD RATE. With respect to each Interest Period, a rate per annum
determined pursuant to the following formula:
[ CDBR ]*
FCDR = [ ---------- ] + AR
[ 1.00 - DRP ].
FCDR = Fixed CD Rate
-9-
<PAGE>
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
_________
* The amount in brackets being rounded upward, if necessary, to the
next higher 1/100 of 1%
FIXED RATE LOAN. Any Loan made to the Company by the Banks as a CD Rate
Loan or Eurodollar Loan.
GAAP. Generally accepted accounting principles in the United States of
America in effect from time to time.
GUARANTEES. All guarantees, endorsements or other contingent or surety
obligations with respect to Indebtedness of others, whether or not
reflected on the balance sheet of a Person, including any obligation to
furnish funds, directly or indirectly (whether by virtue of partnership
arrangements, by agreement to keep-well or otherwise), through the purchase
of goods, supplies, services or by way of stock purchase, capital
contribution, advance or loan or otherwise, or to enter into a contract for
any of the foregoing, for the purpose of providing financial support to any
other Person.
GUARANTY SUBSIDIARIES. Collectively, UAM Holdings, UAM Trademark, UAM
Investment, DSI, Heitman, UAM U.K. Holdings and UAM Realty Advisors.
HEITMAN. Heitman Financial Ltd., an Illinois corporation and a Subsidiary
of the Company.
HEITMAN PERMITTED INDEBTEDNESS. The Indebtedness of Heitman and its
Subsidiaries set forth on Exhibit D hereto.
HEITMAN GUARANTY. The Heitman Guaranty, dated as of August 25, 1993, made
by Heitman in favor of the Beneficiaries named therein, as the same may be
amended, supplemented or otherwise modified from time to time.
HEITMAN PLEDGE AGREEMENT. The Heitman Pledge Agreement, dated as of August
25, 1993, made by Heitman in favor of the Collateral Agent, for the ratable
benefit of the Banks, as the same may be amended, supplemented or otherwise
modified from time to time.
INDEBTEDNESS. As applied to any Person, without duplication, (i) all
obligations for Borrowed Money or other extensions of credit, whether or
not secured,
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(ii) obligations representing the deferred purchase price of property or
services other than Contingent Payments, (iii) all obligations evidenced by
bonds, notes, debentures or other similar instruments, (iv) all obligations
secured by any mortgage, pledge, security interest or other lien on
property owned or acquired, whether or not the obligations secured thereby
shall have been assumed, (v) all obligations as lessee under capital
leases, (vi) all Unfunded Vested Liabilities, (vii) all Guarantees, and
(viii) all contingent reimbursement obligations under or in respect of
undrawn letters of credit.
INTEREST EXPENSE. For any period, interest expense for such period as
determined on a consolidated basis for the Company and its Subsidiaries.
INTEREST PERIOD. The meaning given to such term in Section 2.6.
INVESTMENT ADVISERS ACT. Investment Advisers Act of 1940, as now or
hereafter in effect, or any successor thereto.
INVESTMENT AGREEMENT. The Investment Agreement, dated as of March 20, 1991,
by and among the Company, UAM Realty Advisors, Aldrich, Eastman & Waltch,
Inc. and certain stockholders of Aldrich, Eastman & Waltch, Inc.
LENDING OFFICE. For each Bank the office specified opposite such Bank's
name on the signature pages hereof with respect to each Type of Loan, or
such other office as such Bank may designate in writing from time to time
to the Company and the Agent with respect to such Type of Loan.
LEVEL. Level 1, Level 2, Level 3 or Level 4. The determination of the
applicable Level as at the last day of any fiscal quarter of the Company
shall be based upon the certificate (on which the Agent may rely) of the
chief financial officer of the Company furnished to the Banks pursuant to
Section 5.1(d) in respect of such fiscal quarter. In the event that the
Company shall have failed to timely furnish the financial statements and
reports required by subsections (a), (b) or (d) of Section 5.1, the
applicable Level shall be Level 4 until such financial statements and
reports shall have been so furnished.
LEVEL 1. At any date of determination thereof, (i) Consolidated Cash Flow
for the period of four consecutive fiscal quarters ended on such date is
more than 600% of Interest Expense for such period AND (ii)
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the ratio of (A) consolidated liabilities for Borrowed Money of the Company
and its Subsidiaries to (B) Total Capital is less than 0.5:1.0.
LEVEL 2. At any date of determination thereof, (i) Consolidated Cash Flow
for the period of four consecutive fiscal quarters ended on such date is
more than 450% of Interest Expense for such period and (ii) the ratio of
(A) consolidated liabilities for Borrowed Money of the Company and its
Subsidiaries to (B) Total Capital is less than 0.6:1.0.
LEVEL 3. At any date of determination thereof, (i) Consolidated Cash Flow
for the period of four consecutive fiscal quarters ended on such date is
more than 300% of Interest Expense for such period and (ii) the ratio of
(A) consolidated liabilities for Borrowed Money of the Company and its
Subsidiaries to (B) Total Capital is less than 0.7:1.0.
LEVEL 4. At any date of determination thereof, (i) Consolidated Cash Flow
for the period of four consecutive fiscal quarters ended on such date is
equal to or less than 300% of Interest Expense for such period and (ii) the
ratio of (A) consolidated liabilities for Borrowed Money of the Company and
its Subsidiaries to (B) Total Capital is equal to or greater than 0.7:1.0.
LOAN. Any Loan made to the Company by the Banks hereunder as a Base Rate
Loan or Fixed Rate Loan.
LOAN DOCUMENTS. Collectively, this Agreement, the Notes, the Security
Documents, the Subsidiaries Guaranty, the DSI Guaranty, the UAM Realty
Advisors Guaranty, the Heitman Guaranty, UAM U.K. Holdings Guaranty, the
Confirmation and Amendment, the Trademark Subordination Agreement and any
other instruments, documents and agreements referred to herein or related
hereto in favor of the Agents, or either of them, or the Banks.
LONDON INTERBANK OFFERED RATE. With respect to each Interest Period means
the average (rounded upward, if necessary, to the next higher 1/16 of 1%)
of the respective rates per annum at which deposits in dollars are offered
to each of the Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Business Days before the first
day of such Interest Period in an amount approximately equal to the
principal amount of the Eurodollar Loan of such Reference Bank to which
such Interest Period is to
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apply and for a period of time comparable to such Interest Period.
MONEY MARKET LOANS. Loans made by a Bank to the Company of the type
described in Section 5.12(m).
MORGAN. Morgan Guaranty Trust Company of New York, a New York banking
corporation.
MURRAY JOHNSTONE. Murray Johnstone Holdings Limited, a company incorporated
in Scotland and a Subsidiary of the Company.
NOTES. Promissory notes of the Company, each substantially in the form of
Exhibit E hereto with the blanks appropriately completed, evidencing the
obligation of the Company to each Bank to repay the Loans on the
Termination Date.
NOTICE OF BORROWING. The meaning given to such term in Section 2.2(a).
OBLIGATIONS. Any and all obligations of the Company to the Agent, the
Collateral Agent or the Banks, of every kind and description, direct or
indirect, absolute or contingent, primary or secondary, due or to become
due, arising under or in connection with this Agreement, the Notes or any
of the other Loan Documents or under or in connection with any Money Market
Loan and including, without limitation, obligations to perform acts and
refrain from taking action as well as obligations to pay money, which
includes, without limitation, the Loans and the Money Market Loans.
ORIGINAL CREDIT AGREEMENT. The meaning given to such term in the Recitals
hereto.
PARENT. With respect to any Bank, any Person controlling such Bank.
PAYMENT OFFICE. The Agent's office located at 60 Wall Street, New York, New
York 10260, ABA # 021000238, for credit to: Loan Department - Syndications
Unit, Account No. 999-99-090, Attention: Syndications Unit, Reference:
United Asset Management Corporation.
PBGC. The Pension Benefit Guaranty Corporation or any entity succeeding to
any or all of its functions under ERISA.
PERMITTED BUSINESSES. The businesses of managing securities or other
portfolios (including but not limited to real estate, timber and foreign
currencies)
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and related activities, PROVIDED, HOWEVER, that the Relevant Cash Flow of
all Subsidiaries of the Company engaged primarily in the business of
managing securities shall at all times equal or exceed sixty percent (60%)
of the Relevant Cash Flow of all of the Company's Subsidiaries. For any
Subsidiary, the "Relevant Cash Flow" shall mean the greater of (i) the cash
flow of such Subsidiary for the four complete consecutive fiscal quarters
of such Subsidiary immediately preceding the acquisition (the
"Acquisition") of such Subsidiary by the Company or a Subsidiary of the
Company, and (ii) the projected cash flow (calculated, if applicable, as
the "Base UAM Distribution" as defined in the Revenue Sharing Agreement
relating to such Subsidiary) of such Subsidiary for the four complete
consecutive fiscal quarters of the Company immediately following the
Acquisition, as determined by the Company at the time of the Acquisition
and set forth in projections furnished to each Bank at least ten (10) days
prior to the consummation of such Acquisition.
PERSON. A corporation, association, partnership, trust, organization,
business, individual or government or any governmental agency or political
subdivision thereof.
PLAN. Any employee pension or other benefit plan which is subject to Title
IV of ERISA or subject to the minimum funding standards under Section 412
of the Code and is either (i) established or maintained by the Company or
any member of the Controlled Group or (ii) established or maintained
pursuant to a collective bargaining agreement or any other arrangement
under which more than one employer makes contributions and to which the
Company or any member of the Controlled Group is making or accruing an
obligation to make contributions or has within the preceding five Plan
years made contributions.
PLEDGE AGREEMENT. The Pledge Agreement, dated as of May 18, 1992, by and
between the Company and the Collateral Agent, as the same may be amended,
supplemented or otherwise modified from time to time.
PLEDGED STOCK. The shares of capital stock of Subsidiaries which are
pledged by the Company, UAM Holdings, Heitman, UAM U.K. Holdings or DSI, as
the case may be, to the Collateral Agent pursuant to the Pledge Agreement,
the Subsidiaries Pledge Agreement, the Heitman Pledge Agreement, the UAM
U.K. Holdings Pledge Agreement or the DSI Pledge Agreement, as the case may
be.
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PRIME LENDING RATE. The rate which Morgan announces from time to time as
its prime lending rate, as in effect from time to time.
RECOGNITION AGREEMENT. The Recognition Agreement, dated as of May 18, 1992,
made by Aldrich, Eastman & Waltch, L.P., AEW Holdings, L.P., Aldrich,
Eastman & Waltch, Inc. and the Agent, and consented to by the Company and
UAM Realty Advisors, as the same may be amended, supplemented or otherwise
modified from time to time.
REFERENCE BANKS. Morgan and BKB.
REGULATION D, REGULATION G, REGULATION U AND REGULATION X. Regulation D,
Regulation G, Regulation U and Regulation X, respectively, of the Board of
Governors of the Federal Reserve System as from time to time in effect and
any successor thereto.
REQUIRED BANKS. At any time, Banks holding more than 50% of the then
aggregate unpaid principal amount of all Loans or, if no such principal
amount is then outstanding, Banks having more than 50% of the Total
Commitment.
REVENUE SHARING AGREEMENTS. Agreements among the Company, any of its
Subsidiaries and Persons comprising management of any such Subsidiaries,
pursuant to which a portion of the revenues generated by such Subsidiary
are paid to the Company, as the same may be amended, supplemented or
otherwise modified from time to time.
SECURITY AGREEMENT. The Security Agreement, dated as of May 18, 1992, made
by the Company in favor of the Collateral Agent, for the ratable benefit of
the Banks, as the same may be amended, supplemented or otherwise modified
from time to time.
SECURITY DOCUMENTS. Collectively, the Security Agreement, the Subsidiaries
Security Agreement, the Pledge Agreement, the Subsidiaries Pledge
Agreement, the DSI Pledge Agreement, the Heitman Pledge Agreement, the UAM
U.K. Holdings Pledge Agreement and the Assignment of Partnership Interest.
SENIOR INDEBTEDNESS. All Indebtedness of the Company for Borrowed Money
other than Subordinated Indebtedness.
SUBORDINATED INDEBTEDNESS. The Company's (i) Indebtedness set forth on
Exhibit F hereto, and (ii) all future Indebtedness incurred by the Company
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which Indebtedness is specifically subordinated to the payment in full of
all Obligations to the Banks pursuant to documentation substantially in the
form of Exhibit G hereto or pursuant to terms and conditions satisfactory
to the Required Banks.
SUBSIDIARIES GUARANTY. The Subsidiaries Guaranty, dated as of May 18, 1992,
made by UAM Holdings, UAM Trademark and UAM Investment in favor of the
Beneficiaries named therein, as the same may be amended, supplemented or
otherwise modified from time to time.
SUBSIDIARIES PLEDGE AGREEMENT. The Subsidiaries Pledge Agreement dated as
of May 18, 1992 made by UAM Holdings in favor of the Collateral Agent, for
the ratable benefit of the Banks, as the same may be amended, supplemented
or otherwise modified from time to time.
SUBSIDIARIES SECURITY AGREEMENT. The Subsidiaries Security Agreement dated
as of May 18, 1992 made by UAM Holdings, UAM Trademark and UAM Investment
in favor of the Collateral Agent, for the ratable benefit of the Banks, as
the same may be amended, supplemented or otherwise modified from time to
time.
SUBSIDIARY. A corporation of which a majority of the outstanding shares of
stock of each class having ordinary voting power is owned by any Person, by
one or more Subsidiaries of such Person, or by such Person and one or more
of its Subsidiaries.
TERMINATION DATE. August 29, 1999.
TOTAL CAPITAL. At any date, the sum of (i) Consolidated Net Worth and (ii)
consolidated liabilities for Borrowed Money of the Company and its
Subsidiaries.
TOTAL COMMITMENT. The aggregate of the Commitment Amounts of the Banks
which shall be initially $400,000,000 and shall be reduced thereafter as
provided in Section 2.8.
TRADEMARK SUBORDINATION AGREEMENT. The Subordination Agreement dated May
18, 1992 made by the Company and UAM Trademark in favor of the Banks and
the Agents, as the same may be amended, supplemented or otherwise modified
from time to time.
TYPE. Base Rate Loan, CD Rate Loan or Eurodollar Loan.
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UAM HOLDINGS. United Asset Management Holdings, Inc., a Delaware
corporation and a Subsidiary of the Company.
UAM TRADEMARK. United Asset Management Trademark, Inc., a Delaware
corporation and a Subsidiary of the Company.
UAM INVESTMENT. UAM Investment Corporation, a Delaware corporation and a
Subsidiary of the Company.
UAM REALTY ADVISORS. UAM Realty Advisors Investment Corporation, a Delaware
corporation and a Subsidiary of UAM Holdings.
UAM REALTY ADVISORS GUARANTY. The UAM Realty Advisors Guaranty, dated as of
May 18, 1992, made by UAM Realty Advisors in favor of the Beneficiaries
named therein, as the same may be amended, supplemented or otherwise
modified from time to time.
UAM U.K. HOLDINGS. United Asset Management U.K. Holdings, Inc., a Delaware
corporation and a Subsidiary of the Company.
UAM U.K. HOLDINGS GUARANTY. The UAM U.K. Holdings Guaranty, dated as of
November 16, 1993, made by UAM U.K. Holdings in favor of the Beneficiaries
named therein, as the same may be amended, supplemented or otherwise
modified from time to time.
UAM U.K. HOLDINGS PLEDGE AGREEMENT. The UAM U.K. Holdings Pledge Agreement,
dated as of November 17, 1993, made by UAM U.K. Holdings in favor of the
Collateral Agent,for the ratable benefit of the Banks, as the same may be
amended, supplemented or otherwise modified from time to time.
UNFUNDED VESTED LIABILITIES. With respect to any Plan at any time, the
amount (if any) by which the present value of all vested benefits under
such Plan EXCEEDS the fair market value of all Plan assets allocable to
such benefits (excluding any accrued but unpaid contributions), 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 the
Company or any member of the Controlled Group to the PBGC or the Plan under
Title IV of ERISA.
2.1 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise defined or
specified herein, all accounting terms shall be construed herein, all accounting
determinations
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hereunder shall be made, all financial statements required to be delivered
hereunder shall be prepared and all financial records shall be maintained in
accordance with GAAP.
2.2 OTHER DEFINITIONAL TERMS. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and section, schedule, exhibit and like references are to this
Agreement unless otherwise specified. Any reference in this Agreement to any
statute or regulation or provision thereof shall be deemed to be a reference to
such statute, regulation or provision, as amended from time to time, and to any
successor statute, regulation or provision.
SECTION II
AMOUNTS AND TERMS OF LOANS
2.1 COMMITMENTS.
(a) Subject to and upon the terms and conditions herein set
forth, each Bank severally agrees, at any time and from time to time prior to
the Termination Date, to make Loans to the Company in an amount up to but not to
exceed its Commitment Amount in effect from time to time.
(b) The Loans made pursuant hereto by each Bank (i) shall, at the
option of the Company, be either Base Rate Loans, CD Rate Loans or Eurodollar
Loans; PROVIDED, THAT except as otherwise specifically provided herein all Loans
made pursuant to the same Borrowing shall be of the same Type and (ii) shall not
exceed in aggregate principal amount outstanding at any one time the Total
Commitment. (Each Bank's commitment to make Loans hereunder, as the same may be
reduced pursuant to Sections 2.8 and 5.12(m) and otherwise from time to time, is
herein referred to as its "Commitment".) There may be more than one Borrowing on
any day. Within the foregoing limits and subject to the conditions set out in
Section IV, the Company may borrow under this Section, repay under Section 2.7,
prepay under Section 2.9 and reborrow.
(c) The aggregate principal amount of each Borrowing hereunder
shall be not less than $1,000,000, and in integral multiples of $500,000. No
more than five (5) Loans shall be outstanding at any one time.
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2.2 NOTICE OF BORROWING.
(a) Whenever the Company desires to make a Borrowing hereunder,
it shall give the Agent (i) on the date of the requested Borrowing, written
notice of each Base Rate Loan, (ii) at least two (2) Business Days' prior
written notice of each CD Rate Loan and (iii) at least three (3) Business Days'
prior written notice of each Eurodollar Loan to be made hereunder. Each such
notice in respect of Fixed Rate Loans shall be given prior to 12:00 Noon (New
York City time) on the date specified, and each such notice in respect of Base
Rate Loans shall be given prior to 10:00 A.M. (New York City time) on the date
specified. Each such notice (each, a "Notice of Borrowing") shall be irrevocable
and specify the aggregate principal amount of the Loans to be made pursuant to
such Borrowing, the anticipated use of proceeds of such Borrowing, the aggregate
amount of Money Market Loans to be outstanding on the date of Borrowing, the
date of Borrowing (which shall be a Business Day), whether the Loans being made
pursuant to such Borrowing are to be Base Rate Loans, CD Rate Loans or
Eurodollar Loans and (in the case of Fixed Rate Loans) the Interest Period to be
applicable thereto. Each such Notice of Borrowing shall be substantially in the
form of Exhibit H hereto.
(b) Without in any way limiting the Company's obligation to
provide written notice, the Agent may act without liability upon the basis of
telephonic notice believed by the Agent in good faith to be from the Company
prior to receipt of a written confirmation. In each such case, the Company
hereby waives the right to dispute the Agent's record of the terms of such
telephonic notice.
(c) The Agent shall promptly give each Bank notice of the
proposed Borrowing, of such Bank's proportionate share thereof and of the other
matters covered by the Notice of Borrowing.
2.3 DISBURSEMENT OF FUNDS.
(b) No later than 12:00 Noon (New York City time) on the date of
each Borrowing, each Bank shall make available its Commitment Percentage of the
amount (if any) by which the principal amount of the Borrowing requested to be
made on such date exceeds the principal amount of Loans (if any) maturing on
such date, in Dollars and in immediately available funds at the Payment Office,
unless the Agent has determined that any applicable condition specified in
Section IV has not been satisfied. The Agent will make available to the Company
at the Payment Office the aggregate of the amounts (if any) so made available by
the Banks. To the extent that Loans previously made by the Banks mature on the
date of a requested Borrowing, the Banks
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shall apply the proceeds of the Loans they are then making, to the extent
thereof, to the repayment of such maturing Loans, such Loans and repayments
intended to be a contemporaneous exchange.
(b) Unless the Agent shall have been notified by any Bank prior
to the date of a Borrowing that such Bank does not intend to make available to
the Agent such Bank's Commitment Percentage of the Borrowing to be made on such
date, the Agent may assume that such Bank has made such amount available to the
Agent on such date and the Agent may make available to the Company a
corresponding amount. If such corresponding amount is not in fact made available
to the Agent by such Bank on the date of Borrowing, the Agent shall be entitled
to recover such corresponding amount on demand from such Bank together with
interest at the Federal Funds Effective Rate for each day (including to date
such amount is made available by the Agent to the Company but excluding the date
of payment by such Bank to the Agent) such amount is outstanding. If such Bank
does not pay such corresponding amount, with interest, forthwith upon the
Agent's demand therefor, the Agent shall promptly notify the Company, and the
Company shall immediately pay such corresponding amount to the Agent together
with interest at the rate specified in Section 2.5(d). Nothing in this Section
shall be deemed to relieve any Bank from its obligation to fulfill its
Commitment hereunder or to prejudice any rights which the Company may have
against any Bank as a result of any default by such Bank hereunder.
(c) No Bank shall be responsible for any default by any other
Bank in its obligation to make Loans hereunder, and each Bank shall be obligated
to make the Loans provided to be made by it hereunder, regardless of the failure
of any other Bank to fulfill its Commitment hereunder.
2.4 NOTES. The Company's obligation to pay the principal of and
interest on the Loans made by each Bank shall be evidenced by a Note, and in the
case of Loans by Morgan, Deutsche Bank and Credit Lyonnais, by two Notes, one
evidencing the Company's obligations in respect of Base Rate Loans and CD Rate
Loans, and the other evidencing the Company's obligations in respect of
Eurodollar Loans. The date, amount, Type and, in case of a Fixed Rate Loan, the
Interest Period with respect to the making or payment of each Loan made by a
Bank shall be recorded on the schedule (or continuation thereof) attached to the
Note issued to such Bank. The failure to record, or any error in recording, any
Loan or repayment on such schedule (or continuation thereof) shall not, however,
affect the obligations of the Company hereunder or under any Note to
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repay the principal amount of the applicable Loans, together with all interest
accruing thereon or any other amount due and payable under the Loan Documents.
Each such schedule (or continuation thereof) as maintained by a Bank shall
constitute PRIMA FACIE evidence of the outstanding amount of Loans evidenced by
such Bank's Note.
2.5 INTEREST.
(a) The Company agrees to pay interest in respect of the unpaid
principal amount of each Base Rate Loan from the date thereof to and including
the Conversion Date at a fluctuating rate per annum which shall be equal to the
Base Rate in effect from time to time, and thereafter until maturity (whether by
acceleration or otherwise) at a rate per annum which shall be equal to the Base
Rate in effect from time to time PLUS one-quarter of one percent.
(b) The Company agrees to pay interest in respect of the unpaid
principal amount of each CD Rate Loan from the date thereof until maturity
(whether by acceleration or otherwise) at a rate per annum which shall be equal
to the relevant Fixed CD Rate PLUS the Applicable CD Rate Margin.
(c) The Company agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date thereof until maturity
(whether by acceleration or otherwise) at a rate per annum which shall be equal
to the relevant London Interbank Offered Rate PLUS the Applicable Eurodollar
Rate Margin.
(d) Overdue principal (whether by reason of maturity,
acceleration or otherwise) and, to the extent permitted by law, overdue interest
in respect of each Loan and all other overdue amounts owing hereunder shall bear
interest for each day that such amounts are overdue at a rate per annum equal to
two percent (2%) per annum in excess of the Base Rate in effect from time to
time; PROVIDED, that no Loan shall bear interest after maturity (whether by
acceleration or otherwise) at a rate per annum less than two percent (2%) in
excess of the rate of interest applicable thereto at maturity.
(e) Interest on each Loan shall accrue from and including the
date of such Loan to but excluding the date of any repayment thereof, and shall
be payable (i) on the last day of the Interest Period applicable thereto,
(ii) for an Interest Period in excess of three (3) months in the case of a
Eurodollar Loan or ninety (90) days in the case of a CD Rate Loan, on each day
which occurs every three (3) months or every ninety (90) days, respectively,
after the initial date of such Interest Period, (iii) on the date
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of any prepayment (on the amount prepaid), (iv) at maturity (whether by
acceleration or otherwise) and (v) after maturity, on demand.
(f) The Agent, upon determining the Fixed CD Rate or the London
Interbank Offered Rate for any Interest Period, shall promptly notify the
Company and the Banks thereof.
(g) In no event shall the rate of interest on any Loan exceed
the maximum rate permitted by applicable law.
2.6 INTEREST PERIODS. In connection with each Borrowing, the Company
shall elect an interest period (each an "Interest Period") to be applicable to
such Borrowing, which Interest Period shall (x) in the case of Base Rate Loans,
be a 90 day period (y) in the case of CD Rate Loans, be either a 30, 60, 90 or
180 day period (or, upon the prior written consent of all of the Banks, a 270 or
360 day period), and (z) in the case of Eurodollar Loans, be either a 1, 2, 3 or
6 month period (or, upon the prior written consent of all of the Banks, a 9 or
12 month period); PROVIDED, THAT:
(i) subject to clause (v) below, the Interest Period for any
Loan shall commence on the date of such Loan;
(ii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; PROVIDED, THAT if any Interest Period in respect of a
Eurodollar Loan (other than a Eurodollar Loan made pursuant to Section 2.13(b))
would otherwise expire on a day which is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such Interest
Period shall expire on the next preceding Business Day;
(iii) any Interest Period in respect of a Eurodollar Loan which
begins on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (iv) below, end on the last Business
Day of a calendar month;
(iv) no Interest Period shall extend beyond any date upon which
the Total Commitment is scheduled to be reduced under Section 2.8(b) unless the
aggregate principal amount of Loans which are Base Rate Loans or which have
Interest Periods which will expire on or before such date is equal to or in
excess of the amount of any payment which would be required pursuant to Section
2.8 (including,
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without limitation, mandatory reduction payments) or prepayment which would be
required pursuant to Section 2.9 in connection with any such Commitment
reduction; and
(v) the Interest Period for a Loan which is converted pursuant
to Section 2.13(b) shall commence on the date of such conversion and shall
expire on the date on which the Interest Periods for the related Loans of the
other Banks which were not converted expires.
2.7 REPAYMENT OF LOANS. Each Loan shall mature, and the Company shall
repay to each Bank the unpaid principal amount of each Loan made by such Bank
hereunder, together with all accrued and unpaid interest thereon, on the last
day of the Interest Period in respect of such Loan.
2.8 VOLUNTARY TERMINATION OR REDUCTION AND MANDATORY REDUCTION OF
TOTAL COMMITMENT.
(a) The Company may, upon at least three (3) Business Days'
written notice to the Agent, terminate entirely at any time, or proportionately
reduce from time to time, in amounts at least equal to the aggregate of
$5,000,000 and in integral multiples of $1,000,000, the unused portion of the
Total Commitment, provided that any such reduction shall apply proportionately
to the Commitment of each Bank. If the Total Commitment is terminated in its
entirety, all accrued fees shall be payable on the effective date of such
termination. No reduction in whole or in part of the Total Commitment shall be
subject to reinstatement, except pursuant to subsection (c) below.
(b) The Total Commitment shall be automatically and permanently
reduced on the Conversion Date to the aggregate amount of Loans outstanding on
such date. In addition, the Total Commitment shall be automatically and
permanently reduced further on the day corresponding to the Conversion Date in
each of the third, sixth, ninth, twelfth, fifteenth, eighteenth, twenty-first,
twenty-fourth, twenty-seventh, thirtieth, thirty-third and thirty-sixth month
following the Conversion Date, by 1/12 of the aggregate amount of Loans
outstanding on the Conversion Date. The Commitment Amount of each Bank shall be
reduced by an amount equal to its Commitment Percentage of the amount of each
such reduction.
(c) The Total Commitment shall be further reduced by the amount
of Money Market Loans, if any, outstanding at any one time, subject to
reinstatement to the extent of the repayment of any such Money Market Loans. The
Commitment Amount of each Bank shall be reduced by an amount equal to its
Commitment Percentage of the amount of each such reduction.
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2.9 PREPAYMENTS.
(a) Concurrently with any reduction of the Commitments pursuant
to Section 2.8, the Company shall pay or prepay such amount of each Bank's
outstanding Loans, if any, as may be necessary so that after such prepayment the
aggregate unpaid principal amount of such Bank's Loans does not exceed the
amount of such Bank's Commitment Percentage of the Total Commitment as then
reduced. Each prepayment made pursuant to this Section shall be accompanied by
all interest accrued on the amount prepaid to the date of such prepayment and
shall be applied to prepay the Loans of the Banks in proportion to their
respective Commitment Percentages.
(b) The Company may, upon at least one (1) Business Day's
irrevocable written notice to the Agent, prepay, without premium or penalty, the
Loans at any time in whole, or from time to time in part, in amounts aggregating
at least $1,000,000 and in integral multiples of $500,000, by paying the
principal amount to be prepaid together with (i) accrued interest thereon to the
date of prepayment and (ii) in the case of a prepayment of Fixed Rate Loans, any
amounts payable to any Bank under Section 2.16 as a result of such prepayment.
Each such optional prepayment shall be applied to prepay the Loans of the Banks
in proportion to their respective Commitment Percentages.
(c) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share of such prepayment.
2.10 FEES.
(a) The Company shall pay to the Agent for the account of and in
accordance with the Commitment Percentage of each Bank a commitment fee for the
period commencing on the Closing Date to and including the Termination Date (or
such earlier date as the Total Commitment shall have been terminated) computed
at a rate equal to the Applicable Commitment Fee Rate per annum as in effect
from time to time on the average daily unused portion of the Total Commitment
(calculated, for purposes of this Section 2.10(a), without giving effect to any
reduction in the Total Commitment pursuant to Section 2.8(c), payable quarterly
in arrears on the last Business Day of each March, June, September and December,
commencing September 30, 1994, and on the Termination Date or such earlier date
as the Total Commitment shall be terminated.
(b) The Company shall pay to each Agent for its own account such
fees as may from time to time be agreed
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upon pursuant to a separate agreement between the Company and such Agent.
(c) All fees payable hereunder shall be non-refundable.
2.11 PAYMENTS, ETC.
(a) All payments by the Company under this Agreement shall be
made without defense, set-off, counterclaim or claim of recoupment to the Agent
not later than 11:00 A.M. (New York City time) on the date when due and shall be
made in Dollars in immediately available funds at the Payment Office of the
Agent. The Agent will promptly thereafter distribute funds in the form received
relating to the payment of principal, interest or fees (other than the fees
specified in Section 2.10(b)) to the Banks ratably in accordance with each
Bank's Commitment Percentage for the account of their respective Lending
Offices, and funds in the form received relating to the payment of any other
amount payable to any Bank to such Bank for the account of its Lending Office.
(b) Except as provided in Section 2.6(ii), whenever any payment
to be made hereunder or under any Note shall be stated to be due on a day which
is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal and, to the
extent permitted by applicable law, interest, fees and any other amounts payable
under any Loan Document, interest thereon shall be payable at the applicable
rate during such extension, provided that if the next succeeding Business Day is
a date beyond the Termination Date, payments to be made hereunder shall be due
on the next preceding Business Day.
(c) All computations of interest based upon the Prime Lending
Rate shall be made on the basis of a year of 365 days, and all other
computations of interest and fees shall be made on the basis of a year of 360
days, in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest or
commitment fees are payable. Each determination by the Agent of an interest rate
or fee hereunder shall, except for manifest error, be final, conclusive and
binding for all purposes.
2.12 INTEREST RATE NOT ASCERTAINABLE, ETC. In the event that the
Agent is advised by the Reference Banks on or prior to the first day of any
Interest Period for any Fixed Rate Loans that deposits in Dollars (in the
applicable amounts) are not being offered to the Reference Banks in the relevant
market for such Interest Period or the Agent shall
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have determined (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) that on any date for determining the
London Interbank Offered Rate or the Fixed CD Rate for any Interest Period, by
reason of any changes arising after the date of this Agreement affecting the
London interbank market or the secondary certificate of deposit market, as the
case may be, or any Bank's position in such markets, adequate and fair means do
not exist for ascertaining the applicable interest rate on the basis provided
for in the definition of London Interbank Offered Rate or Fixed CD Rate, as the
case may be, then, and in any such event, the Agent shall forthwith give notice
to the Company and to the Banks of such determination. Until the Agent notifies
the Company that the circumstances giving rise to the suspension described
herein no longer exist, the obligations of the Banks to make CD Rate Loans or
Eurodollar Loans, as the case may be, shall be suspended, and the Banks shall
make any requested CD Rate Loans or Eurodollar Loans, as the case may be, as a
Base Rate Loan.
2.13 ILLEGALITY.
(a) In the event that any Bank shall have determined (which
determination shall, absent manifest error, be final, conclusive and binding
upon all parties) at any time that the making or continuance or funding of any
Fixed Rate Loan has become unlawful or impossible by compliance by such Bank in
good faith with any applicable law, governmental rule, regulation, guideline or
order, or any interpretation thereof (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful), then, in any such
event, such Bank shall give prompt notice to the Company and to the Agent of
such determination (which notice the Agent shall promptly transmit to the other
Banks).
(b) Upon the giving of the notice to the Company referred to in
clause (a) above, (i) the Company's right to request and such Bank's obligation
to make such type of Fixed Rate Loans shall be immediately suspended, and such
Bank shall make a Loan as part of the requested Borrowing of such Fixed Rate
Loans as a Base Rate Loan with an Interest Period for such Base Rate Loan
identical to the Interest Period for such requested Fixed Rate Loans,
notwithstanding clause (x) of Section 2.6, which such Base Rate Loan shall, for
all other purposes, be considered part of such Borrowing, and (ii) if the
affected Fixed Rate Loan or Loans are then outstanding, the Company shall
immediately, or if permitted by applicable law, no later than the date permitted
thereby, convert each such Loan into a Loan or Loans of a different Type with an
Interest Period
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ending on the date on which the Interest Period applicable to the affected Fixed
Rate Loan expires.
2.14 INCREASED COSTS; CAPITAL ADEQUACY; REGULATION D COMPENSATION.
(a) If, by reason of (x) the introduction of or any change
(including, without limitation, any change by way of imposition or increase of
reserve requirements) in or in the interpretation, application or administration
of any law, rule or regulation, or (y) the compliance with any guideline or
request issued or made subsequent to the date hereof from any central bank or
other governmental authority or quasi-governmental authority exercising control
over banks or financial institutions generally (whether or not having the force
of law and whether or not failure to comply therewith would be unlawful):
(i) any Bank (or its applicable Lending Office) shall be
subject to any tax, duty or other charge with respect to its Fixed Rate Loans,
its Note, or its obligation to make Fixed Rate Loans, or there shall be a change
in the basis of taxation of payments to any Bank of the principal of or interest
on its Fixed Rate Loans or any other amounts due under this Agreement in respect
of its Fixed Rate Loans or its obligation to make Fixed Rate Loans (except for
changes in the rate of tax on the overall net income of such Bank or its
applicable Lending Office imposed by the jurisdiction in which such Bank's
principal executive office or applicable Lending Office is located); or
(ii) any reserve (including, without limitation, any imposed by
the Board of Governors of the Federal Reserve System), special deposit,
insurance assessment or similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Bank's applicable Lending Office
shall be imposed, modified or deemed applicable or any other condition affecting
its Fixed Rate Loans or its obligation to make Fixed Rate Loans shall be imposed
on any Bank or its applicable Lending Office or the London interbank market or
the secondary certificate of deposit market;
and as a result thereof there shall be any increase in the cost to such Bank of
agreeing to make or making, funding or maintaining Fixed Rate Loans (except to
the extent already included in the determination of the applicable Fixed CD Rate
for CD Rate Loans or the applicable London Interbank Offered Rate for Eurodollar
Loans or in any calculations made pursuant to Section 2.14(d)), or there shall
be a reduction in the amount received or receivable by such Bank or its
applicable Lending Office, then the Company shall from time to time, upon
written notice from and demand by
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such Bank (with a copy of such notice and demand to the Agent), pay the Agent
for the account of such Bank, within five (5) Business Days after the date
specified in such notice and demand, additional amounts sufficient to indemnify
such Bank against such increased cost. A certificate as to the amount of such
increased cost, submitted to the Company and the Agent by such Bank, shall,
except for manifest error, be final, conclusive and binding for all purposes.
(b) If at any time the Required Banks shall advise the Agent
that because of the circumstances described in clauses (x) or (y) of Section
2.14(a) or any other circumstances arising after the Closing Date affecting such
Banks or the London interbank market or the secondary certificate of deposit
market or such Banks' position in such markets, the London Interbank Offered
Rate or the Fixed CD Rate, as the case may be, as determined by the Agent, will
not adequately and fairly reflect the cost to such Banks of funding any Fixed
Rate Loans, then, and in any such event:
(i) the Agent shall forthwith give notice (by telephone
confirmed in writing) to the Company and to the Banks of such advice;
(ii) the Company's right to request and the Banks' obligation to
make any such affected Fixed Rate Loans shall be immediately suspended; and
(iii) the Banks shall make Loans as part of the requested
Borrowing of any such affected Fixed Rate Loans as Base Rate Loans.
(c) without limiting the foregoing, in the event that any Bank
shall have determined that the adoption or effectiveness subsequent to the date
hereof of any law, treaty, governmental (or quasi-governmental) rule,
regulation, guideline or order regarding capital adequacy, or any change
subsequent to the date hereof therein or in the interpretation, application or
administration thereof, or compliance by any Bank (or its Parent) with any
request or directive made or issued subsequent to the date hereof regarding
capital adequacy (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful) from any central bank or
governmental agency or body having jurisdiction, shall have the effect of
increasing the amount of capital required to be maintained by such Bank (or its
Parent) (including, without limitation, with respect to any Bank's Commitment)
or of reducing the rate of return on such Bank's (or its Parent's) capital, then
the Company shall from time to time, within five (5) days of written notice and
demand from such Bank (with a
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copy to the Agent), pay to the Agent, for the account of such Bank, additional
amounts sufficient to compensate such Bank (or its Parent) for the cost of such
additional required capital or reduced rate of return. A certificate as to the
amount of such cost or reduced rate of return, submitted to the Company and the
Agent by such Bank, shall absent manifest error, be final, conclusive and
binding for all purposes.
(d) For so long as any Bank maintains reserves against
"Eurocurrency liabilities" (or any other category of liabilities which includes
deposits by reference to which the interest rate on Eurodollar Loans is
determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of such Bank to United States
residents), and as a result the cost to such Bank (or its Lending Office) of
making or maintaining its Eurodollar Loans is increased, then such Bank may
require the Company to pay, contemporaneously with each payment of interest on
the Eurodollar Loans, additional interest on the related Eurodollar Loan of such
Bank at a rate per annum up to but not exceeding the excess of (i) (A) the
applicable London Interbank Offered Rate divided by (B) one MINUS the Eurodollar
Reserve Percentage over (ii) the applicable London Interbank Offered Rate. Any
Bank wishing to require payment of such additional interest (x) shall so notify
the Company and the Agent, in which case such additional interest on the
Eurodollar Loans of such Bank shall be payable to such Bank at the place
indicated in such notice with respect to such Interest Period commencing at
least three Business Days after the giving of such notice and (y) shall furnish
to the Company at least five Business Days prior to each date on which interest
is payable on the Eurodollar Loans an officer's certificate setting forth the
amount to which such Bank is then entitled under this Section (which shall be
consistent with such Bank's good faith estimate of the level at which the
related reserves are maintained by it). A certificate as to the amount of such
additional interest, submitted to the Company and the Agent by such Bank, shall
absent manifest error, be final, conclusive and binding for all purposes.
(e) In the event that any Bank shall have requested any payment
under subsections (a), (c), or (d) of this Section 2.14, the Company may, upon
not less than thirty (30) days' notice to the Agent and such Bank, terminate
entirely the Commitment of such Bank, provided that such termination shall only
be effective upon the replacement of such Bank with another lender acceptable to
the Agent with a Commitment equal to the Commitment of such Bank. Upon the
effectiveness of such termination, the Company shall repay to such Bank the
principal amount of all Loans of such Bank then outstanding, together with all
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accrued and unpaid interest, commitment fees and other amounts (including
amounts payable in accordance with Section 2.16 as a result of such repayment)
payable in connection therewith. The termination of any Bank's Commitment
pursuant to this Section 2.14(e) shall not affect any amounts payable to such
Bank under this Section 2.14.
(f) Notwithstanding anything to the contrary contained in this
Section 2.14, no Bank shall be entitled to payment by the Company in respect of
any increased costs or capital requirements or reduced rate of return pursuant
to subsections (a) or (c) of this Section 2.14 incurred more than ninety (90)
days prior to the giving by such Bank to the Company of notice and demand for
such payment in accordance with such applicable subsection. For purposes of this
subsection (f), any such increased costs or capital requirements or reduced rate
of return incurred as a result of the retroactive application of any law, rule,
regulation, treaty, guideline, directive, request or order or of any change
therein or interpretation, application or administration thereof (each of the
foregoing, a "Change"), shall be deemed to have been incurred on the date of the
effectiveness of such Change.
2.15 CHANGE OF LENDING OFFICE. Each Bank agrees that it will use
reasonable efforts to designate an alternate Lending Office with respect to any
of its Fixed Rate Loans affected by the matters or circumstances described in
Sections 2.13 or subsections (a) through (d) of Section 2.14 or to take any
other reasonable action to reduce the liability of the Company or avoid the
results provided thereunder, so long as such designation or action is not
disadvantageous to such Bank or contrary to its policies as determined by such
Bank in its sole discretion.
2.16 FUNDING LOSSES. The Company shall compensate each Bank, upon its
written request (which request shall set forth the basis for requesting such
amounts and which request shall, absent manifest error, be final, conclusive and
binding upon all of the parties hereto), for all losses, expenses and
liabilities (including, without limitation, any interest paid by such Bank to
lenders of funds borrowed by it to make or carry its Fixed Rate Loans to the
extent not recovered by the Bank in connection with the reemployment of such
funds and including loss of anticipated profits), which the Bank may sustain:
(i) if for any reason (other than a default by such Bank) a borrowing of Fixed
Rate Loans does not occur on the date specified therefor in a Notice of
Borrowing, (ii) if any repayment or prepayment (or conversion pursuant to
Section 2.13) of any of its Fixed Rate Loans occurs on a date which is not the
last day of an Interest Period applicable thereto, or (iii) if, for any reason,
the Company defaults
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in its obligation to repay its Fixed Rate Loans when required by the terms of
this Agreement.
2.17 SHARING OF PAYMENTS, ETC. If any Bank shall obtain any payment
or reduction (including, without limitation, any amounts received as adequate
protection of a deposit treated as cash collateral under the Bankruptcy Code) of
any obligation of the Company hereunder (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise) in excess of its ratable
share of payments or reductions on account of such obligations obtained by all
the Banks, such Bank shall forthwith (i) notify each of the other Banks and the
Agent of such receipt and (ii) purchase from the other Banks such participation
in the affected obligations as shall be necessary to cause such purchasing Bank
to share the excess payment or reduction, net of costs incurred in connection
therewith, ratably with each of them, provided that if all or any portion of
such excess payment or reduction is thereafter recovered from such purchasing
Bank or additional costs are incurred, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery or such additional costs,
but without interest. The Company agrees that any Bank so purchasing a
participation from another Bank pursuant to this Section 2.17 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Bank were the direct creditor of the Company in the amount of such
participation.
2.18 CERTAIN ADJUSTMENTS. If any Loans are outstanding to the Company
as of the Closing Date, (i) each Bank which is not an Existing Bank shall make a
Loan to the Company on the Closing Date equal to such Bank's Commitment
Percentage of the aggregate of all Loans outstanding as of the Closing Date
(without regard to any Loans made pursuant to clauses (i) and (ii) of this
Section 2.18, (ii) each Existing Bank having Loans outstanding in an amount less
than such Existing Banks Commitment Percentage of the aggregate of all Loans
outstanding as of the Closing Date (without regard to any Loans made pursuant to
clauses (i) and (ii) of this Section 2.18) shall make a Loan to the Company on
the Closing Date in an amount equal to such deficiency, and (iii) the Company
shall on the Closing Date prepay Loans made by each Existing Bank in an amount
equal to the excess, if any, of such Existing Bank's Commitment Percentage of
the aggregate of all Loans outstanding as of the Closing Date (without regard to
any Loans made pursuant to clauses (i) and (ii) of this Section 2.18); provided,
however, that if on the Closing Date (before giving effect to any of the
transactions contemplated by this Section 2.18) there are outstanding any Fixed
Rate Loans, all such Fixed Rate Loans shall be prepaid by the Company and shall,
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pursuant to a Notice of Borrowing, be re-borrowed (or borrowed) in accordance
with each Bank's Commitment Percentage. All prepayments of outstanding Loans
pursuant to this Section 2.18 shall be accompanied by all accrued and unpaid
interest thereon and all other amounts (including amounts payable in accordance
with Section 2.16 as a result of such prepayment) payable in connection
therewith.
SECTION III
REPRESENTATIONS AND WARRANTIES
In order to induce the Banks and the Agents to enter into this Agreement
and to make Loans hereunder, the Company represents and warrants to the Banks
that:
3.1 ORGANIZATION AND QUALIFICATION. Each of the Company and its Subsidiaries
(a) is a corporation duly organized, existing and in good standing under the
laws of its jurisdiction of incorporation, (b) has all requisite corporate power
to own its property and conduct its business as now conducted and as presently
contemplated and (c) is duly qualified and in good standing as a foreign
corporation and is duly authorized to do business in each jurisdiction wherein
the nature of its properties or business requires such qualification, except
where the failure to be so qualified would not have a material adverse effect on
the business, financial condition, assets or properties of the Company and its
Subsidiaries taken as a whole. Neither the Company nor any of the Guaranty
Subsidiaries (i) is an "investment company" or a company controlled by an
"investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, or (ii) is subject to regulation
under any Federal or State statute or regulation which limits its ability to
incur Indebtedness other than usury laws.
3.2 CORPORATE AUTHORITY. The execution, delivery and performance by
the Company, and each Subsidiary party to any Loan Document, of this Agreement,
the Notes and the other Loan Documents and the transactions contemplated hereby
and thereby are within the corporate power and authority of the Company and each
such Subsidiary, and have been authorized by all required proper corporate,
shareholder and other action, and do not and will not contravene any provision
of law, charter document or by-laws or contravene any provision of, or
constitute an event of default or event which, with the lapse of time or the
giving of notice, or both, would constitute an event of default under any other
agreement, instrument or undertaking binding on the Company or any such
Subsidiary.
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3.3 VALID OBLIGATIONS. This Agreement, the Notes, and each of the
other Loan Documents and the transactions contemplated hereby and thereby and
all of the terms and provisions hereof and thereof are the legal, valid and
binding obligations of the Company and each Subsidiary party thereto,
enforceable in accordance with their respective terms except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
laws affecting the enforcement of creditors' rights generally, and except as the
remedy of specific performance or of injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.
3.4 GOVERNMENTAL APPROVALS. The execution, delivery and performance
of this Agreement, the Notes and each of the other Loan Documents and the
transactions contemplated hereby and thereby do not require any approval or
consent of, or filing or registration with, any governmental or other agency or
authority, or any other party except, in the case of the Security Documents, the
filing of Uniform Commercial Code financing statements in all appropriate public
offices.
3.5 TITLE TO PROPERTIES; ABSENCE OF ENCUMBRANCES. Each of the Company
and, to the knowledge of the Company after due inquiry, each of its Subsidiaries
has good and marketable title to all of its respective properties, assets and
rights of every name and nature now purported to be owned by it, including,
without limitation, such properties and assets as are shown on the financial
statements referred to in Section 3.6 (except such assets as have been disposed
of in the ordinary course of business since the date thereof), free from all
Encumbrances whatsoever, except for Encumbrances permitted by Section 5.14 or as
otherwise disclosed in Exhibit I hereto, and, except as so disclosed, free from
all defects of title that might materially adversely affect such property,
assets or rights, taken as a whole.
3.6 FINANCIAL STATEMENTS. The Company has furnished to the Banks its
(i) consolidated balance sheet as at December 31, 1993 and its consolidated
statement of income, retained earnings and cash flow for the calendar year then
ended, and related footnotes, audited and certified by Price Waterhouse and
(ii) unaudited consolidating balance sheet and statement of income of the
Company and its Subsidiaries as at December 31, 1993 and for the calendar year
then ended. Such financial statements were prepared in accordance with GAAP
applied on a consistent basis throughout the periods specified and present
fairly the financial position of the Company and its Subsidiaries and the
results of the operations of the Company and its Subsidiaries for such periods.
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3.7 CHANGES. Since December 31, 1993, there have been no changes in
the financial condition, business or results of operations of the Company or any
of its Subsidiaries other than changes in the ordinary course of business, the
effect of which have not, individually or in the aggregate, been materially
adverse to the Company and its Subsidiaries taken as a whole.
3.8 EVENTS OF DEFAULT. As of the Closing Date, no Default or Event of
Default has occurred and is continuing, and no default exists under any material
agreement or other material contractual obligations of the Company or any
Subsidiary.
3.9 TAXES. The Company and its Subsidiaries have filed all tax
returns which are required to be filed and have paid all taxes (including
interest and penalties) which have become due pursuant to such returns or
pursuant to any assessment or notice of tax claim or deficiency received by
them. All tax liabilities were adequately provided for at the end of the most
recent calendar year of the Company and are now so provided for on the books of
the Company and its Subsidiaries. Except as set forth on Exhibit J hereto, no
material tax liability has been asserted by the Internal Revenue Service or any
other taxing authority for taxes (or interest or penalties thereon) in excess of
those already paid.
3.10 LITIGATION. Except as set forth on Exhibit J hereto, there is no
litigation, proceeding or investigation pending or, to the knowledge of any of
the Company's officers, threatened, against the Company or any Subsidiary which
has any reasonable possibility of resulting in a material judgment which is not
fully covered by insurance or which would otherwise have a material adverse
effect on the business, financial condition, assets or properties of the Company
and its Subsidiaries taken as a whole.
3.11 USE OF PROCEEDS. The proceeds of Loans shall be used for the
purpose of (i) refinancing amounts outstanding as of the Closing Date under the
Original Credit Agreement, (ii) financing the acquisition by the Company or by
any wholly-owned Subsidiary of the Company of the capital stock of any Person or
Persons engaged solely in one or more of the Permitted Businesses, (iii)
financing the acquisition by the Company or by any wholly-owned Subsidiary of
the Company from any Person or Persons of assets used in, or related to
Permitted Businesses, and (iv) providing working capital for the Company,
PROVIDED that Loans made for working capital purposes shall not exceed in the
aggregate $35,000,000 at any one time outstanding. Neither the
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Company nor any Subsidiary is in the business of extending credit secured by
"margin stock" and no portion of any Loan is to be used for the "purpose of
purchasing or carrying" any "margin security" or "margin stock" as such terms
are used in Regulations U and X or for any purpose that would entail a violation
of, or that is inconsistent with, Regulations G, U or X.
3.12 SUBSIDIARIES. (a) As of the Closing Date, all the Subsidiaries
of the Company are listed on Exhibit K hereto which sets forth the total amount
of capital stock issued and outstanding by each Subsidiary and the percentage of
such capital stock owned beneficially and of record by the Company or a
Subsidiary of the Company as the case may be. The Company or a Subsidiary of the
Company is the owner, free and clear of all Encumbrances, except for liens in
favor of the Collateral Agent for the ratable benefit of the Banks, of the
shares of issued and outstanding stock of each Subsidiary so indicated on
Exhibit K.
(b) As of the Closing Date, all shares of capital stock of the
Subsidiaries of the Company have been validly issued and are fully paid and
nonassessable, and, except as set forth on Exhibit L hereto, (i) no right to
subscribe to any additional shares have been granted, and no options, warrants,
conversion rights or similar rights to acquire any common stock of any
Subsidiary of the Company are outstanding, and (ii) with respect to any
Subsidiary which is not wholly-owned by the Company or a Subsidiary of the
Company, no dividend, liquidation or other preferences are in effect except in
favor of the Company or a Subsidiary of the Company, and neither the Company nor
any Subsidiary of the Company has entered into any agreement obligating the
Company to purchase or sell any capital stock of any Subsidiary owned
beneficially or of record by any Person.
(c) The aggregate consolidated revenues of all Subsidiaries of
the Company identified as Exempted Subsidiaries on Exhibit K did not equal or
exceed $5,000,000 for the four full consecutive fiscal quarters immediately
preceding the date hereof.
3.13 COMPLIANCE WITH ERISA. The Company and each member of the
Controlled Group have fulfilled their obligations under the applicable minimum
funding standards of ERISA and the Code with respect to each Plan and, to the
best of the knowledge of the Company's officers, are in compliance in all
material respects with the presently applicable provisions of ERISA and the
Code, and have not incurred any liability to the PBGC or a Plan under Title IV
of ERISA.
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3.14 SECURITIES AND EXCHANGE COMMISSION REGISTRATIONS
AND FILINGS, ETC. Except as otherwise indicated on Exhibit K, each Subsidiary in
existence on the Closing Date is duly registered with the Securities and
Exchange Commission (for purposes of this Section, the "SEC") as an investment
adviser under Section 203 of the Investment Advisers Act and each of the
Subsidiaries identified as such on Exhibit K is registered as a broker-dealer
under Section 15 of the Exchange Act. Each of Murray Johnstone and Murray
Johnstone International Limited, a wholly-owned Subsidiary of Murray Johnstone
incorporated in Scotland, is duly registered as a member of the Investment
Management Regulatory Organization, Limited as required under the laws of the
United Kingdom. Neither the Company nor any Subsidiary is required to be
registered, licensed or qualified as an investment adviser or broker dealer
under the Investment Advisers Act, the Exchange Act or any other applicable
United States federal or state law or regulation or any equivalent foreign law
or regulation, or subject to any material liability or disability by reason of
any failure to be so registered, licensed or qualified, except (i) for
Subsidiaries which are so registered, licensed or qualified or (ii) to the
extent that the failure to be so registered, licensed or qualified would not
have a material adverse effect on the business, financial condition, assets or
properties of the Company or such Subsidiary, as the case may be. Each
Subsidiary has filed with the SEC and with each other applicable United States
federal or state or foreign regulatory agency when due all reports and other
documents as are required for the conduct of its business by the Investment
Advisers Act, by the Exchange Act or by any United States federal or state law
or regulation or any equivalent foreign law or regulation and with respect to
which the failure to file when due has any reasonable possibility of having a
material adverse effect on the business, financial condition, assets or
properties of such Subsidiary, and there does not exist any proceeding or, to
the best of the Company's knowledge, any facts or circumstances the existence of
which could lead to any proceeding which would adversely affect the registration
of any Subsidiary with the SEC or with any other applicable United States
federal or state or foreign regulatory agency.
3.15 INDEBTEDNESS. Neither the Company nor any Subsidiary has any
Indebtedness, except Indebtedness permitted by Section 5.12.
3.16 PLEDGE AGREEMENT AND SECURITY AGREEMENT.
(a) The provisions of each of the Pledge Agreement, the
Subsidiaries Pledge Agreement, the Heitman Pledge Agreement, the UAM U.K.
Holdings Pledge Agreement and the DSI Pledge Agreement are effective to create
in favor of
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the Collateral Agent, for the ratable benefit of the Banks, a legal, valid and
enforceable security interest in all right, title and interest of the Company,
UAM Holdings, Heitman, UAM U.K. Holdings or DSI, as the case may be, in the
Pledged Stock described therein, and when the Collateral Agent receives
possession of the stock certificates representing the shares of such Pledged
Stock accompanied by undated stock powers duly executed in blank and when a
notice (each a "Bailee Notice" and collectively the "Bailee Notices") is duly
sent by the Company to each holder of the certificates evidencing the Second
Priority Pledged Securities (as such term is defined in the Pledge Agreement) to
the effect that the Collateral Agent, for the ratable benefit of the Banks, has
been granted a second priority security interest in such Second Priority Pledged
Securities, the Pledge Agreement shall constitute a fully perfected and
continuing first priority or, to the extent permitted hereunder and under the
Pledge Agreement, a fully perfected and continuing second priority, lien on and
security interest in all right, title and interest of the Company in the Pledged
Stock.
(b) The provisions of each of the Security Agreement, the
Subsidiaries Security Agreement and the Assignment of Partnership Interest are
effective to create in favor of the Collateral Agent, for the ratable benefit of
the Banks, a legal, valid and enforceable security interest in all right, title
and interest of the Company in collateral described therein and constitute and
shall continue to constitute a fully perfected and continuing first priority
lien on and security interest in all right, title and interest of the Company in
such collateral with respect to which a security interest may be perfected by
filing of financing statements under the Uniform Commercial Code.
3.17 REVENUE SHARING AGREEMENTS. The Revenue Sharing Agreements have
each been duly executed and delivered by the Company and by each Subsidiary
party thereto, and each is in full force and effect and has not been amended in
any manner during the period from the date each was delivered to the Banks
through the date hereof except as previously disclosed to the Banks in writing.
The representations and warranties of the Company and of the Subsidiaries
contained in each Revenue Sharing Agreement are true and correct in all material
respects.
3.18 COMPLIANCE WITH LAWS. The Company and each of its Subsidiaries
is in compliance in all material respects with all applicable laws, rules,
regulations and orders, including, without limitation, those relating to
environmental matters.
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3.19 SOLVENCY. After giving effect to the execution and delivery of
this Agreement and the other Loan Documents and the transactions contemplated
hereunder and thereunder, the Company and each of the Guaranty Subsidiaries is
and will be able to pay their debts as they mature, and neither the Company nor
any of the Guaranty Subsidiaries is or will be insolvent or has or will have
unreasonably small capital to conduct its present and prospective businesses.
SECTION IV
CONDITIONS OF LOANS
The obligation of each Bank to make a Loan to the Company hereunder is
subject to the satisfaction of the following conditions:
4.1 CONDITIONS PRECEDENT TO EFFECTIVENESS AND TO INITIAL LOANS. This Agreement
shall not become effective, and the Banks shall not be obligated to make their
initial Loans hereunder, unless concurrently therewith all obligations of the
Company to the Agents and the Existing Banks under the Original Credit Agreement
(including, without limitation, the payment of all accrued and unpaid interest
and commitment fees through the Closing Date) and all obligations of the Company
hereunder to the Agents or any Bank incurred prior to the initial Loans
(including, without limitation, the Company's obligation to reimburse the fees
and disbursements of counsel to the Agents or any Bank and any fees payable to
the Agent on the Closing Date) shall have been paid in full, and the Agent shall
have received the following, each dated as of the date of such initial Loans
(except where not applicable), duly executed and in form and substance
satisfactory to the Agent, with an original thereof for each Agent (except as
otherwise indicated below) and with sufficient photocopies thereof for each Bank
(except that in the case of the Notes, the originals thereof will be received by
the Agent for the account of the respective Banks):
(a) a duly completed Note, payable to the order of each Bank;
(b) the Confirmation and Amendment;
(c) copies of all consents, licenses and approvals, if any,
obtained by the Company or its Subsidiaries in connection with the execution,
delivery, performance, validity and enforceability of the Loan Documents; and
all such consents, licenses and approvals
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received by the Agent pursuant to this subsection (c) shall be in full force and
effect;
(d) a certificate of the President of the Company, addressed to
the Agents and the Banks and dated as of the Closing Date, to the effect that,
to the best of his knowledge and belief after due inquiry, (i) there exists no
Default or Event of Default, (ii) all representations and warranties of the
Company contained in this Agreement or otherwise made in writing to the Agents
or any Bank in connection herewith by or on behalf of the Company are true and
correct on and as of such date, with the same force and effect as if made on and
as of such date, (iii) all of the conditions set forth in this Section 4.1 have
been satisfied on and as of such date and (iv) after giving effect to the
execution and delivery of this Agreement and the other Loan Documents, the
making of the initial Loans hereunder and the other transactions contemplated by
this Agreement to be effected on or about or as of the Closing Date, the Company
will be able to pay its debts as they mature and the Company will not be
insolvent or have unreasonably small capital to conduct its present and
prospective businesses, all in form and substance satisfactory to the Banks;
(e) for the Company and each Guaranty Subsidiary (i) a copy of
the Certificate of Incorporation or Articles of Incorporation of such Person, as
amended through the Closing Date, certified by the Secretary of State or
comparable officer of the State of incorporation of such Person; (ii) a long-
form good standing certificate from the Secretary of State or other comparable
officer of the State of incorporation of such Person; (iii) long-form good
standing Certificates from the Secretaries of State of the states, or other
comparable officers of each jurisdiction, in which such Person is required to
qualify to do business; (iv) a tax status report (where obtainable) from the
Secretary of State or other comparable officer of the State of incorporation of
such Person; (v) tax status reports (where obtainable) of the Secretary of State
of the states, or other comparable officers of each jurisdiction, in which such
Person is required to qualify to do business; and (vi) such additional
supporting documents as the Agent or any Bank may reasonably request; provided,
however, that if any such good standing certificates or tax status reports are
not readily available, then a telegram from the appropriate Secretary of State
or comparable officer may be substituted therefor;
(f) certified copies of the resolutions of the Board of
Directors of the Company approving this Agreement, the Notes, the borrowings
hereunder and all the other Loan Documents being executed and delivered on the
Closing Date, and of each Guaranty Subsidiary approving the
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Confirmation and Amendment, and of all other documents, if any, evidencing
corporate action and/or governmental authorization or approval with respect to
this Agreement, the Notes, the borrowings hereunder and all the other Loan
Documents;
(g) a certificate of the Secretary or an Assistant Secretary of
the Company and each Guaranty Subsidiary certifying the name, title and true
signature of each officer of such Person authorized to execute this Agreement,
the Notes, the other Loan Documents being executed and delivered on the Closing
Date and the other documents or certificates to be delivered pursuant to this
Agreement;
(h) an opinion of Hill & Barlow, counsel to the Company and its
Subsidiaries, substantially in the form of Exhibit M-1 hereto, and an opinion of
Wildman, Harrold, Allen & Dixon, counsel to Heitman, substantially in the form
of Exhibit M-2 hereto, in each case addressed to the Agents and each of the
Banks, and covering such other matters as any Bank through the Agent may
reasonably request; the Company hereby expressly instructs each such counsel to
prepare its opinion and to deliver it to the Banks and the Agents for their
benefit;
(i) to the extent not delivered at the closing on May 18, 1992
under the Original Credit Agreement, copies, certified as true, complete and
correct by the Secretary or Assistant Secretary of the Company, of all Revenue
Sharing Agreements in force and effect on the Closing Date and all instruments
and documents evidencing Subordinated Indebtedness; and
(j) such other certificates, opinions, documents and instruments
confirming or otherwise relating to the transactions contemplated hereby as may
have been reasonably requested by the Agent or any Bank.
4.2 CONDITIONS PRECEDENT TO EACH LOAN. At the time of the making by
such Bank of each Loan, including the initial Loan (before as well as after
giving effect to such Loan and to the proposed use of the proceeds thereof):
(a) the Agent shall have received the relevant notice of
Borrowing;
(b) there shall exist no Default or Event of Default; and
(c) all representations and warranties contained herein and in
the other Loan Documents shall be true and correct with the same effect as
though such
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representations and warranties had been made on and as of the date of such Loan,
except as to any matters that have changed in accordance with or as permitted by
this Agreement.
Each request for a Borrowing and the acceptance by the Company of the proceeds
thereof shall constitute a representation and warranty by the Company, as of the
date of the Loans comprising such Borrowing, that the conditions specified in
subsections (b) and (c) of this Section 4.2 have been satisfied.
SECTION V
COVENANTS
So long as any Loan or any other Obligation remains outstanding hereunder
or under the Notes or any Bank shall have any obligation to make Loans
hereunder:
5.1 FINANCIAL STATEMENTS. The Company will furnish to the Banks:
(a) as soon as available to the Company, but in any event within
ninety (90) days after the end of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Subsidiaries as at the end of,
and a related consolidated statement of income, retained earnings and cash flow
for, such year, setting forth in each case in comparative form the figures for
the previous fiscal year, audited and certified by Price Waterhouse & Co. (or
other independent certified public accountants of nationally recognized standing
acceptable to the Required Banks); and, concurrently with such financial
statements, a written statement by such accountants that, in the making of the
audit necessary for their report and opinion upon such financial statements,
they have obtained no knowledge of any Default or Event of Default or, if in the
opinion of such accountants any such Default or Event of Default exists, they
shall disclose in such written statement the nature and status thereof;
(b) as soon as available to the Company, but in any event within
forty-five (45) days after the end of each of the first three (3) fiscal
quarters in each fiscal year, a consolidated and consolidating balance sheet of
the Company and its Subsidiaries as at the end of, and a related consolidated
and consolidating statement of income, retained earnings and cash flow for, the
period then ended, setting forth in each case in comparative form the figures
for each
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previous quarter in such fiscal year certified by the chief financial officer of
the Company as true and correct subject, however, to normal, recurring year-end
adjustments which shall not in the aggregate be material in amount;
(c) concurrently with the delivery of each financial statement
pursuant to clause (a) of this Section 5.1, a consolidating balance sheet of the
Company and its Subsidiaries as at the end of the calendar year then ended and a
related statement of retained earnings and cash flow and a consolidating
statement of income for each such year certified by the chief financial officer
of the Company as true and correct;
(d) contemporaneously with the delivery of the financial
statements described in Section 5.1(a) and (b), a certificate of the chief
financial officer of the Company stating that, to his best knowledge, after due
diligence, the Company is in compliance with all covenants of this Agreement
together with a summary of such officer's calculations verifying compliance with
Section 5.7 through Section 5.11 inclusive and Section 5.23 through Section 5.24
inclusive, and providing detailed calculations of the financial performance used
in determining the applicable Level as at the last day of such fiscal quarter,
and that such officer has reviewed the activities of the Company during the
period covered by such financial statements and has, to his best knowledge,
after due diligence, found no Default or Event of Default or if such Default or
Event of Default exists, a disclosure of the nature or status thereof.
(e) contemporaneously with the filing or mailing thereof, copies
of all material reports and financial statements submitted by the Company or any
Subsidiary to its stockholders or any State or federal agency in compliance with
any state or federal law or regulation;
(f) concurrently with the delivery of the financial statements
described in Sections 5.1(a) and (b), a revenue and contract amortization
history for purchase acquisitions of the Company for the fiscal quarter then
ended, substantially in the form attached hereto as Exhibit N.
(g) upon (i) the consummation of any acquisition by the Company
or by any Subsidiary of the Company of the capital stock of any Person, or of
all or a substantial portion of the assets of any Person, copies of all
agreements, instruments and documents executed and delivered in connection with
such transaction, including, without limitation, any Revenue Sharing Agreements
and any
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agreements or instruments representing Subordinated Indebtedness incurred in
connection with such transaction, and (ii) the execution of any amendment to any
agreement, instrument or document referred to in clause (i) of this subsection
(g), a true and complete copy of such amendment.
(h) from time to time, such other financial data and information
about the Company or its Subsidiaries as any Bank may reasonably request;
(i) if and when the Company gives or is required to give notice
to the PBGC of any "Reportable Event" (as defined in Section 4043 of ERISA) with
respect to any Plan which might constitute grounds for a termination of such
Plan under Title IV of ERISA, or if and when the Company knows that any member
of the Controlled Group or the plan administrator of any Plan has given or is
required to give notice of any such Reportable Event, a copy of the notice of
such Reportable Event given or required to be given to the PBGC; and
(j) without limiting clauses (a) through (i) of this Section
5.1, as soon as available, but in any event within ninety (90) days after the
end of each fiscal year of the Company, audited consolidated accounts for Murray
Johnstone and its Subsidiaries prepared in accordance with generally accepted
accounting principles in the U.K. in effect from time to time as at the end of
such fiscal year.
5.2 CONDUCT OF BUSINESS. The Company shall, and shall cause each of
its Subsidiaries to:
(a) duly observe and comply in all material respects with all
applicable laws and valid requirements of any governmental authorities relative
to its corporate existence, rights and franchises, to the conduct of its
business and to its property and assets, and will maintain and keep in full
force and effect all licenses and permits necessary in any material respect to
the proper conduct of its business, including, without limitation, the
registration as a broker-dealer of each Subsidiary required to so register under
the Exchange Act, the registration of each Subsidiary as an investment adviser
required to so register under Section 203 of the Investment Advisers Act, and
any equivalent foreign registration;
(b) maintain its corporate existence, rights and franchises;
(c) comply in all material respects with all applicable laws,
rules, regulations and orders in effect from time to time, including, without
limitation, those relating to environmental matters;
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(d) keep and maintain all property useful and necessary in its
business in operating condition, ordinary wear and tear excepted;
(e) in the case of each Subsidiary, be engaged in Permitted
Businesses; and
(f) in the case of the Company, continue to remain engaged in
the business of being a holding company which acquires firms engaged in
Permitted Businesses.
5.3 MAINTENANCE OF INSURANCE. The Company will, and will cause its
Subsidiaries to, maintain or cause to be maintained with financially sound and
reputable insurers, insurance with respect to its properties and business, and
the properties and business of its Subsidiaries, against loss or damage of the
kinds customarily insured against by reputable companies in the same or similar
businesses, such insurance to be of such types and in such amounts (with such
deductible amounts) as is customary for such companies under similar
circumstances. The Company shall, upon request of any Bank, furnish to the Banks
certificates or other satisfactory evidence of compliance with the foregoing
insurance provisions.
5.4 TAXES. The Company will pay, and will cause its Subsidiaries to
pay, all taxes, assessments or governmental charges on or against it or any of
its Subsidiaries or its or their respective properties prior to the time when
they become delinquent; PROVIDED, THAT this covenant shall not apply to any tax,
assessment or charge which is being contested in good faith by proper
proceedings and with respect to which adequate reserves have been established
and are being maintained in accordance with GAAP if no proceedings shall have
been commenced to foreclose any lien securing such tax, assessment or charge.
5.5 INSPECTION BY THE BANKS. The Company will, and will cause its
Subsidiaries to, permit any Bank, or its designees, at any reasonable time and
at reasonable intervals of time, for the purpose of ascertaining compliance with
this Agreement, to (i) visit and inspect the properties of the Company and its
Subsidiaries, (ii) examine and make copies of and take abstracts from the books
and records of the Company and its Subsidiaries and (iii) discuss the affairs,
finances and accounts of the Company and its Subsidiaries with their appropriate
officers.
5.6 MAINTENANCE OF BOOKS AND RECORDS. The Company will keep, and will
cause its Subsidiaries to keep, adequate books and records of account, in which
true and complete entries will be made reflecting all of its business
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and financial transactions, and such entries will be made in accordance with
GAAP consistently applied and applicable law.
5.7 CURRENT RATIO. The Company will at all times maintain
consolidated current assets equal to at least 120% of consolidated current
liabilities (excluding for this purpose the current portion of long-term debt).
5.8 CASH FLOW RATIOS. The Company will at all times (i) maintain a
ratio of Consolidated Cash Flow for the period consisting of the four (4)
complete consecutive calendar quarters immediately preceding the date of
determination (the "Preceding Period") to Consolidated Debt Service of at least
(A) from the Closing Date through the Conversion Date, 1.6:1, and (B) at all
times following the Conversion Date, 1.2:1, and (ii) maintain Consolidated Cash
Flow for the Preceding Period equal to at least 300% of Interest Expense for the
Preceding Period.
5.9 CONSOLIDATED NET WORTH. The Company will at all times maintain
Consolidated Net Worth of at least $190,234,000, PLUS an amount equal to 100% of
the proceeds of any sale by the Company of any shares of its capital stock
occurring on or after December 31, 1993, LESS an amount equal to the aggregate
amount paid by the Company after the Closing Date to repurchase shares of its
capital stock.
5.10 CONSOLIDATED LIABILITIES FOR BORROWED MONEY TO CONSOLIDATED NET
WORTH RATIO. The Company will not at any time permit consolidated liabilities
for Borrowed Money to exceed 225% of the sum of (a) Consolidated Net Worth, PLUS
(b) with respect to any Subsidiary whose acquisition by the Company or a
Subsidiary of the Company has been treated as a pooling of interests in
accordance with GAAP, 60% of the amount by which the fair market value
(determined at the date of such acquisition) of the stock of the Company issued
in exchange for the stock of such Subsidiary exceeds the book value of the stock
of such Subsidiary. For purposes of this Section 5.10, the fair market value of
each share of the stock of the Company shall be the mean of the bid and ask
prices per share on the date of such acquisition.
5.11 SENIOR INDEBTEDNESS TO CAPITAL FUNDS. The Company will not at
any time permit Senior Indebtedness to exceed 40% of the sum of (a) Capital
Funds, PLUS (b) with respect to any Subsidiary whose acquisition has been
treated as a pooling of interests in accordance with GAAP, 60% of the amount by
which the fair market value (determined at the date of such acquisition) of the
stock of the Company issued in exchange for the stock of such Subsidiary exceeds
the book value of the stock of such Subsidiary, PLUS (c) with
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respect to all investment advisory contracts held by the Company's Subsidiaries
which are amortized in accordance with GAAP, the cumulative amount of such
amortization for all such contracts taken by the Company from the later of the
date of the acquisition of such contracts by such Subsidiary or the date of the
acquisition of such Subsidiary by the Company or a Subsidiary of the Company
through the end of the fiscal quarter of the Company immediately preceding the
date of determination of compliance with this covenant (the amount referred to
in this clause (c) being hereinafter referred to as the "Amortization Amount");
PROVIDED, HOWEVER, that if the aggregate of the revenues (calculated in
accordance with GAAP and excluding intercompany items) of all Subsidiaries of
the Company for the four (4) consecutive full fiscal quarters of such
Subsidiaries immediately preceding the date of determination of compliance with
this covenant shall have declined from the aggregate of the revenues (calculated
in accordance with GAAP and excluding intercompany items) (i) in the case of
Subsidiaries acquired by the Company or a Subsidiary of the Company, of all such
Subsidiaries for the four (4) consecutive full fiscal quarters of each such
Subsidiary immediately prior to the acquisition by the Company (or by a
Subsidiary of the Company) of such Subsidiary and (ii) in the case of the
acquisition by a Subsidiary of the Company of such contracts, derived by the
seller of such contracts from such contracts for the four (4) consecutive full
fiscal quarters of such seller immediately prior to such acquisition by such
Subsidiary of such contracts (the aggregate of the revenues described in (i) and
(ii) above, the "Base Revenues"); then the Amortization Amount, for the purpose
of clause (c) above, shall be reduced by the percentage obtained by dividing (A)
the amount of such decline by (B) the Base Revenues and by adding five (5)
percentage points to the result obtained by such division.
5.12 LIMITATIONS ON INDEBTEDNESS. Neither the Company nor any of its
Subsidiaries will create, incur, assume or suffer to exist, contingently or
otherwise, any Indebtedness other than the following:
(a) Indebtedness of the Company and any of its Subsidiaries to
the Banks hereunder;
(b) Subordinated Indebtedness;
(c) Indebtedness existing as of the Closing Date and disclosed
on Exhibit O;
(d) Indebtedness of the Company to UAM Trademark, PROVIDED that
such Indebtedness is evidenced by a promissory note or notes which are
subordinated to all obligations of the Company to the Agents and the Banks
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hereunder and under the other Loan Documents in form and substance satisfactory
to the Agents and the Banks and which note or notes have been delivered to the
Collateral Agent, duly endorsed to the Collateral Agent;
(e) Indebtedness of the Company to any Subsidiary (other than
UAM Trademark) which Indebtedness, when aggregated with Indebtedness of the
Company to other Subsidiaries (other than UAM Trademark), does not exceed
$2,000,000 at any one time outstanding;
(f) Indebtedness of Barrow, Hanley, Mewhinney & Strauss, Inc. a
Nevada corporation and a Subsidiary of the Company ("BHMS") to UAM Investment
outstanding as of the Closing Date under the Non-Negotiable Note, dated July 27,
1988, made by BHM&S payable to the Company in the principal amount of
$75,000,000 and endorsed by the Company to the order of UAM Investment;
(g) Indebtedness of GSB Investment Management, Inc., a Delaware
corporation and a Subsidiary of the Company ("GSB"), to UAM Investment
outstanding as of the Closing Date under the 8.5% Note Due December 31, 2023,
dated December 31, 1993, made by GSB payable to the order of UAM Investment in
the principal amount of $27,500,000;
(h) Indebtedness of L&B Realty Advisors, Inc., a Delaware
corporation and a Subsidiary of the Company ("L&B"), to UAM Investment
outstanding as of the Closing Date under the 8.5% Note Due December 31, 2003,
dated December 17, 1993, made by L&B payable to the order of UAM Investment in
the principal amount of $27,000,000;
(i) the Heitman Permitted Indebtedness;
(j) Indebtedness of the Company in an amount not to exceed
$3,500,000 to certain guarantors of Indebtedness of Heitman to LaSalle National
Bank, pursuant to an agreement made by the Company in favor of such guarantors
to reimburse such guarantors in an amount not to exceed $3,500,000 upon the
occurrence of a payment default under the Indebtedness of Heitman to LaSalle
National Bank, the Company's obligation to make such reimbursement being
conditioned upon the prior payment in full of all amounts owing by such
guarantors of such Indebtedness;
(k) Indebtedness of a wholly-owned Subsidiary of the Company to
the Company arising out of loans made by the Company to such Subsidiary to
enable such Subsidiary to pay all or a portion of the purchase price to acquire
the assets of another Person or Persons engaged in Permitted Businesses,
provided that all promissory notes or other instruments evidencing such
Indebtedness are endorsed
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to the order of the Collateral Agent and delivered to the Collateral Agent, for
the ratable benefit of the Agent and the Banks;
(l) Indebtedness of any Subsidiary or Subsidiaries to the
Company not otherwise permitted by clause (k) of this Section 5.12 which
Indebtedness, in the aggregate, does not exceed $5,000,000 at any one time
outstanding;
(m) Indebtedness of the Company to any Bank in respect of short
term "money market" borrowings, provided that (i) the maturity of any such
borrowing shall not be less than seven (7) days nor more than ninety (90) days
from the date of such borrowing, (ii) any such borrowing shall be in a principal
amount of not less than $1,000,000 and all such borrowings from all of the Banks
outstanding at any one time shall not (A) exceed $50,000,000 in the aggregate
and (B) when aggregated with all Loans then outstanding exceed the Total
Commitment (calculated without regard to the reduction provided for in clause
(iii) below) in the aggregate, and (iii) the Total Commitment shall (except for
purposes of calculating the fee payable by the Company pursuant to Section
2.10(a)) be reduced by the aggregate amount of such borrowings outstanding at
any one time. No such borrowings shall be permitted if a Default or an Event of
Default then exists or, after giving effect to such borrowings, a Default or an
Event of Default would exist and be continuing. Immediately upon the occurrence
of any such Indebtedness, the Company and the Bank to whom such Indebtedness is
incurred shall each give written notice (sent by telecopier) to the Agent, which
notice shall state (i) the principal amount of such Indebtedness, (ii) the
maturity date of such Indebtedness and (iii) the name of such Bank; and
(n) Indebtedness of Subsidiaries of the Company (other than UAM
Holdings, UAM Trademark, UAM Investment and UAM Realty Advisors) not otherwise
permitted by clauses (a) through (m) of this Section 5.12, provided that such
Indebtedness of all Subsidiaries of the Company shall not in the aggregate at
any one time outstanding exceed an amount equal to ten percent (10%) of
Consolidated Net Worth.
5.13 LEASES. Neither the Company nor any of its Subsidiaries shall
during any calendar year, as lessee, enter into or be a lessee or tenant under
any leases of real or personal property, except for (i) capitalized leases and
(ii) leases providing for payments in any one calendar year (whether or not such
payments are termed rent) which do not result in aggregate lease payments of the
Company and its Subsidiaries in excess of $20,000,000 during any such
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calendar year, or result in aggregate lease payments in excess of $1,000,000
during any such calendar year of the Company alone.
5.14 RESTRICTION ON ENCUMBRANCES. Neither the Company nor any of its
Subsidiaries will create, incur, assume or suffer to exist any Encumbrance upon
or with respect to any of its property or assets, or assign or otherwise convey
any right to receive income, except:
(a) Encumbrances existing as of the date of this Agreement and
disclosed in accordance with Section 3.5;
(b) liens for taxes, fees, assessments and other governmental
charges to the extent that payment of the same may be postponed or is not
required in accordance with the provisions of Section 5.4;
(c) landlords' and lessors' liens in respect of rent not in
default or liens in respect of pledges or deposits under workmen's compensation,
unemployment insurance, social security laws or similar legislation, including
liens securing up to $500,000 in respect of Unfunded Vested Liabilities under
ERISA permitted by Section 5.18 (but not any other liens arising under ERISA) or
in connection with appeal and similar bonds incidental to litigation;
mechanics', laborers' and materialmen's and similar liens, if the obligations
secured by such liens are not then delinquent; liens securing the performance of
bids or tenders; and statutory liens incidental to the ordinary conduct of the
business of the Company and its Subsidiaries and which do not in the aggregate
materially detract from the value of the property of the Company or any of its
Subsidiaries, or materially impair the use thereof in the operation of their
business;
(d) judgment liens which shall not have been in existence for a
period longer than thirty (30) days after the creation thereof or, if a stay of
execution shall have been obtained, for a period longer than thirty (30) days
after the expiration of such stay;
(e) rights of lessors under capital leases;
(f) easements, rights of way, restrictions and other similar
charges or Encumbrances not interfering in a material way with the ordinary
conduct of business of the Company or any of its Subsidiaries;
(g) Encumbrances on property or assets of the Company and its
Subsidiaries to secure Indebtedness not to exceed in the aggregate $1,000,000
resulting from the deferred purchase price of such property or assets created
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in connection with the acquisition of such property or assets or the refinancing
of Indebtedness secured by Encumbrances on such property; PROVIDED, THAT with
respect to the refinancing of Indebtedness, any such Encumbrance shall not
extend to property or assets of the Company or any of its Subsidiaries not
encumbered prior to any such refinancing and any such Encumbrance shall not
secure more than the amount existing prior to such refinancing;
(h) pledges of stock of a Subsidiary of the Company incurred in
connection with an acquisition of such stock in exchange for Subordinated
Indebtedness which stock is pledged as collateral security to the sellers of
such Subsidiary in connection with such acquisition as permitted by Section
5.22;
(i) Encumbrances in favor of the Collateral Agent, the Agent or
the Banks securing Obligations to the Banks under this Agreement and the other
Loan Documents;
(j) Encumbrances set forth on Exhibit D hereto securing the
Heitman Permitted Indebtedness;
(k) Encumbrances on property or assets not constituting
Collateral of Subsidiaries of the Company (other than UAM Holdings, UAM
Trademark, UAM Investment, UAM Realty Advisors and UAM U.K. Holdings) securing
Indebtedness permitted by Section 5.12(n).
5.15 MERGER; CONSOLIDATION; SALE OR LEASE OF ASSETS. Neither the
Company nor any of its Subsidiaries shall dissolve, liquidate, merge or
consolidate into or with any other Person, or sell, lease or otherwise dispose
of a substantial portion of its assets; PROVIDED, THAT (i) any Subsidiary of the
Company may merge with and into any other Subsidiary of the Company, (ii) any
wholly-owned Subsidiary of the Company formed by the Company or a Subsidiary of
the Company for the purpose of acquiring all of the outstanding capital stock of
another corporation in accordance with the terms of this Credit Agreement may
merge with such corporation, and (iii) any Subsidiary of the Company may
dissolve, sell, liquidate or otherwise dispose of all or a substantial portion
of its assets if such assets do not represent a substantial portion of the
assets of the Company and its Subsidiaries on a consolidated basis.
5.16 ADDITIONAL STOCK ISSUANCE. The Company shall not permit or
suffer any of its Subsidiaries to issue any additional shares of its capital
stock, any options, rights, or warrants therefor or any securities convertible
into such capital stock. Neither the Company nor any of its Subsidiaries shall
sell, transfer, pledge or otherwise dispose of any of the capital stock of a
Subsidiary, except
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dispositions of such stock in connection with a transaction permitted by Section
5.15 and as permitted by Section 5.23.
5.17 INVESTMENTS, LOANS. Neither the Company nor any of its
Subsidiaries shall make any investment (by acquisition, capital contribution or
otherwise) in, or loans to, any Person, other than (i) notes, bonds or other
obligations of the United States or any agency thereof which as to principal and
interest constitute direct obligations of or are guaranteed by the United
States, (ii) certificates of deposit or other deposit instruments or accounts of
the Banks or other banks or trust companies organized under the laws of the
United States or any State thereof which have capital and surplus of at least
$500,000,000, (iii) commercial paper or finance company paper which is rated not
less than prime-one or A-1 or their equivalents by Moody's Investors Service,
Inc. or Standard & Poor's Corporation, respectively, or their successors,
(iv) any repurchase agreement secured by any one or more of the foregoing on a
fully perfected basis, (v) money market mutual funds having net assets of over
$500,000,000, (vi) investments in Subsidiaries made prior to the Closing Date,
(vii) any Subsidiary acquired after the Closing Date by the Company or a wholly-
owned Subsidiary of the Company which is engaged in Permitted Businesses, the
effect of which acquisition does not result in a Default or an Event of Default,
(viii) any wholly-owned Subsidiary formed by the Company or by a wholly-owned
Subsidiary of the Company for the purpose of acquiring the stock or assets of
any Person or Persons engaged in Permitted Businesses, (ix) investments not
otherwise permitted by clauses (i) through (viii) of this Section 5.17 as shall
be made by Murray Johnstone and its Subsidiaries which investments do not at any
time have an aggregate value in accordance with generally accepted accounting
principles in the U.K. in effect from time to time in excess of 15,000,000
pounds sterling, (x) other investments not otherwise permitted by clauses (i)
through (ix) of this Section 5.17 in an aggregate amount not to exceed at any
one time five percent (5%) of Consolidated Net Worth and (xi) loans permitted by
Section 5.12.
5.18 PLANS. The Company and each of its Subsidiaries will meet all
minimum funding requirements applicable to any Plans established or maintained
by any of them which are subject to ERISA and will at all times comply in all
material respects with the provisions of ERISA which are applicable to the
Plans. Neither the Company nor any of its Subsidiaries will permit any event or
condition to exist which could permit any Plan to be terminated under
circumstances which would cause the lien provided for in ERISA or any section
thereof (including without limitation Section 406B) to attach to the assets of
the Company or any of its Subsidiaries. The Company and its Subsidiaries will
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not permit the aggregate current value of the Plans' benefits guaranteed under
Title IV of ERISA to exceed the aggregate current value of the Plans' assets
allocable to such benefits, PROVIDED that the Company and its Subsidiaries may
incur Unfunded Vested Liabilities of up to $100,000 in the aggregate.
5.19 NOTIFICATION OF DEFAULT. Immediately upon becoming aware of the
existence of any Default or Event of Default, the Company shall give the Agents
written notice thereof specifying the nature and duration thereof and the action
being or proposed to be taken with respect thereto.
5.20 NOTIFICATION OF MATERIAL LITIGATION; MATERIAL ADVERSE CHANGE.
The Company will promptly notify the Agents in writing of any (a) litigation or
of any investigative proceedings by a governmental agency or authority commenced
or threatened against it or any of its Subsidiaries of which it has notice,
which has any reasonable possibility of having a materially adverse affect on
the business, financial condition, assets or properties of the Company and its
Subsidiaries taken as a whole, and (b) material adverse change in the business,
financial condition, assets or properties of the Company and its Subsidiaries
taken as a whole.
5.21 CHANGE IN TERMS AND PREPAYMENT OF SUBORDINATED INDEBTEDNESS. The
Company shall not:
(a) effect or permit any change in or amendment to (i) the terms
by which any Subordinated Indebtedness purports to be subordinated to the
payment and performance of the Obligations or (ii) the terms relating to the
repayment of any Subordinated Indebtedness (other than any extensions of the
date of payment therefor or any reductions in the amount thereof or in the rate
at which interest or other fees are payable to the holders thereof in connection
therewith); or
(b) directly or indirectly make any payment of any principal of
or in redemption, retirement, defeasance or repurchase of Subordinated
Indebtedness or pledge any collateral therefor, except payments required by the
instruments evidencing such Subordinated Indebtedness; PROVIDED, THAT nothing
shall preclude the Company from permitting the conversion of Subordinated
Indebtedness to equity by exercise of warrants or otherwise (in accordance with
its terms).
5.22 PLEDGED COLLATERAL. (a) At all times, Collateral consisting of
capital stock of Subsidiaries of the Company shall have an aggregate value of at
least 150% of the aggregate principal amount of Senior Indebtedness
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then outstanding. For purposes of this Section 5.22, Collateral consisting of
the capital stock of a Subsidiary of the Company will be valued at the end of
each calendar quarter (which valuation shall apply for purposes of this Section
5.22 until the next valuation date) as follows: Cash Flow of a Subsidiary for
the preceding four (4) complete consecutive calendar quarters (including the
quarter then ended) shall be multiplied by 4.25 and the product shall be
multiplied by the percentage of the total number of the issued and outstanding
shares of capital stock of such Subsidiary in which the Collateral Agent holds a
continuing perfected first priority security interest; and PROVIDED, THAT stock
of a Subsidiary shall be deemed to have zero value unless the Collateral Agent
has a continuing perfected first priority security interest in not less than 51%
of the issued and outstanding shares of all classes of such Subsidiary, and not
less than 51% of the voting stock (including at least 51% of the voting rights
attributable thereto) of such Subsidiary. Unless the Collateral Agent receives
written notice from the Company or the Agent to the contrary, the Collateral
Agent may assume without inquiry that the Collateral held by it, or in which it
has a security interest, has the value required by this Section 5.22. The
Collateral Agent need not make any independent valuation. Upon the written
request of the Required Banks (but, unless an Event of Default shall have
occurred and be continuing, in no event more than twice during any calendar
year), the Company will promptly furnish each Bank with a certificate of the
chief financial officer of the Company, in reasonable detail, verifying
compliance with this subsection (a).
(b) Upon acquiring or forming a Subsidiary, the Company or the
wholly-owned Subsidiary of the Company acquiring or forming such Subsidiary,
shall promptly pledge the capital stock of such Subsidiary to the Collateral
Agent for the ratable benefit of the Banks pursuant to such documentation as the
Required Banks may require; PROVIDED, that in any case where a Subsidiary is
acquired by the issuance of Subordinated Indebtedness representing 70% or more
of the acquisition cost, the Company or such acquiring Subsidiary may pledge to
selling stockholders that stock which bears the same relation to all stock of
such Subsidiary acquired by the Company as such Subordinated Indebtedness bears
to the entire acquisition cost; PROVIDED, FURTHER, THAT in any case where a
Subsidiary is acquired by the issuance of Subordinated Indebtedness representing
less than 70% of the acquisition cost, the Company or such acquiring Subsidiary
may pledge to selling stockholders that stock which bears the same relation to
all stock of such Subsidiary acquired by the Company as such Subordinated
Indebtedness bears to the entire acquisition cost so long as not less than 51%
of the stock of such Subsidiary, but in no
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event less than 51% of the voting stock (including at least 51% of the voting
rights attributable to all the stock of such Subsidiary) is pledged and
delivered to the Collateral Agent and creates a first priority perfected
security interest thereon; and PROVIDED, FINALLY, that the Collateral Agent, for
the ratable benefit of the Banks, shall be granted pursuant to such
documentation as the Agents may require a perfected second priority security
interest in any stock pledged to selling stockholders. In the event that a
Subsidiary is acquired or formed by a Subsidiary of the Company that is not a
Guaranty Subsidiary, such acquiring or forming Subsidiary shall execute and
deliver to the Agents and the Banks a guaranty of the Obligations of the Company
hereunder, such guaranty to be in form, scope and substance satisfactory to the
Agent.
(c) Notwithstanding anything to the contrary contained in
Subsection (b) above, provided no Default or Event of Default has occurred or
shall be continuing, (i) the Company shall not be obligated to cause the pledge
of the Capital Stock of any Subsidiary identified as a "Heitman Exempted
Subsidiary" on Exhibit K, (ii) the Company shall not be obligated to cause the
pledge of the capital stock of any Subsidiary identified as a "Murray Johnstone
Exempted Subsidiary" on Exhibit K, (iii) the Company shall not be obligated to
cause the pledge of more than sixty-five percent (65%) of the issued and
outstanding capital stock of any Subsidiary organized outside of the United
States of America, and (iv) subject to the last sentence of this Subsection (c),
the Company shall not be obligated to cause the pledge of the capital stock of
any Subsidiary acquired by the Company or any Subsidiary of the Company if the
consolidated revenues (calculated in accordance with GAAP) of the acquired
Subsidiary and its Subsidiaries for the four (4) consecutive full fiscal
quarters immediately prior to the acquisition of such Subsidiary shall not have
exceeded $1,000,000 in the aggregate. For purposes of this Subsection (c), any
such Subsidiary the capital stock of which has not been pledged as allowed by
this provision (including, without limitation, the Subsidiaries identified on
Exhibit K as "Exempted Subsidiaries" but excluding the Subsidiaries identified
on Exhibit K as "Heitman Exempted Subsidiaries", "Murray Johnstone Exempted
Subsidiaries" or "Special Exempted Subsidiaries") shall be referred to as an
"Exempted Subsidiary". The Company agrees that in the event that the aggregate
consolidated revenues (calculated in accordance with GAAP) of all Exempted
Subsidiaries and their Subsidiaries equal or exceed $5,000,000 for the four (4)
consecutive full fiscal quarters immediately preceding the date of any
determination thereof, then the Company shall immediately cause the pledge of
100% of the capital stock of a sufficient number of Exempted Subsidiaries so
that aggregate consolidated revenues (calculated in accordance
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with GAAP) for all remaining Exempted Subsidiaries and their Subsidiaries for
such four (4) fiscal quarters shall be less than $5,000,000.
(d) Except as provided in Subsection (c) above, and without
limiting the provisions of Subsection (b) above, upon the written request of the
Required Banks, the Company will from time to time cause all of the issued and
outstanding capital stock of any Subsidiary not previously pledged to the
Collateral Agent for the ratable benefit of the Banks to be so pledged pursuant
to such documentation as the Required Banks may require and, if such capital
stock is owned by a Subsidiary which is not a Guaranty Subsidiary, shall cause
such subsidiary to execute and deliver to the Agents and the Banks a guaranty of
the Obligations of the Company hereunder, such guaranty to be in form, scope and
substance satisfactory to the Agent.
5.23 RESTRICTED PAYMENTS. The Company and its Subsidiaries shall not
declare or pay any dividend on their respective capital stock or make any
payment or distribution to purchase, redeem, retire or acquire any of their
respective capital stock or any option, warrant, security convertible into stock
or other right to acquire such capital stock (collectively, "stock
repurchases"), other than, if no Default or Event of Default has occurred and is
continuing, (i) dividends payable solely in shares of their respective capital
stock, (ii) dividends payable to the Company by a Subsidiary of the Company, and
(iii) dividends declared or paid and/or stock repurchases made by the Company
which, when added to dividends declared or paid and stock repurchases made
during the reference period (as hereinbelow defined), do not exceed the lesser
of (a) consolidated net income of the Company and its Subsidiaries (determined
in accordance with GAAP) during the measuring period (as hereinbelow defined),
treated as a single accounting period and (b) 35% of Cash Flow during such
measuring period; PROVIDED, THAT payment of such dividend shall occur not later
than sixty (60) days after such declaration; and PROVIDED, FURTHER, THAT such
dividends may be paid only if such dividends are declared prior to payment
thereof. Further, the Company may, during the period commencing August 29, 1994
and ending August 29, 1995 (the "twelve month period"), so long as no Default or
Event of Default has occurred and is continuing or would as a result of such
payment or declaration occur, make payments to purchase shares of its common
stock, so long as the total of (i) the aggregate amounts paid by the Company to
purchase shares of its common stock and (ii) all dividends declared or paid by
the Company, do not in the aggregate exceed $80,000,000 during such twelve month
period. For purposes of this Section 5.23, "measuring period" means the period
of four (4) consecutive, complete calendar quarters preceding
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the first day of the calendar quarter in which the proposed dividend is to be
declared or stock repurchase is to be effected, and "reference period" means the
period of four (4) consecutive, complete calendar quarters comprising the
calendar quarter in which the dividend or dividends are declared or stock
repurchase or repurchases are effected and the three (3) calendar quarters
immediately preceding such quarter. Notwithstanding anything contained herein to
the contrary, for purposes of this Section 5.23 and solely for purposes of this
Agreement, payments made under the Revenue Sharing Agreements shall not be
deemed to be dividends, and shall be permitted to the extent otherwise permitted
under this Agreement.
5.24 CONTINGENT PAYMENTS. The Company shall not make any Contingent
Payment unless, as of the date of the making of such Contingent Payment,
Consolidated Cash Flow for the period consisting of the four (4) complete,
consecutive calendar quarters preceding such date was greater than 110% of the
sum of (i) Consolidated Debt Service as of the date of the making of such
Contingent Payment and (ii) the amount of such Contingent Payment.
5.25 TRANSACTIONS WITH AFFILIATES. Except as otherwise expressly
permitted hereunder, neither the Company nor any of its Subsidiaries shall enter
into any transaction, including, without limitation, the purchase, sale or
exchange of property or assets or the rendering of any service, with any
Affiliate, except for any transaction which is in the ordinary course of
business of the Company or any of its Subsidiaries, as the case may be, and
which is upon fair and reasonable terms no less favorable to the Company or such
Subsidiary, as the case may be, than it would obtain in an arm's-length
transaction with a Person not an Affiliate.
5.26 REVENUE SHARING AGREEMENTS. The Company shall use its best
efforts to, and shall make best efforts to cause its Subsidiaries to, comply in
all material respects with all of the terms and conditions of the Revenue
Sharing Agreements.
5.27 FURTHER ASSURANCES. The Company shall, and shall cause each
Subsidiary to, at any time and from time to time, execute and deliver such
further instruments and take such further action as may reasonably be requested
by the Agent or any Bank to effect the purposes of this Agreement, the Notes and
the other Loan Documents.
5.28 INVESTMENT IN ALDRICH, EASTMAN & WALTCH, L.P. The Company will
not, without the prior written consent of the Required Banks, (i) permit or
suffer the Investment Agreement to be amended, or (ii) make, or permit
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any Subsidiary to make, any further investment in Aldrich, Eastman & Waltch,
L.P. (whether pursuant to the Acquisition Agreement a form of which is annexed
to the Investment Agreement or otherwise) or (iii) make, or permit any
Subsidiary to make, any additional capital contributions in Aldrich, Eastman &
Waltch, L.P.
SECTION VI
DEFAULTS
6.1 DEFAULTS. There shall be an Event of Default hereunder (each an "Event of
Default") if any of the following events occur:
(a) the Company shall fail to pay (i) when due any principal of
any Loans or (ii) any interest payable hereunder or under the Notes or any fee
or expense payable hereunder or under any other Loan Document within five (5)
days of the due date therefor; or
(b) the Company shall fail to perform any covenant or agreement
contained in Sections 5.7 through 5.16, inclusive, and 5.18 through 5.27,
inclusive, of this Agreement or the Company or any Subsidiary shall fail to
perform any covenant or agreement contained in any of the other Loan Documents;
or
(c) the Company shall fail to perform any covenant contained in
Sections 5.2 through 5.6, inclusive, or 5.17 of this Agreement and such failure
shall continue for thirty (30) days after any officer of the Company has become
aware of such failure; or
(d) the Company shall fail to perform any term, covenant or
agreement (other than those referred to in Sections 6.1(a), (b) and (c) hereof)
contained in this Agreement, and such default shall continue for thirty (30)
days after notice thereof has been received by the Company from the Agent or the
Collateral Agent; or
(e) any representation or warranty of the Company or any of its
Subsidiaries made in this Agreement, the Notes, or any of the other Loan
Documents, or in any other documents or agreements executed in connection with
the transactions contemplated hereunder or thereunder or in any certificate
delivered hereunder shall prove to have been false in any material respect upon
the date when made or deemed to have been made; or
(f) At any time following December 31, 1993, there shall be a
change in the Code or regulations
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thereunder, or any revenue ruling or private letter ruling (addressed to UAM)
shall be issued by the Internal Revenue Service, if compliance by the Company
and its Subsidiaries with such change or ruling would materially and adversely
alter the basis upon which the Company or its Subsidiaries amortize intangible
assets for tax purposes; or
(g) the Company or any of its Subsidiaries shall fail to pay
when due the principal of or interest on Indebtedness having an aggregate
outstanding principal amount of at least $10,000,000, or the Company or any of
its Subsidiaries shall fail to observe or perform any covenant or agreement
contained in any agreement or instrument relating to any such Indebtedness
within any applicable grace period provided for in the agreement(s) or
instrument(s) creating or evidencing such Indebtedness, or any other event shall
occur if the effect of such failure or other event is to accelerate, or to
permit, or with the giving of notice or lapse of time or both would permit, the
holder of such Indebtedness or any other Person to accelerate the maturity of
such Indebtedness; or any such Indebtedness shall be required to be prepaid in
whole or in part prior to its stated maturity; or
(h) the Company or any of its Subsidiaries shall (i) apply for
or consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a substantial part of
its property, (ii) be generally not paying its debts as such debts become due,
(iii) make a general assignment for the benefit of its creditors, (iv) commence
a voluntary case under the Bankruptcy Code (as now or hereafter in effect),
(v) file a petition seeking to take advantage of any other law providing for the
relief of debtors, (vi) fail to contest in a timely or appropriate manner, or
acquiesce in writing to, any petition filed against it in an involuntary case
under the Bankruptcy Code, (vii) take any action under the laws of its
jurisdiction of incorporation or organization similar to any of the foregoing or
(viii) take any corporate action for the purpose of effecting any of the
foregoing; or
(i) a proceeding or case shall be commenced, without the
application or consent of the Company or any of its Subsidiaries, in any court
of competent jurisdiction, seeking (i) the liquidation, reorganization,
dissolution, winding up or composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of it or
of all or any substantial part of its assets or (iii) similar relief in respect
of it, under any law providing for the relief of debtors, and such proceeding or
case shall not be dismissed or discharged for a period of sixty (60) days; or an
order for relief shall be
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entered in an involuntary case under the Bankruptcy Code against the Company or
any of its Subsidiaries; or
(j) judgments or orders for the payment of money shall be
entered against the Company or any of its Subsidiaries by any court, or a
warrant of attachment or execution or similar process shall be issued or levied
against property of the Company or such Subsidiary which in the aggregate
exceeds $2,000,000 in value, and any such judgment, order, warrant or process
shall continue undischarged, unbonded or unstayed for thirty (30) consecutive
days; or
(k) the Company or any member of the Controlled Group shall fail
to pay when due an amount or amounts aggregating in excess of $500,000 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 $500,000 shall be filed under Title IV
of ERISA by the Company, any member of the 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 such Plan or Plans or a proceeding shall be
instituted by a fiduciary of any such Plan or Plans against the Company to
enforce Section 515 of ERISA and such proceedings shall not have been dismissed
within thirty (30) days thereafter; or a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree adjudicating that any such
Plan or Plans must be terminated.
(l) Any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by
the Securities and Exchange Commission under said Act) of 35% or more of the
Company; or, during any period of 12 months, individuals who were directors of
the Company at the beginning of such 12 month period together with individuals
who replaced existing directors through the standard rotation of board
representation among the Company's Subsidiaries cease to constitute a majority
of the board of directors of the Company; or
(m) For any reason, any Loan Document ceases to be in full force
and effect or any lien on any of the Collateral purported to be created by any
Loan Document ceases to be or is not a valid and perfected lien to the extent
and with the priority contemplated hereby or thereby.
6.2 REMEDIES ON DEFAULT. Upon the occurrence and continuance of any
Event of Default, the Agent may and, upon the request of the Required Banks, the
Agent shall, by
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notice to the Company, declare: (x) the Commitment of each Bank to be
terminated, whereupon the same shall forthwith terminate and/or (y) the
Obligations, including the Notes, all interest thereon and all other amounts
payable under this Agreement, to be forthwith due and payable, whereupon such
Obligations, all such interest and all such amounts shall become and be
forthwith due and payable without presentment, demand, protest or notice, all of
which are hereby expressly waived by the Company; PROVIDED, that if an Event of
Default specified in Section 6.1(h) or 6.1(i) shall occur, the consequences
which would occur upon the giving of notice by the Agent to the Company, as
specified in clauses (x) and (y) above, shall occur automatically without the
giving of any such notice. Upon the occurrence and during the continuance of an
Event of Default, the Agents, or either of them, as appropriate, may exercise
any and all rights and remedies under this Agreement, the Notes and the other
Loan Documents, or any other documents or agreements executed in connection with
the transactions contemplated hereunder or thereunder, or by law or equity, and
proceed to protect and enforce the Banks' rights by any action at law, suit in
equity or other appropriate proceeding, whether for specific performance or for
an injunction against a violation of any covenant contained herein, in the Notes
or in any of the other Loan Documents or in aid of the exercise of any power
granted hereby or thereby or by law. Payments under this Section 6.2, after
satisfaction of costs of collection, shall be applied PRO RATA to the
Obligations according to the respective amounts due the Banks under the Notes
and Money Market Loans.
6.3 MONEY MARKET LOANS. Any action required to be taken, approved or
requested by the Required Banks hereunder or under any of the other Loan
Documents in connection with the control, release, preservation, foreclosure or
sale or any other action relating to the Collateral or the Obligations, shall be
taken, approved or requested by the Required Banks, as determined without regard
to any Money Market Loans outstanding from any Bank. The Banks and the Agents
hereby agree that upon receipt by the Collateral Agent of any proceeds of
foreclosure or sale of Collateral, such proceeds shall be applied PRO RATA to
the Obligations outstanding according to the respective amounts due to the Banks
under the Notes and Money Market Loans but that the Banks, in their capacity as
holders of Obligations relating to Money Market Loans, shall have no further
right in connection with the control, release, preservation, foreclosure, sale
or other action relating to the Collateral or the Obligations. The right to
receive proceeds of Collateral shall extend to any assignee of any Bank of such
Bank's rights in respect of Money Market Loans. In no event shall Money Market
Loans be taken into account in determining the Required Banks.
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SECTION VII
THE AGENTS
7.1 APPOINTMENT OF AGENTS. Each Bank hereby designates Morgan as
Agent and BKB as Collateral Agent to act as herein and in the other Loan
Documents specified. Each Bank hereby authorizes, and each holder of any Note
by the acceptance of a Note shall be deemed to authorize, the Agents to take
such action on its behalf under the provisions of this Agreement, the Notes,
the other Loan Documents and any other instruments and agreements referred to
herein or therein and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of the
Agents, or either of them, by the terms hereof and thereof and such other powers
as are reasonably incidental thereto. The Agents may perform any of their duties
hereunder or thereunder by or through its agents or employees.
7.2 NATURE OF DUTIES OF AGENTS. No Agent shall have any duties or
responsibilities except those expressly set forth in this Agreement or in any of
the Loan Documents to which such Agent is a party. Neither the Agents nor any of
their respective officers, directors, employees or agents shall be liable for
any action taken or omitted by it as such hereunder or in connection herewith,
unless caused by its or their gross negligence or willful misconduct. Neither of
the Agents shall have any liability for any act or failure to act by the other.
The duties of the Agents shall be mechanical and administrative in nature; the
Agents shall not have by reason of this Agreement or the other Loan Documents a
fiduciary relationship in respect of any Bank or to each other; and nothing in
this Agreement or in the other Loan Documents, expressed or implied, is intended
to or shall be so construed as to impose upon the Agents any obligations in
respect of this Agreement or the other Loan Documents except as expressly set
forth herein or therein.
7.3 LACK OF RELIANCE ON THE AGENTS.
(a) Independently and without reliance upon the Agents, each
Bank, to the extent it deems appropriate, has made and shall continue to make
(i) its own independent investigation of the financial condition and affairs of
the Company and its Subsidiaries in connection with the taking or not taking of
any action in connection herewith and (ii) its own appraisal of the
creditworthiness of the Company and its Subsidiaries, and, except as expressly
provided in this Agreement, the Agents shall have no duty or responsibility,
either initially or on a continuing basis, to provide any Bank with any notice
or any credit or other
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information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter.
(b) The Agents shall not be responsible to any Bank for (i) any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith,
(ii) the execution (other than their own execution), effectiveness, genuineness,
validity, enforceability, collectibility, priority or sufficiency of this
Agreement, the Notes or any of the other Loan Documents, (iii) the existence,
value, collectibility or adequacy of the Collateral or the validity,
effectiveness, perfection or priority of the liens and security interests of the
Collateral Agent therein, or (iv) the financial condition of the Company or any
of its Subsidiaries, nor shall the Agents be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement or the Notes or any of the other Loan Documents,
or the financial condition of the Company, or the existence or possible
existence of any Default or Event of Default or for the filing, refiling,
recording, rerecording, registration, reregistration or continuation of this
Agreement, the Notes, the other Loan Documents, any financing or continuation
statements relating thereto, or any other instrument or document for recording
or for the giving of notice of the same or of any collateral therefor to anyone.
7.4 CERTAIN RIGHTS OF THE AGENTS. Following the occurrence and during
the continuance of an Event of Default of which the Agents have notice, the
Agents shall, subject to the provisions of this Section VII, take such action or
refrain from taking such action with respect to such Event of Default as shall
be reasonably directed in writing by the Required Banks. If either Agent shall
request instructions from the Required Banks with respect to any act or action
(including the failure to act) in connection with this Agreement or the other
Loan Documents, such Agent shall be entitled to refrain from such act or taking
such action unless and until such Agent shall have received instructions from
the Required Banks; and neither Agent shall incur liability to any Person by
reason of so refraining. Without limiting the foregoing, no Bank shall have any
right of action whatsoever against the Agents as a result of the Agents, or
either of them, acting or refraining from acting hereunder in accordance with
the instructions of the Required Banks.
7.5 RELIANCE BY AGENTS. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
statement,
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certificate, telex, teletype or telecopier message, cablegram, radiogram, order
or other teletransmission, document or communication or telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person. Each Agent may consult with legal counsel (including
counsel for the Company), independent public accountants (including those
retained by the Company) 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.
7.6 INDEMNIFICATION OF AGENTS. To the extent each Agent is not
reimbursed and indemnified to its satisfaction by the Company, each Bank will
reimburse and indemnify each Agent, in proportion to its respective Commitment,
for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including, without
limitation, counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against such
Agent in performing its duties hereunder or under the other Loan Documents, in
any way relating to or arising out of this Agreement or the other Loan
Documents; PROVIDED, THAT no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct. Each Agent shall be indemnified at the time it incurs any
such expenses or disbursements.
7.7 EACH AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its
obligation to lend under this Agreement, the Loans made by it and the Note
issued to it, each Agent shall have the same rights and powers hereunder as any
other Bank or holder of a Note and may exercise the same as though it were not
performing the duties of such Agent specified herein; and the terms "Banks",
"Required Banks", "holders of Notes" or any similar terms shall, unless the
context clearly otherwise indicates, include such Agent in its individual
capacity. Each Agent may accept deposits from, lend money to, and generally
engage in any kind of banking, trust, financial advisory or other business with
the Company or any affiliate of the Company as if it were not performing the
duties of such Agent specified herein, and may accept fees and other
consideration from the Company for services in connection with this Agreement
and otherwise without having to account for the same to the Banks.
7.8 HOLDERS OF NOTES. Each Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a written
notice of the
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assignment or transfer thereof shall have been filed with such Agent. Any
request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or notes issued in exchange therefor.
7.9 SUCCESSOR AGENTS.
(a) Each Agent may resign at any time thirty (30) days after
giving written notice thereof to the Banks, the other Agent and the Company and
may be removed at any time with cause by the Required Banks. Upon any such
resignation or removal, the Required Banks shall have the right, upon five (5)
days' notice to the Company, to appoint a successor Agent. If no successor Agent
shall have been so appointed by the Required Banks and shall have accepted such
appointment, within thirty (30) days after the retiring Agent's giving of notice
of resignation or the Required Banks' removal of the retiring Agent, then, upon
five (5) days' notice to the Company and the other Agent, the retiring Agent
may, on behalf of the Banks, appoint a successor Agent, which shall be a bank
which maintains an office in the United States, or a commercial bank organized
under the laws of the United States or of any State thereof, or any Affiliate of
such bank, having a combined capital and surplus of at least $50,000,000.
(b) Upon the acceptance in writing of any appointment as Agent
hereunder by a successor agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Section VII shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
SECTION VIII
MISCELLANEOUS
8.1 NOTICES. Unless otherwise expressly provided herein or in another Loan
Document, all notices, requests and other communications to any party hereunder
or thereunder shall be in writing (including bank wire, telex, telecopy or
similar teletransmission or writing) and shall be given to such party at its
address, telex or telecopy number set forth on the signature pages hereof or
such other address or telex number as such party may hereafter specify by notice
to the
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Agents and the Company. Each such notice, request or other communication shall
be effective (i) if given by telex or telecopy, when such telex or telecopy is
transmitted to the telex or telecopy number specified in this Section and the
appropriate answerback is received, (ii) if given by mail, seventy-two (72)
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other means
(including, without limitation, by air courier), when delivered at the address
specified in this Section; provided that if any day on which any notice, request
or other communication would otherwise be effective pursuant to the immediately
preceding clauses (i) through (iii) is not a Business Day, then such notice,
request or other communication shall be effective on the next succeeding
Business Day; and provided, further, that notices to the Agents, or either of
them, shall not be effective until received.
8.2 EXPENSES AND INDEMNITY. The Company shall,
(a) whether or not the transactions hereby contemplated are
consummated, pay on demand all reasonable out-of-pocket costs and expenses of
each of the Agents (and after a Default, the Banks) in the administration (both
before and after the execution hereof and including advice of counsel as to the
rights and duties of each Agent and the Banks with respect thereto) of, and, in
connection with the preparation, execution and delivery of, preservation of
rights under, enforcement of, and, after a Default, refinancing, renegotiation
or restructuring of, this Agreement, the Notes, the other Loan Documents and the
other documents and instruments referred to herein or therein and any amendment,
waiver or consent relating thereto (including, without limitation, the
reasonable fees and disbursements of counsel, including allocated costs of
internal counsel, for each of the Agents and in the case of enforcement or
exercise of any right of any of the Banks);
(b) pay on demand and hold each of the Agents and the Banks
harmless from and against any and all present and future stamp and other similar
taxes with respect to the foregoing matters and save each of the Agents and the
Banks harmless from and against any and all liabilities with respect to or
resulting from any delay or omission to pay such taxes;
(c) indemnify each of the Agents and each Bank, its officers,
directors, employees, representatives and agents from, and hold each of them
harmless against, any and all costs, losses, liabilities, claims, damages,
settlement costs and expenses incurred by any of them (whether or not any of
them is designated a party thereto) arising out of or by reason of any
investigation, litigation
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or other proceeding (including, without limitation, responding to a subpoena or
other process) related to any actual or proposed use by the Company or any
Subsidiary of the proceeds of any of the Loans or to any breach by the Company
or any of its Subsidiaries of any representations, warranties, covenants or
agreements contained in this Agreement, the Notes or any other Loan Document,
including, without limitation, the reasonable fees and disbursements of counsel
(including allocated costs of internal counsel) incurred in connection with any
such investigation, litigation or other proceeding; and
(d) indemnify each of the Agents and each Bank, its officers,
directors, employees, representatives and agents from, and hold each of them
harmless against, any and all liabilities, losses, claims, damages, costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses, consultant fees, investigation and laboratory fees), imposed upon or
incurred by or asserted against any of them, by reason of (A) the presence,
disposal, escape, seepage, leakage, spillage, discharge, emission, release, or
threatened release of any Hazardous Materials on, from, or affecting any past,
present or future property of the Company or any of its Subsidiaries; (B) any
personal injury (including wrongful death) or property damage (real or personal)
arising out of or related to such Hazardous Materials; (C) any lawsuit or
investigation brought or threatened, settlement reached, or government order
relating to such Hazardous Materials; or (D) any violation of any law, order,
regulation, requirement or demand of any government authority relating to
Hazardous Materials at, or discharged from, any past, present or future property
of the Company or any of its Subsidiaries. For purposes of this subsection,
"Hazardous Materials" shall include, without limitation, any explosives,
radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic
substances, or related materials, asbestos or any material containing asbestos
or any substances which are hazardous by virtue of the manner of their use, or
any activity involving any of the foregoing or any other substance or material
or activity defined as hazardous in words or substance by any present or future
Federal, state or local environmental law, ordinance, rule or regulation
including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liabilities Act of 1980 (42 U.S.C. Sections 9601, et seq.),
the Hazardous Materials Transportation Act (49 U.S.C. Sections 1801, et seq.),
the Resource Conversation and Recovery Act of 1976 (42 U.S.C. Sections 6901 et
seq.), the Clean Air Act (42 U.S.C. Sections 7401 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. Section 1251, et seq.) and the Toxic Substances
Control Act (15 U.S.C. Sections 2601, et seq.) (all of the foregoing as amended
at any time) and in the
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regulations adopted and publications promulgated pursuant to each of the
foregoing or in any judicial or quasi-judicial determination relating to any of
the foregoing. If and to the extent that the obligations of the Company under
this Section 8.2 are unenforceable for any reason, the Company hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
(e) The Company's obligations under this Section 8.2 shall
survive any termination of this Agreement or the other Loan Documents and the
payment of the Notes.
8.2 SET-OFF. To secure payment and performance of all Obligations,
the Company grants each Agent and each of the Banks, and each bank or other
entity (a "Participant") which may purchase a participation in any Bank's Loans,
a security interest in all deposits, balances or other sums now or hereafter
credited by or due from an Agent, any Bank or any such Participant to the
Company and in any securities or other property now or hereafter in the
possession of or standing in the name of an Agent, any Bank or any such
Participant. Any such deposits, balances or other sums credited by or due from
an Agent, any Bank or any such Participant to the Company and any such
securities or other property may, upon the occurrence of an Event of Default, or
at any time thereafter, without notice to the Company or compliance with any
other condition precedent now or hereafter imposed by statute, rule of law or
otherwise (all of which are hereby expressly waived), and regardless of the
adequacy of any collateral security securing the Obligations, be set-off,
appropriated, and applied by such Agent, such Bank or any such Participant
against any and all Obligations of the Company to the Agents and Banks,
PROVIDED, however, that the right of a Participant to so set-off shall be
subject to such Participant applying the proceeds of such set off in accordance
with Section 8.4 as if it were a "Bank" hereunder.
8.4 APPLICATION OF SET-OFFS. Each Bank agrees with each other Bank
that (a) if any deposit or other sum credited by or due from such Bank to the
Company is applied to Indebtedness of the Company to such Bank, other than
indebtedness evidenced by the Notes, such amount shall be applied ratably to
such other Indebtedness and to the Indebtedness evidenced by such Notes and
(b) if such Bank (i) shall receive from the Company, whether by distributions
made by an Agent, voluntary payment, exercise of the right of set-off,
counterclaim, cross action or enforcement of any claim evidenced by such Notes
or by proof thereof in bankruptcy, reorganization, liquidation, receivership or
similar proceedings, or otherwise, and (ii) shall retain and apply to the
payment of the Note held by such Bank any
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amount in excess of its ratable portion of the payments received by all of the
Banks with respect to all such amounts as contemplated hereby, such Bank will
make such disposition and arrangements with the other Banks with respect to such
excess, either by way of distribution, PRO TANTO assignment of claims,
subrogation or otherwise, as shall result in each such Bank receiving in respect
of the Note held by each such Bank its proportionate payment as contemplated
hereby, subject to Section 2.17.
8.5 TERM OF AGREEMENT. This Agreement shall continue in force and
effect so long as the Total Commitment, any Loan or any Obligation shall be
outstanding and thereafter as to any obligation of the Company stated to survive
the termination of this Agreement.
8.6 CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise expressly
set forth in any particular provision of this Agreement, any consent or approval
required or permitted by this Agreement to be given by the Banks may be given,
and any term of this Agreement, the Notes, the other Loan Documents or of any
other instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Company or any Subsidiary of any term of this
Agreement, the Notes, or the other Loan Documents may be waived (either
generally or in a particular instance and either retroactively or prospectively)
with, but only with, the written consent of the Required Banks; PROVIDED, THAT
without the written consent of those Banks which hold 100% of the aggregate
outstanding principal amount of all Loans or, if no such principal amount is
then outstanding, Banks having one hundred percent (100%) of the Total
Commitment,
(i) no reduction in the principal amount of, interest rate on,
or commitment fee relating to, Loans shall be made;
(ii) no extension or postponement of the stated time (including,
without limitation, the Conversion Date and the Termination Date) of payment or
prepayment of the principal amount of, interest on, or commitment fee relating
to, the Loans shall be made;
(iii) except as contemplated by Section 8.7, no extension or
increase of the Total Commitment or Commitment Amount shall be made and no
change to any Commitment Percentage shall be made;
(iv) no amendment to this Section 8.6 or to Section 6.2 shall be
made;
(v) no Collateral shall be released; and
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(vi) no Guaranty Subsidiary shall be released from its guaranty
of the Obligations.
The provisions of Section VII of this Agreement shall not be amended or
otherwise modified without the prior written consent of the Agents. No waiver
shall extend to or affect any obligation not expressly waived or impair any
right consequent thereon. No course of dealing or delay or omission on the part
of any Bank in exercising any right shall operate as a waiver thereof or
otherwise be prejudicial thereto. No notice to or demand upon the Company or any
of its Subsidiaries shall entitle the Company or any such Subsidiary to other or
further notice or demand in similar or other circumstances.
8.7 BENEFIT OF AGREEMENT.
(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto, provided that the Company may not assign or transfer any of its
interest hereunder without the prior written consent of the Banks.
(b) Any Bank may make, carry or transfer Loans at, to or for the
account of, any of its branch offices or the office of an Affiliate of such
Bank.
(c) Any Bank may, with the written consent of the Company (which
consent will not be unreasonably withheld or delayed) assign any or all of its
rights and delegate any or all of its obligations under this Agreement
(including, without limitation, to an Affiliate of such Bank of the type
described in clause (i) of the definition of Affiliate, in which case the
consent of the Company shall not be required) provided that each such assignment
is in an amount of at least $5,000,000 and in an integral multiple of $1,000,000
and further may (without such consent) sell participation in, all or any part of
any Loan or Loans made by it or its Commitment or any other interest herein or
in its Note to another bank or other Person, in which event (i) in the case of
an assignment, upon notice thereof by such Bank to the Company and the Agents
and the written consent of the Company (which consent will not be unreasonably
withheld or delayed), the assignee shall have, to the extent of such assignment
(unless otherwise provided therein), the same rights and benefits as it would
have if it were a Bank hereunder and the holder of a Note and, if the assignee
has expressly assumed, for the benefit of the Company, the Banks and the Agents,
the assignor Bank's obligations hereunder, such assignor Bank shall be relieved
of its obligations hereunder to the extent of such assignment and assumption,
and (ii) in the case of a participation, the participant shall not have any
rights
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under this Agreement or any Note or any other document delivered in connection
herewith (the participant's rights against such Bank in respect of such
participation to be those set forth in the agreement executed by such Bank in
favor of the participant relating thereto) and all amounts payable by the
Company under Sections 2.14 and 2.16 hereof shall be determined as if the Bank
had not sold such participation. No participation agreement or similar
arrangement entered into by any Bank in respect of the Commitments, the Notes,
the Loans or any interest thereon shall, directly or indirectly, require that
such Bank obtain the consent of its participant to any action, inaction,
amendment, waiver or consent of or under this Agreement or the Notes other than
those amendments, waivers and consents referred to in Section 8.6 which are
required to be in writing and signed by all of the Banks. Any Bank may furnish
any information concerning the Company in the possession of such Bank from time
to time to Affiliates of such Bank and to assignees and participants (including
prospective assignees and participants), PROVIDED, HOWEVER, that the furnishing
of such information (and the nature, manner and extent thereof) by any Bank to
its Affiliates and such assignees and participants shall be governed by the
relevant agreement, assignment or participation agreement relating to such
arrangement, assignment or participation, as the case may be and that the
recipient thereof shall agree to be bound by the confidentiality provisions of
Section 8.17.
(d) Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Note to a Federal Reserve Bank. No such
assignment to a Federal Reserve Bank shall release the transferor Bank from its
obligations hereunder.
(e) THIS AGREEMENT, AND THE OTHER LOAN DOCUMENTS AND ALL OTHER
INSTRUMENTS EXECUTED SIMULTANEOUSLY HEREWITH CONSTITUTE ALL THE RIGHTS,
INTERESTS, UNDERSTANDINGS, AGREEMENTS AND OBLIGATIONS OF WHATSOEVER KIND AND
NATURE EXISTING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER
HEREOF, AND SUPERSEDE ALL PREVIOUS AGREEMENTS AMONG THE PARTIES HERETO, WHETHER
WRITTEN OR ORAL. THE COMPANY MAY NOT USE EVIDENCE OF ANY PRIOR ORAL AGREEMENT OR
OF A CONTEMPORANEOUS ORAL AGREEMENT TO CONTRADICT OR SUPPLEMENT THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS OR ANY OTHER INSTRUMENTS EXECUTED SIMULTANEOUSLY
HEREWITH.
8.8 SURVIVAL. The Company's obligations under Sections 2.14, 2.16 and
8.2 shall survive the payment in full of the Notes after the Termination Date.
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8.9 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER, UNDER THE NOTES AND UNDER THE OTHER LOAN DOCUMENTS SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN
SUCH STATE.
8.10 JURISDICTION. Any action or proceeding in connection with this
Agreement, the Notes, or the other Loan Documents may be brought against the
Company or, if against the Agent, shall be brought, in a court of record of the
State of New York, County of New York, or in the United States District Court
for the Southern District of New York, sitting in New York, New York, the
Company hereby consenting to the jurisdiction thereof over its person; and
service of process may be made upon the Company by mailing a copy of the summons
and any complaint to the Company, by registered mail, at the address to be used
for the giving of notice to the Company under this Agreement, such service to be
effective ten (10) days after the mailing thereof. In any action or proceeding
relating to this Agreement, the Notes or the other Loan Documents, the Company
hereby waives any claim that New York County or the Southern District of New
York is an inconvenient forum.
8.11 NO THIRD PARTY RIGHTS. This Agreement is solely for the benefit
of the parties hereto and their respective successors and assigns, and no other
Person shall have any right, benefit, priority or interest under, or because of
the existence of, this Agreement.
8.12 COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument and all such counterparts shall taken together
constitute one instrument.
8.13 PARTIAL INVALIDITY. The invalidity or unenforceability or any
one or more phrases, clauses or sections of this Agreement shall not affect the
validity or enforceability of the remaining portions of it.
8.14 TABLE OF CONTENTS AND CAPTIONS. The Table of Contents and
captions and headings of the various sections and subsections of this Agreement
are provided for convenience only and shall not be taken into account to
interpret or modify the meaning of such sections or subsections.
8.15 EFFECTIVENESS. Subject to Section 4.1, this Agreement shall
become effective on the date on which all of the parties hereto shall have
signed a copy hereof (whether the same or different copies) and shall have
delivered the
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same (or its signature page therefor) to the Agent by delivery or by telecopy.
8.16 PLEDGED STOCK. Notwithstanding anything contained in this
Agreement or in any other Loan Document to the contrary, any and all shares of
capital stock of any Subsidiary of the Company incorporated as a Delaware
corporation pledged to the Collateral Agent pursuant to the terms of this
Agreement and the other Loan Documents shall be issued, and registered of record
on the books of each such Subsidiary, in the name of the Collateral Agent or a
nominee selected by the Collateral Agent.
8.17 CONFIDENTIALITY. Each Bank agrees to exercise reasonable efforts
to keep confidential any written information delivered or made available by the
Company or any of its Subsidiaries to such Bank in connection with this
Agreement; PROVIDED that nothing herein shall prevent any Bank from disclosing
such information (i) to any other Bank, (ii) to its officers, directors,
employees, agents, attorneys and accountants, (iii) upon the order of any court
or administrative agency, (iv) upon the request or demand of any regulatory
agency or authority having jurisdiction over such Bank, (v) which has been
publicly disclosed, (vi) in connection with any litigation to which the Agent,
the Collateral Agent or any Bank or their respective affiliates may be a party,
(vii) in connection with the exercise of any remedy hereunder, (viii) to such
Bank's legal counsel and independent auditors, and (ix) to any actual or
proposed participant or assignee of all or part of its rights hereunder which
has agreed in writing to be bound by the provisions of this Section 8.17.
8.18 WITHHOLDING TAX EXEMPTION. Not later than the Closing Date or,
in the case of any bank or financial institution that becomes a Bank after the
Closing Date, the date of the instrument of assignment or other instrument
pursuant to which such bank or financial institution became a Bank, and annually
thereafter or at such other times as the Agent, the Collateral Agent or the
Company may request, each Bank organized under the laws of a jurisdiction
outside the United States (a "Non-US Bank") shall provide the Agent, the
Collateral Agent and the Company with duly completed copies of Form 1001 or Form
4224, or, in the case of a Non-US Bank claiming exemption from United States
withholding taxes under Section 871(h) and 881(c) of the Code with respect to
payments of "portfolio interest", a Form W-8, or, in each case, any successor
form prescribed by the Internal Revenue Service of the United States (and, if
such Non-US Bank delivers a form W-8, a certificate representing that such Non-
US Bank is not a bank for purposes of Section 881(c) of the Code, is not a 10-
percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of
the
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Company and is not a controlled foreign corporation related to the Company
(within the meaning of Section 864(d)(4) of the Code)), certifying as to such
Bank's status as exempt from United States withholding taxes with respect to all
payments to be made to such Bank hereunder or other documents satisfactory to
the Company, the Agent and the Collateral Agent indicating that all payments to
be made to such Bank hereunder are not subject to such taxes (an "Exemption
Certificate"). In the case of payments to be made by the Company, the Agent or
the Collateral Agent to or for any Bank organized under the laws of a
jurisdiction outside the United States, unless the Company, the Agent or the
Collateral Agent, as the case may be, has received the Exemption Certificate
from such Bank in accordance with this Section, the Company, the Agent or the
Collateral Agent, as the case may be, may withhold taxes from such payments at
the maximum applicable statutory rate.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
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8.19 WAIVER OF JURY TRIAL. IN ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS, THE PARTIES HERETO
HEREBY MUTUALLY WAIVE TRIAL BY JURY, INCLUDING WITH RESPECT TO ANY COUNTERCLAIM.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers as of the day and year first above
written.
One International Place UNITED ASSET MANAGEMENT
100 Oliver Street CORPORATION
Boston, MA 02110
Attn: William H. Park,
By:________________________
Senior Vice President Title:
Telecopier No.: (617) 330-1133
Lending Office: MORGAN GUARANTY TRUST
Morgan Guaranty Trust Company COMPANY OF NEW YORK,
of New York as Bank and as Agent
c/o J.P. Morgan Services Inc.
500 Stanton Christiana Road By:_________________________
P.O. Box 6070 Title:
Newark, Delaware 19713-2107
Telex No.: 177425
Answerback: MBDEL UT
Telecopier Nos.: (302) 992-1852
(302) 992-1872
Address for Notices:
Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, New York 10260
Attn: Crescent G. Sancilio
Telex No.: 177615
Answerback: MGTUT
Telecopier Nos.: (212) 648-5022
(212) 648-5023
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Lending Office and Address THE FIRST NATIONAL BANK
for Notices: OF BOSTON, as a Bank
THE FIRST NATIONAL BANK OF
BOSTON
100 Federal Street By:___________________________
01-06-11 Title:
Boston, MA 02110
Attn: Mitchell B. Feldman
Telex No.: 4996527
Answerback: BKB BOSTON
Telecopier No.: (617) 434-0637
With a Copy to:
The Loan Department
100 Federal Street
05-02-00-B
Boston, MA 02110
Attn: Betty Drake
Telecopier No.: (617) 929-6912
Blue Hills Office Park THE FIRST NATIONAL BANK
150 Royall Street OF BOSTON, as Collateral
Canton, MA 02021 Agent
Attn: Corporate Trust Div.
Mail Stop 45-02-15
(United Asset Management By:__________________________
Corporation 1992 Title:
Collateral Agency)
Telecopier No.: (617) 575-2078
Lending Office: MELLON BANK, N.A.
Mellon Bank, N.A.
3 Mellon Bank Ctr.
Loan Administration Section By:________________________
Room 2304 Title:
Pittsburgh, PA 15259-0003
Attn: Rochele Cantini
Telecopier No.: (412) 236-2028
-75-
<PAGE>
Address for Notices:
To Lending Office above,
with a copy to:
Mellon Bank N.A.
1 Mellon Bank Center
Room 370
Pittsburg, PA 15258
Attn: Susan Whitewood
Officer
Telecopier No.: (412) 234-8087
Lending Office and Address DEUTSCHE BANK AG, NEW YORK
for Notices: BRANCH and/or CAYMAN ISLANDS
Deutsche Bank A.G. BRANCH
New York Branch/Cayman
Islands Branch
31 West 52nd Street By:__________________________
New York, New York 10019 Title:
Attn: Jon Mendes
Associate
Telecopier No.: (212) 474-8108 By:__________________________
Title:
Lending Office and Address CHEMICAL BANK
for Notices:
4 New York Plaza
New York, New York 10004-2477
Attn: Darrell W. Crate By:___________________________
Telecopier No.: (212) 623-4817 Title:
Lending Office: CREDIT LYONNAIS NEW YORK
1301 Avenue of the Americas BRANCH
New York, New York 10019
Addresses for Notices: By:__________________________
Credit Lyonnais Title:
53 State Street
Boston MA 02109
Attn: Lisa Turilli
Telecopier No.: (617) 723-4803
Lending Office: CREDIT LYONNAIS CAYMAN ISLAND
c/o Credit Lyonnais New York BRANCH
Branch
1301 Avenue of the Americas
New York, New York 10019 By:__________________________
Authorized Signature
-76-
<PAGE>
Address for Notice:
Credit Lyonnais
53 State Street
Boston, MA 02109
Attn: Lisa Turilli
Telecopier No.: (617) 723-4803
Lending Office and Address SHAWMUT BANK, N.A.
for Notices:
Shawmut Bank, N.A.
One Federal Street By:_______________________
Boston, Massachusetts 02211 Title:
Attn: Eileen P. Murphy
Vice President
Telex No.: 681-7133
Answerback: SHAWMUT-BSN
Telecopier No.: (617) 292-2095
Lending Office and Address NATIONSBANK, N.A. (formerly
for Notices: known as NationsBank of
NationsBank, N.A. Maryland, N.A., successor
10 Light Street by merger to Maryland
Mailstop MD4-302-16-07 National Bank)
Baltimore, Maryland 21201
Attn: Christopher A. Pope
Vice President By:__________________________
Telex No.: 198115 Title:
Answerback: MNB OP UT
Telecopier No.: (410) 337-8506
Lending Office and Address BANK HAPOALIM B.M.
for Notices:
Bank Hapoalim B.M.
70 Federal Street By:_______________________
Boston, Massachusetts 02110 Title:
Attn: Henrietta Amadon
Telecopier No.: (617) 542-0015 By:_______________________
Title:
-77-
<PAGE>
Lending Office: THE DAIWA BANK, LIMITED
The Daiwa Bank, Limited
233 South Wacker Drive
Suite 5400 By:__________________________
Chicago, Illinois 60606 Title:
Address for Notices:
The Daiwa Bank, Limited By:__________________________
1 Post Office Square Title:
Suite 3820
Boston, Massachusetts 02109
Attn: Daniel G. Eastman
Vice President
Telecopier No.: (617) 423-4884
Lending Office and Address FLEET BANK OF MASSACHUSETTS
for Notices:
Fleet Bank of Massachusetts
75 State Street By:__________________________
Boston, Massachusetts 02109 Title:
Attn: Greg Dormitzer
Group Manager
Telecopier No.: (617) 346-1558
Lending Office and BAYBANK BOSTON, N.A.
Address for Notices:
BayBank Boston, N.A.
175 Federal Street, 10th Floor By:_______________________
Boston, Massachusetts 02110 Title:
Attn: Virginia Ryan
Vice President
Telecopier No.: (617) 556-6594
and, in case of Notice of Borrowing,
with a copy to:
Shohak Dekermendjian
BayBank Associates
3 University Office Park
Waltham, Massachusetts 02154
Reference: United Asset Management
Telecopier No.: (617) 788-3988
-78-
<PAGE>
Lending Office and Address WACHOVIA BANK OF GEORGIA, N.A.
for Notices:
Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E. By:___________________________
Atlanta, Georgia 30303 Title:
Attn: Elizabeth Colt
Assistant Vice President
Telex No.: 542553
Answerback: WACHFEX-ATL
Telecopier No.: (404) 332-6898
Lending Office and Address per pro BROWN BROTHERS
for Notices: HARRIMAN & CO.
Brown Brothers Harriman
& Co.
40 Water Street By:__________________________
Boston, Massachusetts 02109 Title:
Attn: Louise A. Coughlan,
Deputy Manager
Telex No.: 4430048
Answerback: BROWNHAR BSN
Telecopier No.: (617) 589-3178
-79-
<PAGE>
EXHIBIT A
TO AMENDED AND
RESTATED CREDIT AGREEMENT
COMMITMENTS
<TABLE>
<CAPTION>
Commitment
Bank Commitment Percentage
---- ---------- ----------
<S> <C> <C>
Morgan Guaranty Trust Company
of New York $42,500,000 10.625
The First National Bank
of Boston $42,500,000 10.625
Mellon Bank, N.A. $40,000,000 10.000
Deutsche Bank AG, New York
Branch/Cayman Islands Branch $40,000,000 10.000
Chemical Bank $30,000,000 7.500
Credit Lyonnais $30,000,000 7.500
Shawmut Bank, N.A. $30,000,000 7.500
NationsBank, N.A. $30,000,000 7.500
Bank Hapoalim B.M. $25,000,000 6.250
Fleet Bank of Massachusetts $25,000,000 6.250
The Daiwa Bank, Limited $20,000,000 5.000
BayBank Boston, N.A. $20,000,000 5.000
Wachovia Bank of Georgia, N.A. $20,000,000 5.000
Brown Brothers Harriman & Co. $ 5,000,000 1.250
</TABLE>
<PAGE>
EXHIBIT B
TO AMENDED
AND RESTATED
CREDIT AGREEMENT
GUARANTY AND SECURITY DOCUMENTS
CONFIRMATION AND AMENDMENT
GUARANTY AND SECURITY DOCUMENTS CONFIRMATION AND AMENDMENT, dated as of
August 29, 1994 ("this Agreement"), made by UNITED ASSET MANAGEMENT CORPORATION,
a Delaware corporation (the "Company"), UNITED ASSET MANAGEMENT HOLDINGS, INC.,
a Delaware corporation ("UAM Holdings"), UNITED ASSET MANAGEMENT TRADEMARK,
INC., a Delaware corporation ("UAM Trademark"), UAM INVESTMENT CORPORATION, a
Delaware corporation ("UAM Investment"), DEWEY SQUARE INVESTORS CORPORATION, a
Delaware corporation ("DSI"), HEITMAN FINANCIAL LTD., an Illinois corporation
("Heitman"), UNITED ASSET MANAGEMENT U.K. HOLDINGS, INC., a Delaware corporation
("UAM U.K. HOLDINGS") and UAM REALTY ADVISORS INVESTMENT CORPORATION, a Delaware
corporation ("UAM Realty Advisors"; UAM Holdings, UAM Trademark, UAM Investment,
DSI, Heitman, UAM U.K. Holdings and UAM Realty Advisors, each a "Guaranty
Subsidiary" and collectively, the "Guaranty Subsidiaries") in favor of the
"Banks" and the "Agents" (as defined below).
R E C I T A L S
A. The Company, the "Banks" parties thereto (the "Existing Banks"), Morgan
Guaranty Trust Company of New York, as Agent (in such capacity, the "Agent"),
and The First National Bank of Boston, as Collateral Agent (in such capacity,
the "Collateral Agent" and together with the Agent, the "Agents") are parties to
the Credit Agreement, dated as of May 18, 1992 (as heretofore amended,
supplemented or otherwise modified, the "Original Credit Agreement").
B. Concurrently with the execution of this Agreement, the Company, the
Existing Banks, certain additional banks or other financial institutions (the
Existing Banks and such additional banks and financial institutions, the
"Banks"), the Agent and the Collateral Agent are entering into an Amended and
Restated Credit Agreement dated as of the date hereof (as the same may be
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), which amends and restates the Original Credit Agreement in its
entirety.
<PAGE>
C. It is a condition precedent to the effectiveness of the Credit
Agreement and to the obligation of the Banks to make their initial Loans
thereunder that the Company and each of the Guaranty Subsidiaries shall have
executed and delivered this Agreement.
NOW, THEREFORE, it is agreed as follows:
1. Unless the context otherwise requires, capitalized terms used
herein without definition shall have the meanings given to such terms in the
Credit Agreement.
2. The term "Banks" as defined in each of the Security Documents, the
Subsidiaries Guaranty, the DSI Guaranty, the UAM Realty Advisors Guaranty, the
Heitman Guaranty, the UAM U.K. Holdings Guaranty and the Trademark Subordination
Agreement (collectively, the "Documents") shall include all banks and other
financial institutions from time to time parties to the Credit Agreement as
"Banks".
3. All references in the Documents to "the Agreement" or "the Credit
Agreement" shall refer to the Credit Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
4. Without limitation of any of the terms of the Documents, the
Company and each Guaranty Subsidiary hereby confirms and agrees that the terms
"Obligations" and "Guaranteed Obligations" as used in the Documents shall
include all of the "Obligations" as such term is defined in the Credit
Agreement.
5. Each of the Guaranty Subsidiaries hereby acknowledges receipt of a
copy of the Credit Agreement and of each agreement, instrument or document
delivered in connection therewith on the Closing Date.
6. Schedule A to the Pledge Agreement is hereby amended to read in
its entirety as set forth on Exhibit A hereto.
7. Paragraph (A) of the Schedule attached to the UAM U.K. Holdings
Pledge Agreement is hereby amended to delete the number "4,859,483" contained
therein and to replace it with the number "5,260,035."
8. Clause (iii) of the first sentence of Section 4(c)of the
Subsidiaries Guaranty is hereby amended to read in its entirety as follows:
"(iii) in the case of UAM Investment, holding
the promissory notes referred to in subsections
(f), (g) and (h) of Section 5.12 of the Credit
Agreement,
-2-
<PAGE>
as each may be amended with the consent of the
Required Banks."
9. The amendments set forth herein are limited precisely as written
and shall not be deemed to (i) be an amendment to or waiver of any other term or
condition of the Documents or any of the instruments and documents referred to
therein, or (ii) prejudice any right or rights which the Agents or the Banks may
now have or may have in the future under or in connection with the Documents, as
amended, or any of the instruments and documents referred to therein. Except as
expressly modified hereby or pursuant hereto, the terms and provisions of the
Documents and the instruments and documents referred to therein shall remain in
full force and effect, and, as so modified, are hereby ratified and confirmed.
10. This Agreement is the Confirmation and Amendment referred to in
the Credit Agreement. All guaranties, liens and security interests made or
granted by the Company or any Guaranty Subsidiary pursuant to the Documents are
hereby ratified and confirmed.
11. This Agreement may be signed in any number of separate
counterparts, each of which shall constitute an original instrument and all of
which taken together shall constitute one and the same instrument, with the same
force and effect as if the signatures of all the parties hereto were on a single
instrument.
12. The Company and each of the Guaranty Subsidiaries hereby
represents and warrants that (i) it has the right, power and capacity and has
been duly authorized and empowered by all required corporate and shareholder
action to enter into, execute, deliver and perform this Agreement; (ii) this
Agreement constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, except as enforcement thereof may be
subject to the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors' rights generally and general
principles of equity (regardless of whether such enforcement is sought in a
proceeding in equity or at law); (iii) the execution, delivery and performance
of this Agreement do not and will not violate any provision of its certificate
of incorporation or by-laws or any contractual provision to which it is a party
or to which it or any of its property is subject; and (iv) all representations
and warranties contained in the Documents (as amended by this Agreement) are
true and correct in all material respects with the same effect as though such
representations and warranties has been made on and as of the date hereof.
13. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
UNITED ASSET MANAGEMENT CORPORATION
By:______________________________________
Title:
UNITED ASSET MANAGEMENT HOLDINGS, INC.
By:______________________________________
Title:
UNITED ASSET MANAGEMENT TRADEMARK, INC.
By:______________________________________
Title:
UAM INVESTMENT CORPORATION
By:______________________________________
Title:
DEWEY SQUARE INVESTORS CORPORATION
By:______________________________________
Title:
HEITMAN FINANCIAL LTD.
By:______________________________________
Title:
UNITED ASSET MANAGEMENT U.K. HOLDINGS, INC.
-4-
<PAGE>
By:______________________________________
Title:
UAM REALTY ADVISORS INVESTMENT CORPORATION
By:______________________________________
Title:
AGREED:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as a Bank and as Agent
By:____________________________________
Title:
THE FIRST NATIONAL BANK OF BOSTON,
as Collateral Agent
By:____________________________________
Title:
THE FIRST NATIONAL BANK OF BOSTON,
as a Bank
By:____________________________________
Title:
MELLON BANK, N.A.
By:____________________________________
Title:
-5-
<PAGE>
DEUTSCHE BANK AG NEW YORK
BRANCH and/or CAYMAN ISLANDS BRANCH
By:____________________________________
Title:
By:____________________________________
Title:
CHEMICAL BANK
By:____________________________________
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By:____________________________________
Title:
CREDIT LYONNAIS CAYMAN ISLAND
BRANCH
By:____________________________________
Authorized Signature
SHAWMUT BANK, N.A.
By:____________________________________
Title:
NATIONSBANK, N.A. (formerly known as
NationsBank of Maryland, N.A., successor
by merger to Maryland National Bank)
By:____________________________________
Title:
-6-
<PAGE>
BANK HAPOALIM B.M.
By:____________________________________
Title:
By:____________________________________
Title:
FLEET BANK OF MASSACHUSETTS
By:___________________________________
Title:
THE DAIWA BANK, LIMITED
By:____________________________________
Title:
By:____________________________________
Title:
BAYBANK BOSTON, N.A.
By:____________________________________
Title:
WACHOVIA BANK OF GEORGIA, N.A.
By:____________________________________
Title:
-7-
<PAGE>
per pro BROWN BROTHERS HARRIMAN
& CO.
By:____________________________________
Title:
-8-
<PAGE>
EXHIBIT A TO
CONFIRMATION AND AMENDMENT
SCHEDULE A TO PLEDGE AGREEMENT BY AND BETWEEN
UNITED ASSET MANAGEMENT CORPORATION AND THE
FIRST NATIONAL BANK OF BOSTON, AS COLLATERAL AGENT
The Collateral covered by the Pledge Agreement to which this Schedule
A is annexed includes, without limitation, the following (and all proceeds
thereof):
A. The following shares of stock (the "First Priority Pledged
Securities"), certificates representing which are hereby delivered to the
Collateral Agent in good transferable form, endorsed by the Pledgor in
blank:
Percentage
Number of Outstanding Certificate
Issuer of Shares Shares Number
- ------ --------- -------------- -----------
Chicago Asset 100 100% 1
Management Company
Nelson, Benson 100 100% 1
& Zellmer, Inc.
Hamilton, Allen & 100 100% 2
Associates, Inc.
Thompson, Siegel 2,898 100% 18,19
& Walmsley, Inc.
Analytic Investment 3,400 100% 20
Management, Inc.
Northern Capital 100 100% 1
Management Incorporated
(certificate in name of
NCM Newco, Inc.)
Cooke & Bieler, Inc. 5,462 100% 208,209
Olympic Capital 100 100% 76
Management, Inc.
Fiduciary Management 900 100% 11,12
Associates, Inc.
Investment Counselors 7,500 100% 52
of Maryland, Inc.
<PAGE>
The Rothschild 638.6316 100% 11
Company
Sterling Capital 7,757 100% 7,8
Management Company
Rice, Hall, James 100 100% 2
& Associates
C.S. McKee & Company, 21,000 100% 55,127
Incorporated Class A
7,430
Class B
HIMCO, Inc. 400 100% 6
(d/b/a Hanson
Investment Management
Company)
Barrow, Hanley, 100 100% 2
Mewhinney & Strauss,
Inc.
Sirach Capital Management, 100 100% 3
Inc.
United Asset Management 100 100% 1
Holdings, Inc.
United Asset Management 100 100% 1
Trademark, Inc.
The Campbell Group, Inc 100 100% 2
Newbold's Asset 100 100% 10
Management, Inc.
UAM Investment 100 100% 1
Corporation
Cambiar Investors, 100 100% 16
Inc.
Spectrum Asset 100 100% 3
Management, Inc.
Regis Retirement Plan 7000 100% 3
Services, Inc.
(formerly named RFI
Distributors, Inc.)
Alpha Global Fixed
Income Managers, Inc. 100 100% 1
<PAGE>
Ki Pacific Asset 100 100% 2
Management, Inc.
L&B Realty Advisors, Inc. 3,710 95% A-2
United Asset Management 1 100% 2
U.K. Holdings, Inc.
Regis Administrative 100 100% 3
Services, Inc.
(formerly named
Newco Acquisition Corp.)
Heitman Financial Ltd. 100 100% 3
GSB Investment
Management, Inc. 100 100% 2
John K. Dwight Asset
Management Company, Inc. 100 100% 3
Investment Research Company 100 100% 13
Suffolk Capital
Management, Inc. 100 100% 3
B. The following shares of stock (the "Second Priority Pledged
Securities"), certificates representing which are held pursuant to
Stockholder Pledge Agreements, by which selling stockholders have been
granted first priority liens in such shares, as follows:
<TABLE>
<CAPTION>
Percentage Stockholder
Number of Outstanding Certificate Certificate Pledge
Issuer of Shares Shares Number Holder Agreement
- ------ --------- -------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
NONE
</TABLE>
<PAGE>
EXHIBIT C TO
AMENDED AND RESTATED
CREDIT AGREEMENT
AGREEMENTS PROVIDING
FOR CONTINGENT PAYMENTS
1. Acquisition Agreement by and among the Company, Trinity Capital
Advisors, Inc., Sterling Capital Management Company and the stockholders of
Trinity Capital Advisors, Inc., dated as of July 31, 1991.
2. Acquisition Agreement by and among the Company, First Pacific
Advisors, Inc., FPA Newco, Inc., and Angeles Corporation, dated as of April 8,
1991.
3. Acquisition Agreement by and among the Company, SCM Newco, Inc.,
Suffolk Capital Management, Inc., and the stockholders of Suffolk Capital
Management, Inc., dated as of June 7, 1994.
4. Acquisition Agreement by and among the Company, JD Newco, Inc., John
K. Dwight, Inc., John K. Dwight Asset Management Company, Inc., and John K.
Dwight, dated as of November 9, 1993.
5. Acquisition Agreement by and among the Company, NIMC Newco, Inc., NWQ
Investment Management Company, and NWQ Charitable Remainder Unitrust, the
holders of the entire partnership interest in NWQ Investment Management Company,
and David A. Polak, dated as of October 21, 1992.
<PAGE>
EXHIBIT D TO
AMENDED AND
RESTATED CREDIT AGREEMENT
HEITMAN PERMITTED INDEBTEDNESS AND RELATED ENCUMBRANCES
(1) Indebtedness of Heitman Financial Ltd. to LaSalle National Bank in the
principal sum not to exceed $10,000,000 pursuant to the terms of a Loan
Agreement dated as of March 27, 1992, as amended (the "LaSalle Loan
Agreement"), by and between LaSalle National Bank and Heitman Financial
Ltd. and a Revolving Credit Note dated as of June 30, 1994 of Heitman
Financial Ltd. payable to the order of LaSalle National Bank in the
principal sum of $10,000,000.
(2) A Guaranty in favor of LaSalle National Bank of the obligations of Heitman
Financial Ltd. to LaSalle National Bank by the following: (a) Heitman
Advisory Corporation and all of its subsidiary corporations; (b) Heitman
Financial Services Ltd. and all of its subsidiary corporations; (c) Heitman
Properties Ltd. and all of its subsidiary corporations; (d) Heitman
Financial U.K. Ltd.; (e) HFL-A Partnership and HFL-B Partnership; and (f)
each corproation identified on any future amended Schedule 1.1 to the
LaSalle Loan Agreement as a "New Guarantor".
(3) Indebtedness of Heitman Properties Ltd. to Continental Bank N.A. in the
original principal sum of $5,000,000 (of which $600,000 is outstanding)
pursuant to the terms of a Credit Agreement dated as of March 5, 1992, as
amended, by and between Heitman Properties Ltd. and Continental Bank N.A.
and a Note dated March 5, 1992, as amended, of Heitman Properties Ltd.
payable to the order of Continental Bank, N.A. in the principal sum of
$5,000,000.
(4) Indebtedness of Heitman Properties Ltd. to Continental Bank N.A. in the
principal sum of $3,600,000 pursuant to the terms of a First Amended and
Restated Credit Agreement dated as of April 6, 1992, as amended (the
"Continental Loan Agreement"), by and between Heitman Properties Ltd. and
Continental Bank N.A. and a Second Amended and Restated Note dated as of
June 14, 1994 of Heitman Properties Ltd. payable to the order of
<PAGE>
Continental Bank N.A. in the principal sum of $1,096,227.17.
(5) Guaranty of Payment dated March 5, 1992 of Heitman Financial Ltd. in favor
of Continental Bank N.A. of the obligations of Heitman Properties Ltd. to
Continental Bank N.A.
(6) A Guaranty in favor of Continental Bank N.A. of the obligations of Heitman
Properties Ltd. to Continental Bank N.A. by all of the subsidiary
corporations of Heitman Properties Ltd. as required under the terms of the
Continental Loan Agreement.
(7) Indebtedness of Heitman Holdings Ltd. and Heitman Financial Services Ltd.
as co-makers of a Promissory Note dated October 25, 1991 payable to the
order of General Electric Capital Corporation in the principal sum of
$1,890,000.
(8) Indebtedness of Heitman Holdings Ltd. and Heitman Financial Services Ltd.
as co-makers of a Promissory Note dated October 25, 1991 payable to the
order of General Electric Capital Corporation in the principal sum of
$1,450,000.
(9) Corporate Guaranty dated October 25, 1991 of Heitman Financial Ltd. in
favor of General Electric Capital Corporation of the obligations of Heitman
Financial Services Ltd. to General Electric Capital Corporation.
(10) Corporate Guaranty dated October 25, 1991 of Heitman Financial Ltd. in
favor of General Electric Capital Corporation of the obligations of Heitman
Holdings Ltd. to General Electric Capital Corporation.
(11) Corporate Guaranty dated October 25, 1991 of Heitman Advisory Corporation
in favor of General Electric Capital Corporation of the obligations of
Heitman Financial Services Ltd. to General Electric Capital Corporation.
(12) Corporation Guaranty dated October 25, 1991 of Heitman Advisory Corporation
in favor of General Electric Capital Corporation of the obligations of
Heitman Holdings Ltd. to General Electric Capital Corporation.
-2-
<PAGE>
SCHEDULE OF LIENS
(1) Aircraft Chattel Mortgage dated October 25, 1991 by and between Heitman
Holdings Ltd., as mortgagor, and General Electric Capital Corporation, as
mortgagee, in which the mortgagor pledges and mortgages a 1983 Gates
Learjet to the mortgagee to secure a Promissory Note dated October 25, 1991
of Heitman Holdings Ltd. and Heitman Financial Services Ltd. payable to the
order of General Electric Capital Corporation in the principal sum of
$1,890,000.
(2) Aircraft Chattel Mortgage dated October 25, 1991 by and between Heitman
Holdings Ltd., as mortgagor, and General Electric Capital Corporation, as
mortgagee, in which the mortgagor pledges and mortgages a 1978 Gates
Learjet to the mortgagee to secure a Promissory Note dated October 25, 1991
of Heitman Holdings Ltd. and Heitman Financial Services, Ltd. payable to
the order of General Electric Capital Corporation in the principal sum of
$1,450,000.
Collateral Assignment and Security Agreement (Assignment of Notes) dated as
of March 5, 1992 by Heitman Properties Ltd. in favor of Continental Bank
N.A. which collaterally assigns all of the right, title, and interest of
Heitman Properties Ltd. in, to, and under (i) a Note dated March 5, 1992 in
the original principal amount of $3,000,000 executed by Mayfair Joint
Venture, an Illinois general partnership, payable to the order of Heitman
Properties Ltd., and (ii) a Note dated March 5, 1992 in the original
principal amount of $2,500,000 executed by HC Partnership, an Illinois
general partnership, payable to the order of Heitman Properties Ltd.
-3-
<PAGE>
EXHIBIT E TO
AMENDED AND
RESTATED CREDIT AGREEMENT
PROMISSORY NOTE
$_______________ New York, New York
August 29, 1994
FOR VALUE RECEIVED, the undersigned, UNITED ASSET MANAGEMENT
CORPORATION, a Delaware corporation (the "Company"), hereby promises to pay to
the order of ______________________ (the "Bank"), the lesser of (i) the
principal amount of ______________________________ DOLLARS ($_______________) or
(ii) the aggregate unpaid principal amount of all Loans made by the Bank to the
Company pursuant to the Amended and Restated Credit Agreement, dated as of
August 29, 1994 (as the same may be amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Company, the Bank, the
other banks and financial institutions from time to time parties thereto, Morgan
Guaranty Trust Company of New York, as Agent, and The First National Bank of
Boston, as Collateral Agent, on the Termination Date or such earlier date as may
be provided in the Credit Agreement.
The Company also promises to pay interest on the unpaid principal
amount of this Note from time to time outstanding from the date hereof until
such principal amount is paid in full at the rates per annum set forth in or
established pursuant to the Credit Agreement. Such interest shall be payable on
such dates as are determined from time to time pursuant to the Credit Agreement
and shall be calculated as therein provided.
Both the principal hereof and the interest hereon are payable in
lawful money of the United States of America in immediately available funds at
the office of the Agent located at 60 Wall Street, New York, New York 10260,
ABA #021000238, for credit to: Loan Department-Syndications Unit, Account No.
999-99-090, Attention: Syndications Unit, Reference: United Asset Management
Corporation, or at such other place as the Agent may specify in writing.
Presentment, demand, protest and other notice of any kind are hereby
expressly waived.
<PAGE>
In the event that any action, suit or other proceeding is brought by
the holder hereof to collect this Note, the Company shall be liable for all
court costs and expenses of collection, including, without limitation,
attorneys' fees and disbursements.
This Note is executed and delivered to the Bank pursuant to the Credit
Agreement, and is entitled to the benefits of the Credit Agreement, which, among
other things, contains provisions for mandatory and voluntary prepayment of the
amount due hereunder and acceleration of the maturity hereof upon the happening
of certain stated events. All capitalized terms used in the Credit Agreement are
used herein with the same meanings as are set forth in the Credit Agreement.
This Note shall be governed by and construed and enforced in
accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly within such State.
This Note may not be modified or discharged orally or otherwise,
except by a writing duly executed by the holder hereof.
UNITED ASSET MANAGEMENT CORPORATION
By:________________________________
Title:
-2-
<PAGE>
SCHEDULE TO PROMISSORY NOTE
DATED AUGUST 29, 1994 of
UNITED ASSET MANAGEMENT CORPORATION
TO ____________________
LOANS
Amount Type Notation
of of Interest Interest Amount Made
Date Loan Loan Rate Period Paid By
- ---- ------ ------ -------- -------- ------ --------
-3-
<PAGE>
EXHIBIT F TO AMENDED AND
RESTATED CREDIT AGREEMENT
UNITED ASSET MANAGEMENT CORP
1994 SUB INDEBTEDNESS SCHEDULE
August 18, 1994
<TABLE>
<CAPTION>
CURRENT YEAR CURRENT YEAR NOTE INT
AFFILIATE NOTEHOLDER PRINCIPAL INCREASES DECREASES TOTAL NOTES DUE DATE RATE
------ ---------------------------------- ------ ------- -------- ------- ----- -----
========= ================================= ================ ============= ============== ============== ========= =======
<S> <C> <C> <C> <C> <C> <C> <C>
BHMS JAMES P. BARROW 2,289,500.00 (2,289,500.00) 0.00 01/07/94 0.085
BHMS JAMES P. BARROW 2,289,500.00 2,289,500.00 01/07/95 0.085
BHMS JAMES P. BARROW 379,356.07 (379,356.07) 0.00 03/01/94 0.085
BHMS JAMES P. BARROW 379,356.07 379,356.07 03/01/95 0.085
BHMS JAMES P. BARROW 379,356.08 379,356.08 03/01/96 0.085
BHMS JAMES P. BARROW 379,356.08 379,356.08 03/01/97 0.085
BHMS JAMES P. BARROW 381,163.65 (381,163.65) 0.00 03/01/94 0.085
BHMS JAMES P. BARROW 381,163.65 381,163.65 03/01/95 0.085
BHMS JAMES P. BARROW 381,163.65 381,163.65 03/01/96 0.085
BHMS JAMES P. BARROW 381,163.65 381,163.65 03/01/97 0.085
BHMS JAMES P. BARROW 381,163.65 381,163.65 03/01/98 0.085
---------------- --------------
8,002,242.55 4,952,222.83
BHMS BRYANT M. HANLEY, JR. 2,289,500.00 (2,289,500.00) 0.00 01/07/94 0.085
BHMS BRYANT M. HANLEY, JR. 2,289,500.00 2,289,500.00 01/07/95 0.085
BHMS BRYANT M. HANLEY, JR. 379,356.07 (379,356.07) 0.00 03/01/94 0.085
BHMS BRYANT M. HANLEY, JR. 379,356.07 379,356.07 03/01/95 0.085
BHMS BRYANT M. HANLEY, JR. 379,356.08 379,356.08 03/01/96 0.085
BHMS BRYANT M. HANLEY, JR. 379,356.08 379,356.08 03/01/97 0.085
BHMS BRYANT M. HANLEY, JR. 381,163.65 (381,163.65) 0.00 03/01/94 0.085
BHMS BRYANT M. HANLEY, JR. 381,163.65 381,163.65 03/01/95 0.085
BHMS BRYANT M. HANLEY, JR. 381,163.65 381,163.65 03/01/96 0.085
BHMS BRYANT M. HANLEY, JR. 381,163.65 381,163.65 03/01/97 0.085
BHMS BRYANT M. HANLEY, JR. 381,163.65 381,163.65 03/01/98 0.085
---------------- --------------
8,002,242.55 4,952,222.83
BHMS MICHAEL C. MEWHINNEY 2,289,500.00 (2,289,500.00) 0.00 01/07/94 0.085
BHMS MICHAEL C. MEWHINNEY 2,289,500.00 2,289,500.00 01/07/95 0.085
BHMS MICHAEL C. MEWHINNEY 379,356.07 (379,356.07) 0.00 03/01/94 0.085
BHMS MICHAEL C. MEWHINNEY 379,356.07 379,356.07 03/01/95 0.085
BHMS MICHAEL C. MEWHINNEY 379,356.08 379,356.08 03/01/96 0.085
BHMS MICHAEL C. MEWHINNEY 379,356.08 379,356.08 03/01/97 0.085
BHMS MICHAEL C. MEWHINNEY 381,163.65 (381,163.65) 0.00 03/01/94 0.085
BHMS MICHAEL C. MEWHINNEY 381,163.65 381,163.65 03/01/95 0.085
BHMS MICHAEL C. MEWHINNEY 381,163.65 381,163.65 03/01/96 0.085
BHMS MICHAEL C. MEWHINNEY 381,163.65 381,163.65 03/01/97 0.085
BHMS MICHAEL C. MEWHINNEY 381,163.65 381,163.65 03/01/98 0.085
---------------- --------------
8,002,242.55 4,952,222.83
BHMS JOHN L. STRAUSS 2,289,500.00 (2,289,500.00) 0.00 01/07/94 0.085
BHMS JOHN L. STRAUSS 2,289,500.00 2,289,500.00 01/07/95 0.085
BHMS JOHN L. STRAUSS 379,356.07 (379,356.07) 0.00 03/01/94 0.085
BHMS JOHN L. STRAUSS 379,356.07 379,356.07 03/01/95 0.085
BHMS JOHN L. STRAUSS 379,356.08 379,356.08 03/01/96 0.085
BHMS JOHN L. STRAUSS 379,356.08 379,356.08 03/01/97 0.085
BHMS JOHN L. STRAUSS 381,163.65 (381,163.65) 0.00 03/01/94 0.085
BHMS JOHN L. STRAUSS 381,163.65 381,163.65 03/01/95 0.085
BHMS JOHN L. STRAUSS 381,163.65 381,163.65 03/01/96 0.085
BHMS JOHN L. STRAUSS 381,163.65 381,163.65 03/01/97 0.085
BHMS JOHN L. STRAUSS 381,163.65 381,163.65 03/01/98 0.085
---------------- --------------
8,002,242.55 4,952,222.83
------------------------------ -------------- --------------
32,008,970.20 0.00 (12,200,078.88) 19,808,891.32
========= ================================= ================ ============= ============== ============== ========= =======
CGI BIRDSHILL, INC 3,650,000.00 3,650,000.00 05/31/97 0.0865
CGI BIRDSHILL, INC 854,254.32 854,254.32 05/31/97 0.0865
------------------------------ -------------- --------------
4,504,254.32 0.00 0.00 4,504,254.32
========= ================================= ================ ============= ============== ============== ========= =======
DWIGHT JOHN K. DWIGHT 5,376,000.00 5,376,000.00 01/04/01 0.055
========= ================================= ================ ============= ============== ============== ========= =======
FMA ROBERT CARR 700,000.00 (700,000.00) 0.00 06/24/96 0.090
FMA ROBERT CARR 77,250.00 (77,250.00) 0.00 06/24/96 0.090
---------------- -------------- --------------
777,250.00 (777,250.00) 0.00
</TABLE>
<PAGE>
UNITED ASSET MANAGEMENT CORP
1994 SUB INDEBTEDNESS SCHEDULE
August 18, 1994
<TABLE>
<CAPTION>
CURRENT YEAR CURRENT YEAR NOTE INT
AFFILIATE NOTEHOLDER PRINCIPAL INCREASES DECREASES TOTAL NOTES DUE DATE RATE
------ ---------------------------------- ------ ------- -------- ------- ----- -----
========= ================================= ================ ============= ============== ============== ========= =======
<S> <C> <C> <C> <C> <C> <C> <C>
FMA PHILIP ARNOLD - TRUST 700,000.00 700,000.00 06/24/96 0.090
FMA PHILIP & ELLEN ARNOLD CHAR TST 77,250.00 77,250.00 06/24/96 0.090
---------------- --------------
777,250.00 777,250.00
FMA ROBERT THORNBURGH 85,000.00 85,000.00 08/08/96 0.090
FMA ROBERT THORNBURGH 9,375.00 9,375.00 06/24/96 0.090
---------------- --------------
94,375.00 94,375.00
FMA JOHN BORLAND, JR. 255,000.00 255,000.00 08/08/96 0.090
FMA JOHN BORLAND, JR. 28,125.00 28,125.00 06/24/96 0.090
---------------- --------------
283,125.00 283,125.00
---------------- ------------- -------------- --------------
1,932,000.00 0.00 (777,250.00) 1,154,750.00
========= ================================= ================ ============= ============== ============== ========= =======
GSB MARK J. STUPFEL 3,358,693.60 3,358,693.60 01/02/01 0.055
GSB FRANK P. GANUCHEAU III 2,190,434.25 2,190,434.25 01/02/01 0.055
GSB ELISABETH M. GANUCHEAU 2,190,434.25 2,190,434.25 01/02/01 0.055
GSB MARK L. JOHNSON 730,172.50 730,172.50 01/02/01 0.055
GSB CHARLES P. LAMB 438,100.73 438,100.73 01/02/01 0.055
GSB WILLIAM M. BOWEN IV 219,057.30 219,057.30 01/02/01 0.055
GSB LYLE E. BRUMLEY 1,460,331.12 1,460,331.12 01/02/01 0.055
GSB RONALD J. GOLDMAN 730,172.50 730,172.50 01/02/01 0.055
GSB WILLIAM A. LANDRETH JR 730,172.50 730,172.50 01/02/01 0.055
GSB HAL FORD SMITH 365,086.25 365,086.25 01/02/01 0.055
GSB DEE M. PERKINS 730,172.50 730,172.50 01/02/01 0.055
GSB SCOTT SHERMAN 730,172.50 730,172.50 01/02/01 0.055
---------------- ------------- -------------- --------------
13,873,000.00 0.00 0.00 13,873,000.00
========= ================================= ================ ============= ============== ============== ========= =======
HA&A JOHN F. STATTS 34,900.00 (34,900.00) 0.00 02/17/94 0.100
HA&A JOHN F. STATTS 128,433.33 (128,433.33) 0.00 02/17/94 0.100
---------------- --------------
163,333.33 0.00
---------------- ------------- -------------- --------------
163,333.33 0.00 (163,333.33) 0.00
========= ================================= ================ ============= ============== ============== ========= =======
ICM LINDA W. MCCLEARY 80,000.00 (80,000.00) 0.00 06/01/94 0.075
ICM STEPHEN T. SCOTT 194,933.00 (194,933.00) 0.00 06/01/94 0.075
---------------- ------------- -------------- --------------
274,933.00 0.00 (274,933.00) 0.00
========= ================================= ================ ============= ============== ============== ========= =======
NWQ NWQ CHARITABLE REMAINDER TRUST 28,166,400.00 28,166,400.00 09/30/99 0.060
NWQ NWQ CHARITABLE REMAINDER TRUST 5,476,800.00 5,476,800.00 09/30/99 0.060
---------------- --------------
33,643,200.00 33,643,200.00
NWQ JAMES P. OWEN 3,510,000.00 3,510,000.00 09/30/99 0.060
NWQ JAMES P. OWEN 682,500.00 682,500.00 09/30/99 0.060
---------------- --------------
4,192,500.00 4,192,500.00
NWQ EDWARD C. FRIEDEL, JR. 2,026,800.00 2,026,800.00 09/30/99 0.060
NWQ EDWARD C. FRIEDEL, JR. 394,100.00 394,100.00 09/30/99 0.060
---------------- --------------
2,420,900.00 2,420,900.00
NWQ JAMES H. GALBREATH 1,573,200.00 1,573,200.00 09/30/99 0.060
</TABLE>
<PAGE>
UNITED ASSET MANAGEMENT CORP
1994 SUB INDEBTEDNESS SCHEDULE
August 18, 1994
<TABLE>
<CAPTION>
CURRENT YEAR CURRENT YEAR NOTE INT
AFFILIATE NOTEHOLDER PRINCIPAL INCREASES DECREASES TOTAL NOTES DUE DATE RATE
------ ---------------------------------- ------ ------- -------- ------- ----- -----
========= ================================= ================ ============= ============== ============== ========= =======
<S> <C> <C> <C> <C> <C> <C> <C>
NWQ JAMES H. GALBREATH 305,900.00 305,900.00 09/30/99 0.060
---------------- --------------
1,879,100.00 1,879,100.00
NWQ MARY-GENE SLAVEN 723,600.00 723,600.00 09/30/99 0.060
NWQ MARY-GENE SLAVEN 140,700.00 140,700.00 09/30/99 0.060
---------------- --------------
864,300.00 864,300.00
---------------- ------------- -------------- --------------
43,000,000.00 0.00 0.00 43,000,000.00
========= ================================= ================ ============= ============== ============== ========= =======
OCM BURTON K. CARR 67,845.31 (67,845.31) 0.00 03/01/94 0.090
OCM JOHN CROWL 67,845.31 (67,845.31) 0.00 03/01/94 0.090
OCM JOHN DAGRES 52,425.92 (52,425.92) 0.00 03/01/94 0.090
OCM CRAIG HINTZE 52,425.92 (52,425.92) 0.00 03/01/94 0.090
OCM JOHN MORBECK 67,845.31 (67,845.31) 0.00 03/01/94 0.090
---------------- ------------- -------------- --------------
308,387.77 0.00 (308,387.77) 0.00
========= ================================= ================ ============= ============== ============== ========= =======
PR Edward I. Rudman 2,070,000.00 2,070,000.00 03/29/00 0.060
PR Anthony D. Pell 2,070,000.00 2,070,000.00 03/29/00 0.060
---------------- ------------- -------------- --------------
4,140,000.00 0.00 0.00 4,140,000.00
========= ================================= ================ ============= ============== ============== ========= =======
RHJ WALTER H. BECK 180,000.00 (180,000.00) 0.00 05/29/94 0.075
RHJ CLAUDE C. BLAKEMORE - LANE & CO 100,000.00 (100,000.00) 0.00 05/29/94 0.075
RHJ ROBERT B. CONWAY - LANE & CO 100,000.00 (100,000.00) 0.00 05/29/94 0.075
RHJ H. LANGFORD HALL, JR. 586,415.00 (586,415.00) 0.00 05/29/94 0.075
RHJ PATRICK J. JAMES 150,000.00 (150,000.00) 0.00 05/29/94 0.075
RHJ CHARLES G. KING 105,527.00 (105,527.00) 0.00 05/29/94 0.075
RHJ D.C.SHERMAN,TR OF K.F.MADSEN TR WIR 50,000.00 (50,000.00) 0.00 05/29/94 0.075
RHJ THOMAS MCDOWELL 85,000.00 (85,000.00) 0.00 05/29/94 0.075
RHJ WILLIAM H. MUCHNIC 60,000.00 (60,000.00) 0.00 05/29/94 0.075
RHJ GARY S. RICE 100,000.00 (100,000.00) 0.00 05/29/94 0.075
RHJ LOUIS E. RICE 565,239.00 (565,239.00) 0.00 05/29/94 0.075
RHJ DAVID TESSMER 129,600.00 (129,600.00) 0.00 05/29/94 0.075
RHJ TIMOTHY TODARO 120,000.00 (120,000.00) 0.00 05/29/94 0.075
RHJ SAMUEL R & MARILYN A TROZZO TR 524,800.00 (524,800.00) 0.00 05/29/94 0.075
RHJ PATRICIA ANN URBONYA 61,085.00 (61,085.00) 0.00 05/29/94 0.075
RHJ ALYSON R. GOUDY, TRUSTEE 33,333.33 (33,333.33) 0.00 05/29/94 0.075
RHJ L. GREGORY RICE 9,523.81 (9,523.81) 0.00 05/29/94 0.075
RHJ PATRICIA G. RICE 9,523.81 (9,523.81) 0.00 05/29/94 0.075
RHJ GARY S. RICE 9,523.81 (9,523.81) 0.00 05/29/94 0.075
RHJ ROBERT MATTHEW RICE 9,523.81 (9,523.81) 0.00 05/29/94 0.075
RHJ CHRISTOPHER BYRON RICE 9,523.81 (9,523.81) 0.00 05/29/94 0.075
RHJ ASHLEY LANE RICE 9,523.81 (9,523.81) 0.00 05/29/94 0.075
RHJ AMANDA FALCONER RICE 9,523.81 (9,523.81) 0.00 05/29/94 0.075
---------------- ------------- -------------- --------------
3,017,666.00 0.00 (3,017,666.00) 0.00
========= ================================= ================ ============= ============== ============== ========= =======
SIRACH WILMINGTON TR CO & BOYD E.SHARP,JR 750,780.00 750,780.00 03/31/97 0.0875
SIRACH GEORGE B. KAUFFMAN 834,197.00 834,197.00 03/31/97 0.0875
SIRACH J. MICHAEL FLINN 442,155.92 442,155.92 01/04/96 0.0875
SIRACH J. MICHAEL FLINN 834,197.00 834,197.00 03/31/97 0.0875
---------------- --------------
1,276,352.92 1,276,352.92
SIRACH WILLIAM B. SANDERS 215,515.47 215,515.47 01/04/96 0.0875
SIRACH WILLIAM B. SANDERS 834,197.00 834,197.00 03/31/97 0.0875
---------------- --------------
1,049,712.47 1,049,712.47
SIRACH LAURENCE O. ELVINS 174,197.00 174,197.00 03/31/97 0.0875
---------------- ------------- -------------- --------------
4,085,239.39 0.00 0.00 4,085,239.39
========= ================================= ================ ============= ============== ============== ========= =======
SCM ALEXANDER W. MCALISTER 20,000.00 20,000.00 08/26/98 0.075
SCM ALEXANDER W. MCALISTER 36,203.00 36,203.00 11/30/00 0.075
</TABLE>
<PAGE>
UNITED ASSET MANAGEMENT CORP
1994 SUB INDEBTEDNESS SCHEDULE
August 18, 1994
<TABLE>
<CAPTION>
CURRENT YEAR CURRENT YEAR NOTE INT
AFFILIATE NOTEHOLDER PRINCIPAL INCREASES DECREASES TOTAL NOTES DUE DATE RATE
------ ---------------------------------- ------ ------- -------- ------- ----- -----
========= ================================= ================ ============= ============== ============== ========= =======
<S> <C> <C> <C> <C> <C> <C> <C>
SCM ALEXANDER W. MCALISTER 3,987.00 3,987.00 01/31/01 0.075
---------------- ------------- -------------- --------------
60,190.00 0.00 0.00 60,190.00
SCM DAVID M. RALSTON 205,000.00 205,000.00 08/26/98 0.075
SCM DAVID M. RALSTON 343,925.00 343,925.00 11/30/00 0.075
SCM DAVID M. RALSTON 37,863.00 37,863.00 01/31/01 0.075
---------------- ------------- -------------- --------------
586,788.00 0.00 0.00 586,788.00
SCM MARK W. WHALEN 205,000.00 205,000.00 08/26/98 0.075
SCM MARK W. WHALEN 343,925.00 343,925.00 11/30/00 0.075
SCM MARK W. WHALEN 37,863.00 37,863.00 01/31/01 0.075
---------------- ------------- -------------- --------------
586,788.00 0.00 0.00 586,788.00
---------------- ------------- -------------- --------------
1,233,766.00 0.00 0.00 1,233,766.00
========= ================================= ================ ============= ============== ============== ========= =======
SUFFOLK DONALD M. GILBERT 2,512,883.40 2,512,883.40 7/14/01 0.060
ERICH G. WEISSENBERGER , JR. 2,056,216.10 2,056,216.10 7/14/01 0.060
HIRAM F. MOODY, JR 235,370.50 235,370.50 7/14/01 0.060
RICHARD G. PHILLIPS 48,530.00 48,530.00 7/14/01 0.060
---------------- ------------- -------------- --------------
0.00 4,853,000.00 0.00 4,853,000.00
========= ================================= ================ ============= ============== ============== ========= =======
TJIM THOMAS E. JOHNSON 9,735,000.00 9,735,000.00 12/11/99 0.060
JERRY L. WISE 990,000.00 990,000.00 12/11/99 0.060
RICHARD H. PARRY 165,000.00 165,000.00 12/11/99 0.060
LORI A. CALFY 110,000.00 110,000.00 12/11/99 0.060
---------------- ------------- -------------- --------------
11,000,000.00 0.00 0.00 11,000,000.00
========= ================================= ================ ============= ============== ============== ========= =======
TOTAL 119,541,550.01 10,229,000.00 (16,741,648.98)113,028,901.03
========= ================================= ================ ============= ============== ============== ========= =======
</TABLE>
<PAGE>
EXHIBIT G TO
AMENDED AND RESTATED
CREDIT AGREEMENT
----------------
SUBORDINATION AGREEMENT
-----------------------
AGREEMENT made as of the [___] day of [____________ __, 199_] by and
between United Asset Management Corporation, a Delaware corporation ("UAM"),
and ABC Associates, Inc., a [______________] corporation ("ABC" or, together
with any person to whom the Note referred to herein is assigned or endorsed,
the "Holder").
BACKGROUND
----------
(a) The Holder has entered into an Acquisition Agreement with UAM dated
as of [____________ __, 199_], relating to the acquisition by UAM of the assets
and business of ABC, which assets and business have been transferred to UAM's
wholly-owned subsidiary, ABC Newco, Inc. ("Newco")(such agreement being
hereinafter referred to as the "Acquisition Agreement"). Terms defined and
used in the Acquisition Agreement and the Note, as defined below, shall have
the same meaning when used in this Subordination Agreement.
(b) On this date, UAM has issued and delivered to the Holder UAM's
[________%] Non-Negotiable Subordinated Note in the principal amount of
$[___________________] (the "Note") in partial payment for such assets and
business.
(c) Section 1.2 of the Acquisition Agreement and Section 4 of the Note
provide that the Note will be subordinated in accordance with this
Subordination Agreement.
AGREEMENTS
----------
The parties hereto hereby agree as follows:
Section 1. SUBORDINATION. The indebtedness evidenced by the Note shall
be subordinated and junior to the extent set forth in the following subsections
(a) to (d), inclusive, to all Senior Debt (as defined in subsection (e) hereof)
of UAM:
(a) No payment on account of principal of, premium or interest on the
Note shall be made or accepted, including by right of set-off, and no purchase
of the Note directly or indirectly by UAM shall be made, and the Holder of the
Note shall not be entitled to enforce any such payment, if, at the time thereof
or immediately after giving effect thereto, (i) there shall exist a default in
the payment of principal of, premium or interest on any Senior Debt, and such
default shall not have been cured or waived or shall not have ceased to exist
or
<PAGE>
(ii) There shall exist a default or an event of default (other than a
default in the payment of amounts due thereon) with respect to any Senior Debt,
as defined therein or in the instrument under which the same is outstanding,
permitting the holders thereof, or any of them, to accelerate the maturity
thereof, and such default or event of default shall not have been cured or
waived or shall not have ceased to exist; provided, however, that after 180
days of the occurrence of a default or event of default described in (ii)
hereof, if the holders of Senior Debt have not caused the maturity of the
Senior Debt to be accelerated, the Holder of the Note shall thereafter be
entitled to receive each installment of interest and each installment of
principal on the Note as such installments become due and payable, subject to
the application of the restrictions of this paragraph again upon the occurrence
of each further default or event of default.
(b) Upon the maturity of any Senior Debt by lapse of time, acceleration
or otherwise, then all such matured Senior Debt shall first be paid in full,
before any payment on account of principal, premium or interest is made upon
the Note.
(c) In the event of any insolvency, bankruptcy, liquidation (whether
voluntary or involuntary), reorganization or other similar proceedings, or any
receivership proceedings in connection therewith, relative to UAM or its
property, and in the event of any proceedings for voluntary liquidation,
dissolution or other winding up of UAM, whether voluntary or involuntary, or
any assignment for the benefit of creditors or other marshalling of assets or
liabilities of UAM, whether or not involving insolvency or bankruptcy
proceedings, then all Senior Debt shall first be paid in full or provision for
such payment satisfactory to the holders of the majority in principal amount of
the Senior Debt shall be made, before any payment on account of principal,
premium or interest is made upon the Note.
(d) On any of the proceedings referred to in subsection (c) above, any
payment or distribution of any kind or character, whether in cash, property,
stock or obligations, which may be payable or deliverable in respect of the
Note, or the indebtedness represented thereby, shall be paid or delivered
directly to the holders of Senior Debt or their authorized representative
designated to UAM in writing, for application in payment thereof, unless and
until the Senior Debt shall have been paid in full, and the Holder of the Note
does hereby authorize holders of Senior Debt to prove and enforce claims
comprising the Note, vote claims comprising the Note to accept or reject any
plan for liquidation,
-2-
<PAGE>
reorganization, composition or extension and accept and receipt for any payment
or distribution to such extent and apply such payment or distribution to the
then unpaid Senior Debt and do all things and to execute all such documents as
may be necessary to effectuate the foregoing; PROVIDED, HOWEVER, that
notwithstanding the foregoing, should any payment or distribution in any such
proceeding be received by the Holder of the Note before all Senior Debt is
paid in full, such payment or distribution shall be received in trust and
promptly delivered in the form received (duly endorsed, if appropriate) to the
holders of Senior Debt or their representative for application to the payment
of Senior Debt then remaining unpaid; and PROVIDED, FURTHER, that no such
delivery shall be made to holders of Senior Debt of stock or obligations which
are issued pursuant to reorganization proceedings or dissolution or liquidation
proceedings, or upon any merger, consolidation, sale, lease, transfer or other
disposal not prohibited by the provisions of this Subordination Agreement, by
UAM, as reorganized, or by the corporation which is the successor to UAM or
which acquires its properties and assets, if such stock or obligations are
subordinate and junior at least to the extent provided in this Section 1 to the
prior payment in full of all Senior Debt and to the prior payment in full of
any stock or obligations which are issued in exchange or substitution for any
Senior Debt.
(e) "Senior Debt," as used herein, shall mean the principal of, premium
on, and unpaid interest (including any interest accrued after commencement of
any proceeding referred to in subsection (c) above at the rate provided in any
document or instrument creating or evidencing any indebtedness referred to in
this definition) on (i) all indebtedness, whether outstanding on the date
hereof or hereafter created or arising and including all fees and other amounts
related to such indebtedness, to banks, insurance companies, pension funds or
other institutions regularly engaged in the business of lending money, for
money borrowed or other financial accommodations extended from such
institutions by UAM for working capital purposes, acquisitions, general
corporate purposes or otherwise, and all such indebtedness with respect to
which UAM is a guarantor; (ii) any modifications, deferrals, renewals,
extensions or increase in the amount of any such indebtedness or any
indebtedness issued in exchange, replacement, refunding or refinancing of or
for Senior Debt by banks, insurance companies, pension funds or other
institutions regularly engaged in the business of lending money; and (iii) any
costs, fees and expenses incurred in connection with the enforcement or
collection of Senior Debt (including, without limitation, reasonable
attorneys' fees).
-3-
<PAGE>
Subject to the prior payment in full of all Senior Debt as aforesaid, the
Holder of the Note shall be subrogated pro rata to the rights of the holders of
Senior Debt to receive payments or distributions of any kind or character,
whether in cash, property, stock or obligations, which may be payable or
deliverable to the holders of Senior Debt, until the principal of, and interest
on, the Note shall be paid in full and no such payments or distributions to the
holders of Senior Debt shall, as between UAM, its creditors other than the
holders of Senior Debt, and the Holder of the Note be deemed to be a payment
by UAM to the Holder of or on account of the Note.
The provisions of this Subordination Agreement are for the purposes of
defining the relative rights of the holders of Senior Debt on the one hand, and
the Holder of the Note on the other hand, against UAM and its property.
Subject to the rights under this Subordination Agreement of holders of Senior
Debt to receive cash, property, stock or obligations otherwise payable or
deliverable to the Holder of the Note, nothing herein shall either impair, as
between UAM and the Holder of the Note, the obligation of UAM, which is
unconditional and absolute, to pay to the Holder of the Note the principal and
interest thereon in accordance with the terms and the provisions of the Note or
prevent the Holder of the Note from exercising all remedies otherwise permitted
by applicable law or hereunder upon default hereunder or under the Note.
No right of any holder of Senior Debt to enforce the subordination of the
indebtedness evidenced by the Note shall be impaired by any act or failure to
act by UAM or by the failure of UAM to comply with the Note or this
Subordination Agreement.
* [The Holder of the Note shall give prompt written notice to each Holder of
Senior Debt of any default by UAM under the Note.]
Without limiting the effect of the immediately preceding paragraph, no
holder of Senior Debt need obtain the consent of, or give notice to, any Holder
of the Note prior to taking any of the following actions, upon or without any
terms or conditions and in whole or in part, none of which shall impair or
release any of the rights of any such holder of Senior Debt under this
Subordination Agreement:
(a) change the manner, place or terms of payment, and/or change or extend
the time of payment of, renew or alter, any Senior Debt or any other
liability of UAM to such holder of Senior Debt, any security
therefor, or any liability incurred directly or indirectly in respect
thereof, and the provisions of this Subordination Agreement shall
apply to the Senior Debt of UAM as so changed, extended, renewed or
altered.
* optional
-4-
<PAGE>
(b) sell, exchange, release, surrender, realize upon or otherwise deal
with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, any Senior Debt or any
other liability of UAM to such holder of Senior Debt or any other liabilities
incurred directly or indirectly in respect thereof or hereof and/or any offset
there against;
(c) exercise or refrain from exercising any rights and/or remedies
against UAM or others or otherwise act or refrain from acting or, for any
reason, fail to file, record or otherwise perfect any security interest in
or lien on any property of UAM or any other person;
(d) settle or compromise any Senior Debt or any other liability of UAM to
such holder of Senior Debt or any security therefor, or any liability incurred
directly or indirectly in respect thereof or hereof, and may subordinate the
payment of all or any part thereof to the payment of any liability (whether due
or not) of UAM to creditors of UAM other than such holder of Senior Debt; and
(e) apply any sums by whomsoever paid and howsoever realized to any
liability or liabilities of UAM to such holder of Senior Debt regardless of
what liability or liabilities of UAM to such holder of Senior Debt remain
unpaid.
Section 2. RELIANCE BY SENIOR DEBTHOLDERS. UAM agrees, and each Holder
of the Note by accepting the Note agrees, that the subordination effected
hereby is for the benefit of the holders of Senior Debt from time to time, and
that each holder of Senior Debt, whether now outstanding or hereafter created,
incurred, assumed or guaranteed shall be deemed to have acquired Senior Debt in
reliance upon the covenants and provisions contained herein. The subordination
effected hereby shall be enforceable by each holder of Senior Debt from time to
time.
Section 3. FURTHER ASSURANCES. The parties hereto agree to execute and
deliver any and all papers and documents which may be reasonably necessary to
carry out the terms of this Subordination Agreement.
Section 4. ENTIRE AGREEMENT. This Subordination Agreement contains the
entire agreement among the parties with respect to the subject matter hereof.
Section 5. BINDING EFfECT. This Subordination Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
executors, legal representatives, successors and assigns; provided, however,
that this Subordination Agreement and all rights hereunder may not be assigned
by the Holder, except with the prior written consent of UAM, or by UAM except
with the prior written consent of the Holder. No amendment of this
Subordination Agreement or waiver of any of its provisions shall be effective
without the written consent of each holder of Senior Debt if such amendment
adversely affects any rights of the holders of Senior Debt.
-5-
<PAGE>
Section 6. SEPARATE COUNTERPARTS. This Subordination Agreement may be
executed in several identical counterparts, all of which when taken together
(whether the signatures of all the parties appear on one or several
counterparts) shall constitute but one and the same instrument, and it shall
not be necessary in any court of law to introduce more than one fully executed
counterpart, or several counterparts together containing the signatures of all
the parties, in proving this Subordination Agreement.
Section 7. NOTICES. All notices hereunder shall be given in accordance
with the notice provisions of the Acquisition Agreement.
Section 8. GOVERNING LAW. The execution, interpretation and performance
of this Subordination Agreement shall be governed by the laws of the
Commonwealth of Massachusetts which apply to contracts executed and to
be performed solely in Massachusetts. UAM and the Holder hereby consent to the
jurisdiction of any state or federal court located within Suffolk County,
Massachusetts, waive personal service of process and assent that service of
process may be made by registered mail to the parties' respective addresses as
provided in Section 12.6 of the Acquisition Agreement and shall be effective in
the same manner as notices are effective under such Section 12.6.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Subordination Agreement as of the date first above written.
UNITED ASSET MANAGEMENT
CORPORATION
By: ----------------------------
Norton H. Reamer, President
ABC ASSOCIATES, INC.
By: ----------------------------
Title:
-6-
<PAGE>
NON-NEGOTIABLE
[_____%] SUBORDINATED NOTE
DUE [_________ __, 19__]
[_________ __, 19__]
FOR VALUE RECEIVED, UNITED ASSET MANAGEMENT CORPORATION, a Delaware
corporation, (the "Company", which term shall include any corporation which
shall succeed to or assume the obligations of the Company hereunder), promises
to pay to ABC Associates, Inc., a [____________________] corporation (the
"Holder" or "ABC") (except as otherwise provided) the principal sum of
[________________________________________ ($ ____________)] in lawful money of
the United States of America, on [________ __, 19__], together with interest
on the outstanding principal balance payable in like money at the rate of
[_________________] percent [(______%)] per annum commencing the date hereof
and payable semi-annually in arrears on July 1 and January 2 in each year,
beginning on [____________________], until paid in full.
To the extent permitted by law, overdue interest shall bear interest at
[________________] percent [(____%)] per annum. Interest shall be computed
on a 360-day year, 30-day month basis.
1. This Note is delivered by the Company to the Holder in accordance with
the terms of an Acquisition Agreement dated as of [_________ __, 19__] (the
"Acquisition Agreement"), relating to the acquisition by the Company of the
assets and business of ABC, which assets and business the Company has
transferred to its subsidiary ABC Newco, Inc. ("Newco"). The Company and the
Holder are parties to the Acquisition Agreement, and terms defined and used in
the Acquisition Agreement shall have the same meanings in this Note. THIS NOTE
IS NON-NEGOTIABLE. In accordance with the provisions of Section 4.4 of the
Acquisition Agreement, the Company may set off against amounts due the Holder
any amounts due from the Holder to UAM or Newco under Article IV of the
Acquisition Agreement.
2. The principal sum of this Note may be prepaid by the Company in whole
or in part at any time and from time to time without penalty or premium, with
interest prorated up to the date of any such prepayment.
3. All payments of principal and interest shall be payable in cash or by
the Company's check at the Holder's address indicated in the Acquisition
Agreement, or at such other place as the Holder may from time to time in
writing designate to the Company (by notice given in accordance with the
Acquisition Agreement) at least ten (10) days before a payment is due.
<PAGE>
4. This Note is subordinated to all Senior Debt as defined in the
accompanying Subordination Agreement of even date herewith. Reference is made
to such Subordination Agreement for the terms of such subordination.
5. If, (i) the Company shall fail to pay any principal of or interest on
this Note when due and payable whether at maturity or at any date fixed for
redemption or prepayment or otherwise, (except principal of or interest on this
Note as to which the Company has exercised its right of set-off in accordance
with Section 1 above) and such amount shall remain unpaid for thirty (30)
business days after the due date thereof; or (ii) the Company shall admit in
writing its inability to pay its debts; or suffer a receiver or custodian (or
other person performing a similar function) for it or substantially all of its
property to be appointed and, if appointed without its consent, not to be
discharged within sixty (60) days; or make a general assignment for the benefit
of its creditors, or suffer proceedings under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors to be instituted by or against
it and if contested by it not to be dismissed or stayed within sixty (60) days;
or suffer any judgment, writ of attachment, or execution of any similar process
to be issued or levied against a substantial part of its property which is not
released, stayed, bonded, or vacated within thirty (30) days after its issue or
levy, then, and in every such event (which are herein referred to as Events of
Default), the Holder hereof may declare the Note to be in default and to be due
and payable, and it shall, at the Holder's election, thereupon forthwith become
due and payable in full, without presentment, demand, protest, or any notice of
any kind, (other than notice of such election) all of which are hereby
expressly waived.
6. The Company will pay to the Holder on demand all reasonable legal and
other costs actually incurred in connection with any action to collect and/or
enforce this Note in which the Holder prevails.
7. In any case where the date of payment of any prepayment or redemption
of the principal of or interest on this Note shall be at any place of payment a
Sunday, a legal holiday, or a day on which banking institutions are authorized
or obliged by law or regulation to close, then payment of principal or interest
need not be made on such date at such place but may be made on the next
succeeding day that is not at such place of payment a Sunday, a legal holiday
or a day on which banking institutions are authorized or obligated by law or
regulation to close, with the same force and effect as if made on the date of
maturity or the date fixed for payment and no interest shall accrue for the
period after such date.
-2-
<PAGE>
8. The Holder shall not be deemed to have waived or amended any of the
Holder's rights hereunder unless such waiver or amendment is in writing and
signed by the Holder. No delay or omission on the part of the Holder in
exercising any such right shall operate as a waiver of such right or any other
right. A waiver on any one occasion shall not be construed as a bar to or
waiver of any right or remedy on any future occasion.
9. This Note shall bear the legend attached hereto, the provisions of
which are incorporated herein by reference.
This Note shall be governed by and construed and enforced in accordance
with the laws of The Commonwealth of Massachusetts which apply to contracts
executed and performed solely in Massachusetts. UAM and the Holder hereby
consent to the jurisdiction of any state or federal court located within
Suffolk County, Massachusetts, waive personal service of process, and assent
that service of process may be made by registered mail to the parties'
respective addresses as provided in Section 12.6 of the Acquisition Agreement
and shall be effective in the same manner as notices are effective under such
Section 12.6.
This Note has been executed by the Company under seal as of the day, month
and year first above written.
UNITED ASSET MANAGEMENT
CORPORATION
[SEAL]
Attest: -------------------------- By: -------------------------------
Secretary Norton H. Reamer, President
-3-
<PAGE>
LEGEND
------
This Note has not been registered under the Securities Act of 1933 or
qualified under any state securities laws. This Note may not be sold, assigned
or transferred, except with respect to distributions by the Holder to the
Holder's stockholders and transfers by devise to immediate members of the
respective families of such stockholders, in the absence of an effective
registration statement under such Act and qualification under such laws, or an
opinion of counsel satisfactory to the Company that such registration and
qualification are not in the circumstances required.
-4-
<PAGE>
EXHIBIT H TO
AMENDED AND
RESTATED CREDIT AGREEMENT
Morgan Guaranty Trust Company
of New York, as Agent under
the Agreement referenced below
60 Wall Street
New York, New York 10260
ATTENTION: Crescent G. Sancilio
Re: Amended and Restated Credit Agreement dated as of August 29, 1994
(the "Agreement") by and among United Asset Management
Corporation, the banks and other financial institutions from time
to time parties thereto, Morgan Guaranty Trust Company of New
York, as Agent, and The First National Bank of Boston, as
Collateral Agent.
-----------------------------------------------------------------
Gentlemen:
Pursuant to Section 2.2(a) of the Agreement, the undersigned hereby
irrevocably requests a [Base Rate Loan/CD Rate Loan/Eurodollar Loan] in the
amount of $____________ to be made on ________ __, 19__.
The Interest Period applicable to said Loan will be _____________________.*
The proceeds of said Loan will be used for _______________________________.
As of the date hereof, the aggregate amount of Money Market Loans
outstanding is $____________________.
All representations and warranties contained or referred to in the
Agreement and in the other Loan Documents are true and accurate on and as of the
date hereof except as to any matters that have changed in accordance with or as
permitted by the Agreement [except that such representations and warranties
contained in Section 3.12(a) are updated as provided in Schedule I annexed
hereto]** and no Default or Event of Default has occurred and is continuing.
- --------------------
* To be inserted in any request for a Fixed Rate Loan.
** To be inserted if new Subsidiaries have been acquired or created since the
Closing Date.
<PAGE>
All capitalized terms used in this letter have the meanings given to such
terms in the Agreement.
UNITED ASSET MANAGEMENT CORPORATION
By:________________________________
Title:
Date: _______ __, 199_
-2-
<PAGE>
EXHIBIT I TO
AMENDED AND RESTATED
CREDIT AGREEMENT
ENCUMBRANCES
NONE
<PAGE>
EXHIBIT J TO
AMENDED AND RESTATED
CREDIT AGREEMENT
LITIGATION
The Company's federal income tax returns for the years ending December 31,
1984 through December 31, 1992 have been under audit by the Internal Revenue
Service. On January 30, 1992 the Company received a Revenue Agent's Report
proposing certain adjustments to the Company's federal income tax returns for
1984, 1985, and 1986. The principal issue involved is the deductibility of the
amortization of costs assigned to investment advisory contracts acquired. The
Company has appealed the Revenue Agent's proposed adjustments to the Appellate
Division of the Internal Revenue Service. The Internal Revenue Service has not
assessed any deficiency. This matter is more particularly described in footnote
6 to the Company's financial statements for the year ended December 31, 1993.
<PAGE>
UNITED ASSET MANAGEMENT CORPORATION EXHIBIT K TO
AMENDED AND RESTATED
CREDIT AGREEMENT
----------------
<TABLE>
<CAPTION>
Subsidiaries
------------
TOTAL CAPITAL PERCENTAGE OF
NAME STOCK ISSUED AND CAPITAL STOCK
OUTSTANDING OWNED OWNER
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alpha Global Fixed Income Managers, Inc. (DE) 100 100% Company
Analytic Investment Management, Inc. (CA) 3,400 100% Company
Barrow, Hanley, Mewhinney & Strauss, Inc. (NV) 100 100% Company
Cambiar Investors, Inc. (CO) 100 100% Company
The Campbell Group, Inc. (DE) 100 100% Company
**/***Timber Pacific Properties, Inc. (OR) 100 100% The Campbell Group, Inc.
Chicago Asset Management Company (DE) 100 100% Company
Cooke & Bieler, Inc. (PA) 5,462 100% Company
**/***Baxter & Stewart, Inc. (PA) 100 100% Cooke & Bieler, Inc.
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 1
<PAGE>
August 23, 1994
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
Subsidiaries
------------
TOTAL CAPITAL PERCENTAGE OF
NAME STOCK ISSUED AND CAPITAL STOCK
OUTSTANDING OWNED OWNER
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
C. S. McKee & Company, Incorporated (PA) 21,100 Class A 100% Company
7,430 Class B
Fiduciary Management Associates, Inc. (DE) 900 100% Company
GSB Investment Management, Inc. (DE) 100 100% Company
Hamilton, Allen & Associates, Inc. (DE) 100 100% Company
HIMCO, INC., d/b/a Hanson Investment Management 400 100% Company
Company (CA)
Investment Counselors of Maryland, Inc. (MD) 7,500 100% Company
Investment Research Company (IL) 100 100% Company
John K. Dwight Asset Management Company, Inc. 100 100% Company
(DE)
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 2
<PAGE>
August 23, 1994
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
Subsidiaries
------------
TOTAL CAPITAL PERCENTAGE OF
NAME STOCK ISSUED AND CAPITAL STOCK
OUTSTANDING OWNED OWNER
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
**Ki Pacific Asset Management, Inc. (DE) 100 100% Company
**/*** Ki Pacific Asset Management (Bermuda) 12,000 100% Ki Pacific Asset Management,
Limited (Bermuda) Inc.
L&B Realty Advisors, Inc. (DE) 3,910 95% Company (3,710)
**/***L&B Institutional Property Managers, Inc. 1,000 100% L&B Realty Advisors, Inc.
(DE)
**/***L&B Institutional Property Managers of 1,000 100% L&B Institutional Property
Arizona, Inc. (AZ) Managers, Inc.
2/**L&B Institutional Property Managers of 1,000 100% L&B Institutional Property
California, Inc. (CA) Managers, Inc.
**/***L&B Institutional Property Managers of 1,000 100% L&B Institutional Property
Missouri, Inc. (MO) Managers, Inc.
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 3
<PAGE>
August 23, 1994
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
Subsidiaries
------------
TOTAL CAPITAL PERCENTAGE OF
NAME STOCK ISSUED AND CAPITAL STOCK
OUTSTANDING OWNED OWNER
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
**/***L&B Institutional Property Managers of New 1,000 100% L&B Institutional Property
York, Inc. (NY) Managers, Inc.
**/***L&B Institutional Property Managers of 1,000 100% L&B Institutional Property
North Carolina, Inc. (NC) Managers, Inc.
**/*** L&B Realty Acquisitions, Inc. (DE) 1,000 100% L&B Institutional Property
Managers, Inc.
Nelson, Benson & Zellmer, Inc. (CO) 100 100% Company
2/**Investment Trust Company (CO) 25,000 100% Nelson, Benson & Zellmer, Inc.
Newbold's Asset Management, Inc. (PA) 100 100% Company
Northern Capital Management Incorporated (WI) 100 100% Company
NWQ Investment Management Company, Inc. (MA) 200,000 100% United Asset Management
Holdings, Inc.
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 4
<PAGE>
August 23, 1994
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
Subsidiaries
------------
TOTAL CAPITAL PERCENTAGE OF
NAME STOCK ISSUED AND CAPITAL STOCK
OUTSTANDING OWNED OWNER
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Olympic Capital Management, Inc. (WA) 100 100% Company
**Regis Administrative Services, Inc. (DE) 100 100% Company
(formerly named Newco Acquisition Corp.)
*/**Regis Retirement Plan Services, Inc. (MA) 7,000 100% Company
(formerly named RFI Distributors, Inc.)
Rice, Hall, James & Associates (CA) 100 100% Company
The Rothschild Company (MD) 638.6316 100% Company
Sirach Capital Management, Inc. (WA) 100 100% Company
*Spectrum Asset Management, Inc. (CT) 100 100% Company
Sterling Capital Management Company (NC) 7,757 100% Company
2/*/**Sterling Capital Distributors, Inc. (NC) 5,000 100% Sterling Capital Management
Company
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 5
<PAGE>
August 23, 1994
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
Subsidiaries
------------
TOTAL CAPITAL PERCENTAGE OF
NAME STOCK ISSUED AND CAPITAL STOCK
OUTSTANDING OWNED OWNER
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Suffolk Capital Management, Inc. (DE) 100 100% Company
Thompson, Siegel & Walmsley, Inc. (VA) 2,898 100% Company
**UAM Investment Corporation (DE) 100 100% Company
**United Asset Management Holdings, Inc. (DE) 100 100% Company
Acadian Asset Management, Inc. (MA) 100 100% United Asset Management
Holdings, Inc.
Dewey Square Investors Corporation (DE) 100 100% United Asset Management
Holdings, Inc.
HT Investors, Inc. (DE) 100 100% Dewey Square Investors
Corporation
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 6
<PAGE>
August 23, 1994
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
Subsidiaries
------------
TOTAL CAPITAL PERCENTAGE OF
NAME STOCK ISSUED AND CAPITAL STOCK
OUTSTANDING OWNED OWNER
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
First Pacific Advisors, Inc. (MA) 200,000 100% United Asset Management
Holdings, Inc.
*/**/***FPA Fund Distributors, Inc. (CA) 100 100% First Pacific Advisors, Inc.
Hagler, Mastrovita & Hewitt, Inc. (DE) 50,000 100% United Asset Management
Holdings, Inc.
Hellman, Jordan Management Co., Inc. (DE) 449.5 100% United Asset Management
Holdings, Inc.
Pell, Rudman & Co., Inc. (DE) 100 100% United Asset Management
Holdings, Inc.
**/***Atlantic Trust Company, National 3 100% Pell, Rudman & Co., Inc.
Association
2/**Boston Harbor Trust Company, National 4,670 100% Pell, Rudman & Co., Inc.
Association
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 7
<PAGE>
August 23, 1994
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
Subsidiaries
------------
TOTAL CAPITAL PERCENTAGE OF
NAME STOCK ISSUED AND CAPITAL STOCK
OUTSTANDING OWNED OWNER
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Tom Johnson Investment Management, Inc. (MA) 100 100% United Asset Management
Holdings, Inc.
**UAM Realty Advisors Investment Corporation 100 100% United Asset Management
(DE) Holdings, Inc.
**United Asset Management Trademark, Inc. (DE) 100 100% Company
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 8
<PAGE>
August 23, 1994
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
Subsidiaries
------------
TOTAL CAPITAL PERCENTAGE OF
NAME STOCK ISSUED AND CAPITAL STOCK
OUTSTANDING OWNED OWNER
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
**Heitman Financial Ltd. (IL) 100 100% Company
**Heitman Financial Services Ltd. (IL) 1,000 100% Heitman Financial Ltd.
+/**Heitman FEW 2 Corp. (IL) 1,000 100% Heitman Financial Services Ltd.
+/**HMI Management Company (IL) 9,400 100% Heitman Financial Services Ltd.
+/**Philadelphian Realty Corporation (DE) 1,000 100% Heitman Financial Services Ltd.
+/**Heitman Holdings, Ltd. (DE) 1,000 100% Heitman Financial Services Ltd.
+/**Heitman Equities Corporation (DE) 1,000 100% Heitman Financial Services Ltd.
+/*/**Heitman Securities Corporation (DE) 1,000 100% Heitman Financial Services Ltd.
+/**HRC - OCC, Inc. (NV) 1,000 100% Heitman Financial Services Ltd.
(formerly named HRC, Inc.)
+/**Heitman Realty Corporation (IL) 1,000 100% Heitman Financial Services Ltd.
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 9
<PAGE>
August 23, 1994
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
Subsidiaries
------------
TOTAL CAPITAL PERCENTAGE OF
NAME STOCK ISSUED AND CAPITAL STOCK
OUTSTANDING OWNED OWNER
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
+/**Heitman Snowmass Corporation (IL) 100 100% Heitman Financial Services Ltd.
+/**HRC III, Inc. (NV) 100 100% Heitman Financial Services Ltd.
+/**H.E. One, Inc. (DE) 3,385 100% Heitman Financial Services Ltd.
+/**HRC IV, Inc. (NV) 100 100% Heitman Financial Services Ltd.
+/**HRC V, Inc. (NV) 100 100% Heitman Financial Services Ltd.
+/**HRC VI, Inc. (DE) 100 100% Heitman Financial Services Ltd.
+/**Castle Loan Corporation (IL) 1,000 100% Heitman Financial Services Ltd.
+/**HRC - LLC, Inc. (WY) 100 100% Heitman Financial Services Ltd.
+/**Heitman Financial U.K. Ltd. (IL) 1,000 100% Heitman Financial Ltd.
Heitman Advisory Corporation (IL) 1,000 100% Heitman Financial Ltd.
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 10
<PAGE>
August 23, 1994
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
Subsidiaries
------------
TOTAL CAPITAL PERCENTAGE OF
NAME STOCK ISSUED AND CAPITAL STOCK
OUTSTANDING OWNED OWNER
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
+/**Lender Services of Iowa Ltd. (IA) 1,000 100% Heitman Advisory Corporation
**Heitman Properties Ltd. (IL) 39,763 100% Heitman Financial Ltd.
+/**Heitman Properties of Rhode Island Ltd 1,000 100% Heitman Properties Ltd.
(formerly named Castle Leasing Inc.) (RI)
+/**Centre Properties Ltd. (IL) 1,000 100% Heitman Properties Ltd.
+/**Heitman Florida Management Inc. (DE) 1,000 100% Heitman Properties Ltd.
+/**Heitman Pennsylvania Management Inc. (DE) 1,000 100% Heitman Properties Ltd.
+/**HMC Insurance Agency, Inc. (IL) 1,000 100% Heitman Properties Ltd.
+/**Heitman Minnesota Management Inc. (DE) 1,000 100% Heitman Properties Ltd.
+/**Heitman Kentucky Management Inc. (DE) 1,000 100% Heitman Properties Ltd.
+/**Heitman Virginia Management Inc. (WI) 1,000 100% Heitman Properties Ltd.
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 11
<PAGE>
August 23, 1994
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
Subsidiaries
------------
TOTAL CAPITAL PERCENTAGE OF
NAME STOCK ISSUED AND CAPITAL STOCK
OUTSTANDING OWNED OWNER
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
+/**Heitman Ohio Management Inc. (DE) 1,000 100% Heitman Properties Ltd.
+/**Heitman Nevada Management Inc. (DE) 1,000 100% Heitman Properties Ltd.
+/**Heitman Wisconsin Management, Inc. 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of Iowa Ltd. (DE) 1,000 100% Heitman Properties Ltd.
+/**Heitman D.C. Properties Ltd. (DE) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of Louisiana Ltd. (DE) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of Michigan Ltd. (MI) 100 100% Heitman Properties Ltd.
+/**Heitman Properties of Missouri Ltd. (MO) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of Arizona Ltd. (AZ) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of Indiana Ltd. (IN) 1,000 100% Heitman Properties Ltd.
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 12
<PAGE>
August 23, 1994
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
Subsidiaries
------------
TOTAL CAPITAL PERCENTAGE OF
NAME STOCK ISSUED AND CAPITAL STOCK
OUTSTANDING OWNED OWNER
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
+/**Heitman Corporate Plaza, Inc. (KY) 100 100% Heitman Properties Ltd.
+/**Heitman Mayfair Corporation (NV) 2,500 100% Heitman Properties Ltd.
+/**Heitman Properties of Oregon Ltd. (OR) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of Mississippi Ltd. (MS) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of New Mexico Ltd. (NM) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of New York Ltd. (NY) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of North Carolina Ltd. (NC) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of South Carolina Ltd. (SC) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of Tennessee Ltd. (TN) 1,000 100% Heitman Properties Ltd.
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 13
<PAGE>
August 23, 1994
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
Subsidiaries
------------
TOTAL CAPITAL PERCENTAGE OF
NAME STOCK ISSUED AND CAPITAL STOCK
OUTSTANDING OWNED OWNER
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
+/**Heitman Properties of Texas Ltd. 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of Nebraska Ltd. (NE) 1,000 100% Heitman Properties Ltd.
+/**Property Security Services Ltd. (MI) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of Alabama Ltd. (DE) 10,000 100% Heitman Properties Ltd.
**United Asset Management U.K. Holdings, 1 100% Company
Inc. (DE)
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 14
<PAGE>
August 23, 1994
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
Subsidiaries
------------
TOTAL CAPITAL PERCENTAGE OF
NAME STOCK ISSUED AND CAPITAL STOCK
OUTSTANDING OWNED OWNER
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
**Murray Johnstone Holdings Limited (Scotland) 8,092,361 100% United Asset Management U.K.
Holdings, Inc.
1/**Murray Johnstone International Limited 1,000,000 100% Murray Johnstone Holdings
(Scotland) (ordinary) Limited
400,000 100%
(preferred)
1/**Murray Johnstone Limited (Scotland) 1,001,000 100% Murray Johnstone Holdings
Limited
1/**Murray Johnstone Investment Trust Management 2 100% Murray Johnstone Limited
Limited (Scotland)
1/**Murray Johnstone Developments Limited 2 100% Murray Johnstone Limited
1/**Murray Johnstone Europe Limited (Scotland) 2 100% Murray Johnstone Limited
1/**Murray Johnstone Asset Management Limited 500 100% Murray Johnstone Limited
(Scotland)
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 15
<PAGE>
August 23, 1994
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
Subsidiaries
------------
TOTAL CAPITAL PERCENTAGE OF
NAME STOCK ISSUED AND CAPITAL STOCK
OUTSTANDING OWNED OWNER
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1/**Murray Johnstone Personal Asset Management 100,000 60% Murray Johnstone Limited
Limited (Scotland) (ordinary)
400,000 100%
(preferred)
1/**Murray Johnstone (General Partner) Limited 5,000 100% Murray Johnstone Limited
(England)
1/**BIG (General Partner) Limited (Scotland) 5,000 100% Murray Johnstone Limited
1/**Murray Johnstone Unit Trust Management 50,000 100% Murray Johnstone Limited
Limited (Scotland)
1/**Embankment Properties (Management) Limited 25,000 67% Murray Johnstone Limited
(Jersey)
1/**Murray Johnstone (Jersey) Limited 25,000 100% Murray Johnstone Limited
(Jersey)
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 16
<PAGE>
August 23, 1994
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
Subsidiaries
------------
TOTAL CAPITAL PERCENTAGE OF
NAME STOCK ISSUED AND CAPITAL STOCK
OUTSTANDING OWNED OWNER
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1/**Murray Johnstone Buy-out Management (Jersey) 27,824 100% Murray Johnstone Limited
Limited (Jersey)
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 17
<PAGE>
EXHIBIT L TO
AMENDED AND
RESTATED CREDIT AGREEMENT
SUBSCRIPTION RIGHTS, WARRANTS, ETC.
(1) Recapitalization Agreement dated as of December 17, 1993 by and among
United Asset Management Corporation ("UAM"), L&B Realty Advisors, Inc.
("L&B"), and M. Thomas Lardner ("Lardner") which contains provisions
with respect to the payment of dividends to Lardner.
(2) As a stockholder of L&B, Lardner receives his proportionate share of
"Stockholders' Share of Revenues" under the Revenue Sharing Agreement
by and among UAM, L&B, Lardner, Daniel L. Plumlee, and G. Andrew
Smith.
(3) Stock Restriction, Stock Purchase and Sale and Non-Competition
Agreement dated as of June 24, 1992 by and among UAM, L&B, and Lardner
under the provisions of which, among other things, UAM has a right to
purchase the shares of stock of L&B of Lardner and Lardner has the
right to require UAM to purchase all of Lardner's shares of L&B.
(4) Option Agreement between Murray Johnstone Limited ("MJ") and David
Hamilton Hume ("Hume") under the terms of which, among other things,
(a) Hume grants to MJ an option entitling MJ to require Hume to sell
all of the shares of Murray Johnstone Personal Asset Management
Limited ("MJPAM") held by Hume to MJ, and (b) MJ grants to Hume an
option entitling Hume to require MJ to purchase all of the shares of
MJPAM held by Hume. There are similar Option Agreements between MJ and
each of Allen Topley, David Robert Barber, and Alexander Charles
Douglas Clay. In addition, there is a Deed of Adherence by Derek
Ronald Strauss in which Mr. Strauss, in contemplation of becoming a
shareholder of MJPAM, agrees to be bound by all of the terms and
conditions of the Option Agreement.
<PAGE>
EXHIBIT M-1 TO
AMENDED AND RESTATED
CREDIT AGREEMENT
--------------------
August 29, 1994
Morgan Guaranty Trust Company of New York,
as Agent
60 Wall Street
New York, New York 10260
and
The First National Bank of Boston,
as Collateral Agent
150 Royall Street
Canton, Massachusetts 02021
and
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Credit Lyonnais New York Branch
c/o Credit Lyonnais Representative Office
53 State Street
Boston, Massachusetts 02109
Credit Lyonnais Cayman Island Branch
c/o Credit Lyonnais Representative Office
53 State Street
Boston, Massachusetts 02109
Mellon Bank, N.A.
Mellon Bank Center
1735 Market Street, 6th Floor
Philadelphia, Pennsylvania 19101
<PAGE>
Page 2
August 29, 1994
Chemical Bank
4 New York Plaza
New York, New York 10004-2477
The Daiwa Bank, Limited
233 South Wacker Drive
Suite 5400
Chicago, Illinois 60606
Bank Hapoalim B.M.
70 Federal Street
Boston, Massachusetts 02110
Shawmut Bank, N.A.
One Federal Street
Boston, Massachusetts 02211
NationsBank, N.A.
10 Light Street
Baltimore, Maryland 21201
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
Deutsche Bank AG
New York Branch/Cayman Islands Branch
31 West 52nd Street
New York, New York 10019
BayBank Boston, N.A.
175 Federal Street - 10th Floor
Boston, Massachusetts 02110
Fleet Bank of Massachusetts
75 State Street
Boston, Massachusetts 02109
<PAGE>
Page 3
August 29, 1994
Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
as Banks under the Credit Agreement referred to below.
Ladies and Gentlemen:
We have acted as counsel to United Asset Management
Corporation, a Delaware corporation (the "Company"), United Asset
Management Holdings, Inc., a Delaware corporation ("UAM
Holdings") and a wholly-owned subsidiary corporation of the
Company, United Asset Management Trademark, Inc., a Delaware
corporation ("UAM Trademark") and a wholly-owned subsidiary
corporation of the Company, UAM Investment Corporation, a
Delaware corporation ("UAM Investment") and a wholly-owned
subsidiary corporation of the Company, United Asset Management
U.K. Holdings, Inc., a Delaware corporation ("UAM U.K. Holdings")
and a wholly-owned subsidiary corporation of the Company, UAM
Realty Advisors Investment Corporation, a Delaware corporation
("UAM Realty Advisors") and a wholly-owned subsidiary corporation
of UAM Holdings, and Dewey Square Investors Corporation, a
Delaware corporation ("DSI") and a wholly-owned subsidiary
corporation of UAM Holdings (UAM Holdings, UAM Trademark, UAM
Investment, UAM U.K. Holdings, UAM Realty Advisors, and DSI are
hereinafter collectively called the "Guaranty Subsidiaries"), in
connection with the preparation, execution, and delivery of (1)
the Amended and Restated Credit Agreement dated as of August __,
1994 (the "Credit Agreement") by and among the Company, Morgan
Guaranty Trust Company of New York, The First National Bank of
Boston, Chemical Bank, Credit Lyonnais New York Branch, Credit
Lyonnais Cayman Island Branch, Mellon Bank, N.A., Bank Hapoalim
B.M., Shawmut Bank, N.A., Deutsche Bank AG New York Branch/Cayman
Islands Branch, NationsBank, N.A., The Daiwa Bank, Limited, Brown
Brothers Harriman & Co., BayBank Boston, N.A., Fleet Bank of
Massachusetts, and Wachovia Bank of Georgia, N.A. (the "Banks"),
Morgan Guaranty Trust Company of New York, as Agent (the
"Agent"), and The First National Bank of Boston, as Collateral
Agent (the "Collateral Agent"), (2) the promissory notes dated
August __, 1994 of the Company evidencing the obligation of the
<PAGE>
Page 4
August 29, 1994
Company to each Bank to repay the Loans on the Termination Date
or such earlier date as provided in the Credit Agreement (the
"Notes"), and (3) the Guaranty and Security Documents
Confirmation and Amendment dated as of August __, 1994 (the
"Confirmation and Amendment") by and among the Company, the
Guaranty Subsidiaries, Heitman Financial Ltd., an Illinois
corporation, the Agents, and the Banks. Capitalized terms used
herein and not otherwise defined herein have the meanings
assigned to them in the Credit Agreement. The Credit Agreement,
the Notes, and the Confirmation and Amendment are hereinafter
collectively called the "Credit Documents". This opinion is
being furnished to you pursuant to Section 4.1(h) of the Credit
Agreement. The Company has instructed us to prepare this opinion
and deliver it to the Banks and the Agents for their benefit.
As such counsel, we have examined the originals or copies,
certified or otherwise identified to our satisfaction, of the
following:
(a) the Credit Documents;
(b) a copy, certified as of a recent date by the Secretary
of State of the State of Delaware, of the charter
documents of each of the Company and the Guaranty
Subsidiaries;
(c) certificates of recent date of the Secretary of State
of the State of Delaware as to the incorporation, legal
existence, and corporate good standing of each of the
Company and the Guaranty Subsidiaries;
(d) a copy, certified as of the date of the Credit
Agreement by the Secretary or Assistant Secretary of
each of the Company and the Guaranty Subsidiaries, of
the By-Laws of each of the Company and the Guaranty
Subsidiaries;
(e) a copy, certified as of the date of the Credit
Agreement by the Secretary or Assistant Secretary of
each of the Company and the Guaranty Subsidiaries, of
<PAGE>
Page 5
August 29, 1994
resolutions adopted by the Board of Directors of each
of the Company and the Guaranty Subsidiaries
authorizing the execution and delivery of the Credit
Documents to which each is a party;
(f) a certificate as of the date of the Credit Agreement of
the Secretary or Assistant Secretary of each of the
Company and the Guaranty Subsidiaries as to the
incumbency and signatures of officers of each of the
Company and the Guaranty Subsidiaries; and
(g) such other certificates, documents, and records as we
have deemed necessary for the purposes of this opinion.
We have also examined and relied upon the representations,
warranties, and agreements as to matters of fact contained in the
Credit Documents and in certificates delivered to you and to us
in connection therewith and herewith.
We have assumed the genuineness of all signatures (other
than those of the Company, the Guaranty Subsidiaries, and the
officers signing certificates on behalf of the Company and the
Guaranty Subsidiaries), the authenticity of all documents
submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified or
photostatic copies and the authenticity of the originals of such
latter documents. We have assumed the validity and binding
effect of the Credit Documents under the substantive law of the
State of New York, the jurisdiction whose law has been chosen by
the parties as governing the Credit Documents.
Our opinions expressed in paragraph 1. below, insofar as
they relate to the legal existence and corporate good standing of
each of the Company and the Guaranty Subsidiaries, are based
solely on the certificates referred to in clause (c) of the
second paragraph of this opinion and are limited accordingly,
and, as to such matters, our opinion is rendered as of the
respective dates of such certificates, and, as to such matters,
from the respective dates of such certificates to the date
<PAGE>
Page 6
August 29, 1994
hereof, our opinion is rendered to our knowledge based on due
inquiry of the Company.
We have acted as general counsel to each of the Company and
the Guaranty Subsidiaries (other than to DSI as to which we are
acting as special counsel) with respect to particular matters as
to which we have been consulted by them, although in rendering
this opinion we have not made any independent review or
investigation of any litigation, proceeding, or investigation
pending, or threatened, against the Company or any of the
Guaranty Subsidiaries, or of any agreement or instrument binding
on the Company or any of the Guaranty Subsidiaries, except that
we have made inquiries with respect to such matters and have
relied upon representations of an officer of the Company and each
of the Guaranty Subsidiaries and nothing has come to our
attention or, to our knowledge, is contained in our files
relating to the Company or the Guaranty Subsidiaries leading us
to question the accuracy of such information.
We have assumed that the Agent, the Collateral Agent, and
each of the Banks has all requisite power and authority and has
taken all necessary action to enter into, execute, and deliver
all of the Credit Documents to which each is a party and to
effect the transactions contemplated by the Credit Documents and
that each of the Credit Documents to which the Agent, the
Collateral Agent, and each of the Banks is a party constitutes
the legal, valid, and binding obligation of the Agent, the
Collateral Agent, and each of the Banks. We have assumed that
the Agent, the Collateral Agent, and each of the Banks has all
requisite power and authority under any law or regulation of the
United States of America or any political subdivision thereof to
enter into the transactions contemplated by the Credit Documents.
The opinions expressed herein are qualified to the extent
that the validity or enforceability of any provision of the
Credit Documents may be subject to or limited by (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and
conveyance, and other similar laws of general application
relating to or affecting the rights and remedies of creditors and
secured parties generally, which laws may be in effect from time
<PAGE>
Page 7
August 29, 1994
to time, (ii) general principles of equity, whether applied in a
proceeding in equity or at law, (iii) the application by courts
of competent jurisdiction of laws, rules, regulations, court
decisions, and constitutional requirements deemed to have a
paramount public interest, (iv) limitations on the legality,
validity, binding effect, or enforceability of waivers,
provisions in the nature of penalties, rights of set-off,
exculpatory provisions, and indemnification provisions contained
in the Credit Documents to the extent the same may be limited by
public policy, equitable principles, or applicable laws, rules,
regulations, court decisions, and constitutional requirements,
and (v) any duty of good faith.
We are members of the bar of The Commonwealth of
Massachusetts and do not express any opinion with respect to the
laws or the regulations of any jurisdiction other than the
federal laws of the United States of America, the General
Corporation Law of the State of Delaware, and the laws of The
Commonwealth of Massachusetts.
We call to your attention that the Credit Agreement provides
that the Credit Agreement and the rights and obligations of the
parties thereunder, under the Notes, and under the other Loan
Documents shall be governed by and construed and interpreted in
accordance with the laws of the State of New York applicable to
contracts made and to be performed wholly within the State of New
York without regard to any choice or conflict of laws principles
(and a similar but not identical provision is also contained in
the other Credit Documents), and that we are not qualified to
practice in the State of New York and, therefore, as we express
no opinion on the laws and the regulations of the State of New
York, the opinions expressed in the second sentence of
paragraph 3. below and the opinions expressed in paragraph 4.
below are subject to the qualification that they may be affected
by the applicability of the laws of the State of New York, in
respect of which, with your approval, and without consulting New
York counsel, we are expressing no opinion.
Based upon and subject to the foregoing, we are of the
opinion that:
<PAGE>
Page 8
August 29, 1994
1. Each of the Company and the Guaranty Subsidiaries is a
corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware and each of the
Company and the Guaranty Subsidiaries has all requisite corporate
power to own its property and to conduct its business as now
conducted. None of the Company and the Guaranty Subsidiaries is
an "investment company," or a company controlled by an
"investment company," registered or required to be registered
under the Investment Company Act of 1940, as amended. None of
the Company and the Guaranty Subsidiaries (other than DSI) is
registered or required to be registered as an investment adviser
under the Investment Advisers Act of 1940, as amended. DSI is
registered as an investment adviser under the Investment Advisers
Act of 1940, as amended, and, to our knowledge, such registration
has not been withdrawn or revoked. None of the Company and the
Guaranty Subsidiaries is required to be qualified as a foreign
corporation in any state in which it is not qualified and in
which the failure to qualify would have a material adverse effect
upon its business, operations, or property.
2. The execution and delivery by each of the Company and
the Guaranty Subsidiaries of the Credit Documents to which it is
a party and the performance by each of the Company and the
Guaranty Subsidiaries of its obligations thereunder are within
the corporate power and authority of each of the Company and the
Guaranty Subsidiaries, have been authorized by proper corporate
proceedings of each of the Company and the Guaranty Subsidiaries,
and do not contravene any presently existing provision of law of
the United States of America or The Commonwealth of Massachusetts
or the General Corporation Law of the State of Delaware or the
Restated Certificate of Incorporation (or Certificate of
Incorporation or Certificate of Incorporation, as amended, as the
case may be) or the By-Laws of each of the Company and the
Guaranty Subsidiaries, or, to our knowledge, based on due inquiry
of each of the Company and the Guaranty Subsidiaries, contravene
any provision of, or constitute a default or an event of default
under, any other agreement or instrument known to us and binding
on the Company or any of the Guaranty Subsidiaries. The
execution and delivery by each of the Company and the Guaranty
<PAGE>
Page 9
August 29, 1994
Subsidiaries of the Credit Documents to which it is a party and
the performance by each of the Company and the Guaranty
Subsidiaries of its obligations thereunder do not, and will not,
give rise to any lien or security interest in favor of any Person
other than the Collateral Agent, for the ratable benefit of the
Banks and for the benefit of the Agents.
3. Each of the Company and the Guaranty Subsidiaries duly
executed and delivered the Credit Documents to which it is a
party. Each of the Credit Documents to which each of the Company
and the Guaranty Subsidiaries is a party is the legal, valid, and
binding obligation of the Company and the Guaranty Subsidiaries
enforceable against the Company and the Guaranty Subsidiaries in
accordance with its terms.
4. To our knowledge, the execution, delivery, and
performance of the Credit Documents to which each of the Company
and the Guaranty Subsidiaries is a party by each of the Company
and the Guaranty Subsidiaries, as the case may be, and the
transactions contemplated thereby as to the Company and the
Guaranty Subsidiaries do not require any approval or consent of,
or the filing or registration with, any governmental or other
agency or authority.
5. To our knowledge, based on due inquiry of the Company,
as of the date hereof, all of the Subsidiaries of the Company are
listed in Exhibit K to the Credit Agreement. The Company, except
as disclosed in Exhibit K to the Credit Agreement and except as
required by Section 8.16 of the Credit Agreement, is the record
and beneficial holder of all of the issued and outstanding shares
of capital stock of each of the Subsidiaries of the Company. To
our knowledge, based on due inquiry of the Company, except as
disclosed in Exhibit L to the Credit Agreement, (a) all shares of
capital stock of the Subsidiaries of the Company have been
validly issued and are fully paid and nonassessable, no rights to
subscribe to any additional shares of capital stock of the
Subsidiaries of the Company have been granted, and no options,
warrants, or similar rights to acquire shares of capital stock of
the Subsidiaries of the Company are outstanding, except in favor
of the Company or a Subsidiary of the Company, and (b) with
<PAGE>
Page 10
August 29, 1994
respect to any Subsidiary of the Company which is not wholly-
owned by the Company or a Subsidiary of the Company, no dividend,
liquidation, or other preferences are in effect, except in favor
of the Company or a Subsidiary of the Company, and neither the
Company nor any Subsidiary of the Company has entered into any
agreement obligating the Company to purchase or sell any capital
stock of any Subsidiary of the Company owned beneficially or of
record by any Person.
6. To our knowledge, based on due inquiry of the Company,
except as set forth in Exhibit J to the Credit Agreement, there
is no litigation, proceeding, or investigation pending, or
threatened in writing (including, without limitation, by the
Internal Revenue Service or any other governmental agency),
against the Company or any of the Guaranty Subsidiaries which, if
adversely determined, would result in a material judgment not
substantially covered by insurance or would otherwise have a
material adverse effect on the assets, business, financial
condition, or prospects of the Company or any of the Guaranty
Subsidiaries.
7. The execution and delivery by each of the Company and
the Guaranty Subsidiaries of the Credit Documents to which it is
a party and the performance by each of the Company and the
Guaranty Subsidiaries of its obligations thereunder will not
violate Regulations G, U, or X of the Board of Governors of the
Federal Reserve System.
8. For purposes of the opinion set forth in this paragraph,
it is assumed that the State of New York is the location of
negotiation of and of contracting of the Credit Documents and of
the principal place of business of Morgan, Chemical Bank, and
Credit Lyonnais New York Branch, and that the Credit Documents
require that the obligations to the Banks arising thereunder be
paid in the State of New York. Based on and subject to the
foregoing, as well as the relevant qualifications and assumptions
set forth above, we are of the opinion that, in any action or
proceeding arising out of or relating to the Credit Documents in
any court of The Commonwealth of Massachusetts or in any federal
court sitting in The Commonwealth of Massachusetts, such court
<PAGE>
Page 11
August 29, 1994
would recognize and give effect to the provisions of the Credit
Documents that they shall be governed by and construed and
interpreted (or enforced) in accordance with the laws of the
State of New York applicable to contracts made and to be
performed wholly within the State of New York, except with
respect to: (i) laws, rules, regulations, court decisions, and
constitutional requirements of The Commonwealth of Massachusetts
deemed to express paramount public policy; (ii) matters governed
by the provisions of Chapter 93A of the Massachusetts General
Laws.
Very truly yours,
HILL & BARLOW, a Professional
Corporation
By:__________________________
Joseph D. Hinkle, a
Member of the firm
CHUT/37495
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT N TO
UAM ASSET AND CONTRACT AMORTIZATION HISTORY FOR PURCHASE ACQUISITIONS AMENDED AND
RESTATED CREDIT AGREEMENT
GROSS TOTAL
DATE ASSETS AT ASSETS AT PERCENT CONTRACTS AMORTIZATION NET CONTRACTS
AFFILIATE ACQUIRED ACQUISITION 12/31/91 CHANGE CHANGE AT 12/31/91 AT 12/31/91 AT 12/31/91
- --------- -------- ------------- -------------- ------------- ------ ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AIM 5/85 869,728,000 1,449,204,000 579,476,000 66.6% 9,291,000 4,704,000 4,587,000
BHMS 1/88 4,975,000,000 11,172,572,000 6,197,572,000 124.6% 106,088,000 27,072,000 79,016,000
CGI 5/89 211,000,000 626,898,000 415,898,000 197.1% 10,105,000 2,004,000 8,101,000
C&B 2/86 2,306,000,000 4,628,547,000 2,322,547,000 100.7% 39,062,000 13,369,000 25,693,000
DSI/HTI 5/89 3,400,000,000 3,423,054,000 23,054,000 0.7% 21,373,000 3,701,000 17,672,000
FMA 6/86 474,000,000 1,195,041,000 721,041,000 152.1% 6,496,000 2,839,000 3,657,000
FPA 6/91 2,700,000,000 3,046,950,000 346,950,000 12.9% 51,016,000 1,804,000 49,212,000
HMH 12/86 1,432,659,000 1,532,116,000 99,457,000 6.9% 20,164,000 6,601,000 13,563,000
HA&A 2/84 818,328,000 1,155,626,000 337,298,000 41.2% 8,751,000 8,751,000 0
HJ 8/84 747,721,000 2,493,681,000 1,745,960,000 233.5% 16,339,000 11,494,000 4,845,000
ICM 12/86 2,001,000,000 3,741,997,000 1,740,997,000 87.0% 19,410,000 6,526,000 12,884,000
NBZ 8/83 217,561,000 531,820,000 314,259,000 144.4% 3,680,000 2,304,000 1,376,000
NAM 9/90 4,282,877,000 8,114,486,000 3,831,609,000 89.5% 53,934,000 4,567,000 49,367,000
NCM 1/86 998,118,000 1,424,354,000 426,236,000 42.7% 16,005,000 5,843,000 10,162,000
OCM 6/86 1,680,291,000 1,432,950,000 (247,341,000) -14.7% 22,726,000 8,153,000 14,573,000
RHJ 5/87 683,000,000 659,947,000 (23,053,000) -3.4% 8,961,000 3,043,000 5,918,000
TRC 12/86 853,126,000 913,792,000 60,666,000 7.1% 18,502,000 4,865,000 13,637,000
SIRACH 1/89 747,314,000 2,873,229,000 2,125,915,000 284.5% 14,337,000 4,146,000 10,191,000
SCM 12/84 706,000,000 786,138,000 80,138,000 11.4% 11,457,000 4,046,000 7,411,000
TSW 12/84 1,334,511,000 2,612,442,000 1,277,931,000 95.8% 16,522,000 5,762,000 10,760,000
</TABLE>
<PAGE>
EXHIBIT O TO
CREDIT AGREEMENT
----------------
INDEBTEDNESS
------------
1. Money Market Loans made to the Company by Shawmut in the following
principal amounts and maturing on the following dates:
Principal Maturity
Amount Date
--------- --------
$ 5,000,000 8/30/94
$1,000,000 8/30/94
$14,000,000 9/6/94
2. Money Market Loans made to the Company by Mellon in the following
principal amounts and maturing on the following dates:
Principal Maturity
Amount Date
--------- --------
$ 8,000,000 8/30/94
$12,000,000 9/6/94
3. Money Market Loans made to the Company by Credit Lyonnais in the
following principal amounts and maturing on the following dates:
Principal Maturity
Amount Date
--------- --------
$10,000,000 8/31/94
<PAGE>
UNITED ASSET MANAGEMENT CORPORATION
Exhibit 11
CALCULATION OF EARNINGS PER SHARE
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- -------------------
1994 1993(1) 1994 1993(1)
---- ---- ---- ----
<S> <C> <C> <C> <C>
Common and common equivalent shares:
Net income............................. $14,756 $13,461 $43,954 $38,536
Adjustments thereto (2)................ -- -- -- --
------- ------- ------- -------
Adjusted net income.................... $14,756 $13,461 $43,954 $38,536
------- ------- ------- -------
------- ------- ------- -------
Average shares outstanding............. 28,060 26,477 28,082 25,922
Adjustments thereto (3)................ 1,494 2,974 1,516 2,743
------- ------- ------- -------
Shares used in computation............. 29,554 29,451 29,598 28,665
------- ------- ------- -------
------- ------- ------- -------
Per Share................................ $ 0.50 $ 0.46 $ 1.49 $ 1.34
------- ------- ------- -------
------- ------- ------- -------
Common shares -- assuming full dilution:
Net income............................. $14,756 $13,461 $43,954 $38,536
Adjustments thereto (2)................ -- -- -- --
------- ------- ------- -------
Adjusted net income.................... $14,756 $13,461 $43,954 $38,536
------- ------- ------- -------
------- ------- ------- -------
Average shares outstanding............. 28,060 26,477 28,082 25,922
Adjustments thereto (3)................ 1,572 3,163 1,647 3,567
------- ------- ------- -------
Shares used in computation............. 29,632 29,640 29,729 29,489
------- ------- ------- -------
------- ------- ------- -------
Per Share................................ $ 0.50 $ 0.45 $ 1.48 $ 1.31
------- ------- ------- -------
------- ------- ------- -------
<FN>
- -------------------------
(1) Restated due to a pooling of interests transaction completed in the fourth
quarter of 1993.
(2) The proceeds from the exercise of stock options and warrants in accordance
with the modified treasury stock method are first used to buy back up to
20% of the Company's common stock at the average price for the period in
the primary calculation and at the higher of the average or closing price
in the fully diluted calculation. Any remaining proceeds are used to
retire debt, and this adjusts income for interest assumed to be saved net
of income tax from the use of such proceeds.
(3) Adjusts shares for stock options and warrants under the modified treasury
stock method and contingently issuable shares based on the probability of
issuance, after adjusting for the stock assumed repurchased in accordance
with (2) above.
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This financial data schedule contains summary financial information extracted
from the company's nine months ended September 30, 1994 consolidated statement
of income and the condensed consolidated balance sheet found on pages F-1 and
F-2 of Form 10-Q. This information is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 73,561
<SECURITIES> 0
<RECEIVABLES> 73,890
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 154,557
<PP&E> 45,597
<DEPRECIATION> 28,948
<TOTAL-ASSETS> 681,962<F1>
<CURRENT-LIABILITIES> 97,465
<BONDS> 158,965<F2>
<COMMON> 283
0
0
<OTHER-SE> 389,309
<TOTAL-LIABILITY-AND-EQUITY> 681,962
<SALES> 0
<TOTAL-REVENUES> 355,787
<CGS> 0
<TOTAL-COSTS> 229,642
<OTHER-EXPENSES> 40,200<F3>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,028
<INCOME-PRETAX> 76,917
<INCOME-TAX> 32,963
<INCOME-CONTINUING> 43,954
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 43,954
<EPS-PRIMARY> 1.49
<EPS-DILUTED> 1.48
<FN>
<F1>Includes $453,511,000 of cost assigned to contracts acquired, net.
<F2>Represents $41,000,000 in senior notes payable and $117,965,000 in
subordinated notes payable.
<F3>Represents amortization of cost assigned to contracts acquired for the nine
months ended September 30, 1994.
</FN>
</TABLE>
