<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
---------------------------------------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------------- --------------------
Commission File No. 1-9818
-------------------------------------------------------
ALLIANCE CAPITAL MANAGEMENT L.P.
- - -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3434400
- - ------------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1345 Avenue of the Americas, New York, NY 10105
- - -------------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(212) 969-1000
- - -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
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.
Yes X No
---------- ----------
The number of Units representing assignments of beneficial ownership of Limited
Partnership Interests outstanding as of March 31, 1994 was 72,809,560 Units.
<PAGE>
ALLIANCE CAPITAL MANAGEMENT L.P.
Index to Form 10-Q
Part I
FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS PAGE
Condensed Consolidated Statements of Financial Condition 2
Condensed Consolidated Statements of Income 3
Condensed Consolidated Statements of Changes in
Partners' Capital 4
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 6-9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 10-12
Part II
OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS 13-14
Item 2. CHANGES IN SECURITIES 14
Item 3. DEFAULTS UPON SENIOR SECURITIES 14
Item 4. SUBMISSION OF MATTERS TO A VOTE OF 14
SECURITY HOLDERS
Item 5. OTHER INFORMATION 14-15
Item 6. EXHIBITS AND REPORTS ON FORM 8-K 15
- 1 -
<PAGE>
Part I
FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
ALLIANCE CAPITAL MANAGEMENT L.P.
Condensed Consolidated Statements of Financial Condition
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
ASSETS 3/31/94 12/31/93
------- --------
<S> <C> <C>
Cash and cash equivalents....................... $ 76,855 $ 96,315
Fees receivable:
Alliance mutual funds......................... 31,178 29,594
Other affiliated clients...................... 12,206 17,262
Institutional clients......................... 42,639 40,685
Receivable from brokers and dealers for sale
of shares of Alliance mutual funds............ 70,940 103,921
Other receivables............................... 5,463 4,894
Investments in Alliance mutual funds............ 45,069 56,552
Other investments............................... 4,762 4,966
Furniture, equipment and leasehold
improvements, net............................. 32,332 28,767
Intangible assets, net.......................... 99,456 30,707
Deferred sales commissions, net................. 162,696 140,558
Prepaid expenses and other assets............... 10,468 7,066
-------- --------
Total assets................................ $594,064 $561,287
-------- --------
-------- --------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses........... $ 72,570 $ 56,526
Payable to Alliance mutual funds for share
purchases..................................... 98,425 145,684
Accrued expenses under employee benefit plans... 46,846 35,597
Debt............................................ 159,377 109,435
-------- --------
Total liabilities......................... 377,218 347,242
Partners' capital................................. 216,846 214,045
-------- --------
Total liabilities and partners' capital... $594,064 $561,287
-------- --------
-------- --------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
- 2 -
<PAGE>
ALLIANCE CAPITAL MANAGEMENT L.P.
Condensed Consolidated Statements of Income
(unaudited)
(in thousands, except per Unit amounts)
<TABLE>
<CAPTION>
Three Months Ended
--------------------
3/31/94 3/31/93
-------- --------
<S> <C> <C>
Revenues:
Investment advisory and services fees:
Alliance mutual funds............................... $ 50,911 $ 37,446
Other affiliated clients............................ 10,965 7,655
Institutional clients............................... 38,783 35,427
Distribution plan fees from Alliance mutual funds..... 34,645 22,439
Shareholder servicing and administration fees......... 9,734 7,430
Other revenues........................................ 3,527 2,028
-------- --------
148,565 112,425
-------- --------
Expenses:
Employee compensation and benefits................... 42,389 35,269
General and administrative........................... 16,424 16,802
Interest............................................. 2,223 2,735
Promotion and servicing:
Distribution plan payments to financial
intermediaries:
Affiliated..................................... 4,956 2,893
Unaffiliated................................... 22,338 14,184
Amortization of deferred sales commissions......... 11,980 7,947
Other.............................................. 12,208 6,383
Amortization of intangible assets.................... 1,891 1,743
Nonrecurring transaction expenses.................... -- 7,300
-------- --------
114,409 95,256
-------- --------
Income before income taxes and cumulative effect
of accounting change................................. 34,156 17,169
Income taxes......................................... 2,732 1,474
-------- --------
Income before cumulative effect of
accounting change.................................... 31,424 15,695
Cumulative effect of change in accounting
for income taxes................................... -- 900
-------- --------
Net income............................................. $ 31,424 $ 16,595
-------- --------
-------- --------
Earnings per Unit:
Income before cumulative effect of accounting change $ .42 $ .22
Cumulative effect of change in accounting
for income taxes................................... -- .01
-------- --------
Net income per Unit.................................. $ .42 $ .23
-------- --------
-------- --------
Weighted average number of Units and Unit
equivalents outstanding.............................. 73,913 70,757
-------- --------
-------- --------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
- 3 -
<PAGE>
ALLIANCE CAPITAL MANAGEMENT L.P.
Condensed Consolidated Statements of
Changes in Partners' Capital
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
--------------------
3/31/94 3/31/93
-------- --------
<S> <C> <C>
Partners' capital -- beginning of period.............. $214,045 $160,626
Net income.......................................... 31,424 16,595
Capital contribution received from Alliance
Capital Management Corporation.................... 476 517
Distributions to partners........................... (29,925) (18,950)
Unit options exercised.............................. 814 425
Foreign currency translation adjustment............. 12 43
-------- --------
Partners' capital end of period....................... $216,846 $159,251
-------- --------
-------- --------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
- 4 -
<PAGE>
ALLIANCE CAPITAL MANAGEMENT L.P.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands, except per Unit amounts)
<TABLE>
<CAPTION>
Three Months Ended
-----------------------
3/31/94 3/31/93
-------- --------
<S> <C> <C>
Net income ................................................ $ 31,424 $ 16,595
Adjustments to reconcile net income to
net cash provided from operating activities:
Amortization and depreciation............................ 15,824 11,536
Deferred compensation expense............................ 979 965
Cumulative effect of change in accounting for
income taxes.......................................... -- (900)
Other, net............................................... 12 (25)
Changes in assets and liabilities:
Decrease in fees receivable from Alliance mutual funds,
other affiliated clients and institutional clients... 5,290 1,039
(Increase) decrease in receivables from brokers and
dealers for sale of shares of Alliance mutual funds.. 32,981 (23,646)
(Increase) in other receivables........................ (491) (1,023)
(Increase) in deferred sales commissions............... (34,117) (9,268)
(Increase) decrease in prepaid expenses and
other assets......................................... (3,546) 812
Increase in accounts payable and accrued expenses..... 11,191 2,789
Increase (decrease) in payable to Alliance
mutual funds for share purchases..................... (47,259) 28,056
Increase in accrued expenses under employee benefit
plans, less deferred compensation.................... 10,613 8,824
-------- --------
Net cash provided from operating activities........ 22,901 35,754
-------- --------
Cash flows from investing activities:
Purchase of Alliance mutual funds ........................ (21,540) (13,461)
Proceeds from sale of Alliance mutual funds............... 33,023 1,100
Acquisition of Shields and Regent ........................ (70,639) --
Decrease in other investments............................. 204 659
Additions to furniture, equipment and
leasehold improvements, net............................ (4,385) (790)
-------- --------
Net cash used in investing activities.............. (63,337) (12,492)
-------- --------
Cash flows from financing activities:
Proceeds from borrowings.................................. 70,000 --
Repayment of debt......................................... (20,058) (288)
Distributions to partners................................. (29,925) (18,955)
Capital contribution received from Alliance Capital
Management Corporation................................. 133 133
Unit options exercised.................................... 814 425
-------- --------
Net cash provided from (used in) financing
activities....................................... 20,964 (18,685)
-------- --------
Effect of exchange rate changes on cash and
cash equivalents.......................................... 12 43
-------- --------
Net increase (decrease) in cash and cash equivalents........ (19,460) 4,620
Cash and cash equivalents at beginning of period............ 96,315 76,787
-------- --------
Cash and cash equivalents at end of period.................. $ 76,855 $ 81,407
-------- --------
-------- --------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
- 5 -
<PAGE>
ALLIANCE CAPITAL MANAGEMENT L.P.
Notes to Condensed Consolidated Financial Statements
March 31, 1994
(unaudited)
1. BASIS OF PRESENTATION
The unaudited interim condensed consolidated financial statements of
Alliance Capital Management L.P. ("Partnership") included herein have been
prepared in accordance with the instructions to Form 10-Q pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. In the opinion of management, all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of
(a) results of operations for the three months ended March 31, 1994 and
1993, (b) financial position at March 31, 1994, and (c) cash flows for the
three months ended March 31, 1994 and 1993, have been made.
2. RECLASSIFICATIONS
Certain prior period amounts have been reclassified to conform to the
current period presentation.
3. ACQUISITIONS
On March 7, 1994, the Partnership completed the acquisition of the business
and substantially all of the assets of Shields Asset Management,
Incorporated ("Shields") and its wholly-owned subsidiary, Regent Investor
Services Incorporated ("Regent"), from Xerox Financial Services, Inc. for a
purchase price of approximately $70 million in cash. In addition, the
Partnership issued 645,160 new Units to key employees of Shields and Regent
having an aggregate value of approximately $15 million in connection with
the employees entering into long-term employment agreements with the
Partnership. The aggregate value of these Units is being amortized as
employee compensation expense ratably over five years. The acquisition was
accounted for under the purchase method with the results of Shields and
Regent included from the acquisition date. Goodwill of $70.6 million was
recorded which represents the excess of the purchase price, including
acquisition expenses, over the estimated fair value of the net assets of
the acquired business.
On July 22, 1993, Alliance Capital Management L.P. (the "Partnership")
acquired the business and substantially all of the assets of Equitable
Capital Management Corporation ("ECMC"), an indirect wholly-owned
subsidiary of The Equitable Companies Incorporated ("Equitable"). The
acquisition was accounted for in a manner similar to the pooling of
interests method. Accordingly, consolidated financial information for the
three months ended March 31, 1993 has been restated to include the results
of operations of ECMC.
- 6 -
<PAGE>
4. INTANGIBLE ASSETS
Intangible assets, consisting principally of goodwill and client files, are
being amortized on a straight line basis over their estimated useful lives
ranging from twelve to forty years. The Partnership periodically evaluates
the value or recoverability of the carrying amount of its intangible assets
utilizing forecasted undiscounted cash flows.
5. DEFERRED SALES COMMISSIONS
Sales commissions paid to financial intermediaries in connection with the
sale of shares of mutual funds managed by the Partnership ("Alliance mutual
funds") sold without a front-end sales charge are capitalized and amortized
over periods not exceeding five and one half years, which approximate the
periods of time during which the sales commissions are expected to be
recovered from distribution plan payments received from the Alliance mutual
funds and contingent deferred sales charges received from shareholders of
the Alliance mutual funds. Contingent deferred sales charges reduce
unamortized deferred sales commissions when received.
6. DEBT
Debt includes two series of senior notes: Series A aggregating $80,000,000
with principal payments of $20,000,000, $25,000,000, $10,000,000 and
$25,000,000 due on December 30 of each of the years 1994 through 1997,
respectively; and Series B aggregating $25,000,000 payable on September 30,
1996. Interest on the Series A and Series B senior notes is paid semi-
annually at annual rates of 7.0% and 7.35%, respectively. The senior note
agreements contain covenants which require the Partnership, among other
things, to meet certain financial ratios and to maintain minimum tangible
partners' capital.
During February 1994, the Partnership established a $100,000,000 revolving
credit facility with several banks. The revolving credit facility converts
on March 31, 1997 into a term loan repayable in equal installments
quarterly through March 31, 1999. Outstanding borrowings generally bear
interest at the Eurodollar Rate plus .875% per annum through March 31, 1997
(4.31% at March 31, 1994) and at the Eurodollar Rate plus 1.125% per annum
after conversion through March 31, 1999. In addition, a quarterly
commitment fee of .25% per annum is paid on the average daily unused
amount. The outstanding balance under this credit facility was $50,000,000
at March 31, 1994. The revolving credit facility contains covenants which
require the Partnership, among other things, to meet certain financial
ratios.
Debt also includes promissory notes contributed to certain investment
partnerships in the aggregate principal amount $4,110,000 at March 31,
1994. The principal amounts of the notes will be reduced proportionately
as partners receive return of capital distributions from the investment
partnerships.
- 7 -
<PAGE>
7. INCOME TAXES
The Partnership is a publicly traded partnership for Federal income tax
purposes and, accordingly, is not currently subject to Federal and state
income taxes but is subject to the New York City unincorporated business
tax ("UBT"). Current law generally provides that certain publicly traded
partnerships, including the Partnership, will be taxable as a corporation
beginning in 1998.
Domestic corporate subsidiaries of the Partnership, which are subject to
Federal, state and local income taxes, file a consolidated Federal income
tax return and separate state and local income tax returns. Foreign
corporate subsidiaries are generally subject to taxes in the foreign
jurisdictions where they are located.
ECMC is included in the Federal income tax return of Equitable and, prior
to the acquisition, a Federal income tax equivalent provision was computed
on a separate return basis. In addition, ECMC filed separate state and
local income tax returns.
The provision for income taxes is comprised of (in thousands):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1994 1993
------- -------
<S> <C> <C>
Partnership............................. $ 2,732 $ 934
ECMC.................................... -- 540
------- -------
$ 2,732 $ 1,474
------- -------
------- -------
</TABLE>
8. NET INCOME PER UNIT
Net income per Unit is computed by reducing net income by 1% for the 1%
general partnership interest held by the General Partner and dividing the
remaining 99% by the weighted average number of Units, Class A Limited
Partnership Interest and Unit equivalents outstanding during each period.
9. SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for interest and income taxes were as follows (in thousands):
<TABLE>
<CAPTION>
Three Months Ended
------------------
3/31/94 3/31/93
------- -------
<S> <C> <C>
Interest................................. $ 693 $ 538
Income taxes............................. 2,604 1,728
</TABLE>
The 1994 consolidated statement of cash flows does not include the issuance
by the Partnership of new Units to key employees of Shields and Regent
having an aggregate value of approximately $15 million in connection with
their entering into long-term employment agreements since this transaction
did not provide or use cash.
- 8 -
<PAGE>
10. SUBSEQUENT EVENTS
On April 21, 1994, the Board of Directors of the General Partner declared a
distribution of $29,928,000 or $.41 per Unit representing the Available
Cash Flow (as defined in the Partnership Agreement) of the Partnership for
the three months ended March 31, 1994. The distribution was paid on May 9,
1994 to holders of record on May 2, 1994.
On May 6, 1994, the Partnership issued a newly created Class B Limited
Partnership Interest to the Equitable Life Assurance Society of the United
States ("ELAS") for $50 million in cash. The Class B Limited Partnership
Interest will be converted into 2,266,288 newly issued Units upon approval
by the holders of a majority of the outstanding Units.
- 9 -
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Partnership acquired the business and substantially all of the assets of
Equitable Capital Management Corporation ("ECMC") on July 22, 1993. The
acquisition was accounted for in a manner similar to the pooling of interests
method and, accordingly, the condensed consolidated financial statements of the
Partnership and its subsidiaries for the three months ended March 31, 1993 have
been restated to include the results of operations of ECMC. On March 7, 1994,
the Partnership acquired the business and substantially all of the assets of
Shields Asset Management, Incorporated ("Shields") and its wholly-owned
subsidiary, Regent Investor Services, Incorporated ("Regent"), from Xerox
Financial Services, Inc. for a purchase price of approximately $70 million in
cash. The acquisition was accounted for under the purchase method with the
results of Shields and Regent included in the Partnership's condensed
consolidated financial statements from the acquisition date.
THREE MONTHS ENDED MARCH 31, 1994 COMPARED TO THREE MONTHS ENDED
MARCH 31, 1993
The Partnership recorded net income for the three months ended March 31, 1994 of
$31.4 million or $0.42 per Unit, an increase of 89.2% over net income of $16.6
million or $0.23 per Unit for the three months ended March 31, 1993. Net income
for the three months ended March 31, 1993 includes a charge of $7.3 million for
expenses incurred through that date in connection with the acquisition of ECMC
and a $0.9 million deferred income tax benefit resulting from the adoption of
Statement of Financial Accounting Standards No. 109 "Accounting for Income
Taxes" as of January 1, 1993. Excluding these nonrecurring items, net income
for the three months ended March 31, 1994 increased 45.4% over net income of
$21.6 million, or $.30 per Unit, for the prior year period.
Assets under management by the Partnership at March 31, 1994 were approximately
$123.2 billion, an increase of $21.5 billion or 21.2% from March 31, 1993. The
increase is primarily the result of net mutual fund sales of $9.2 billion,
including closed-end fund sales of $3.0 billion, an increase of $7.8 billion in
assets under management from the acquisition of Shields and Regent and market
appreciation of $2.3 billion.
Revenues for the three months ended March 31, 1994 were $148.6 million, an
increase of 32.1% from the prior year period. Investment advisory and services
fees, which are based on assets under management, increased 25.0%. Investment
advisory fees from Alliance mutual funds increased by 36.0% due to higher
average assets under management resulting from strong net mutual fund sales.
Investment advisory fees from other affiliated clients increased by 43.2%
principally due to a $2.4 million increase in performance fees. Investment
advisory fees from institutional clients increased by 9.5% due to an increase in
average assets under management resulting from new account additions, resulting
principally from the acquisition of Shields, and market appreciation during
1993.
- 10 -
<PAGE>
Distribution plan fees increased 54.4% due principally to higher average load
mutual fund assets attributable to Class B and Class C Shares under the
Partnership's mutual fund distribution system described under "Capital Resources
and Liquidity". Shareholder servicing and administration fees increased 31.0%
due primarily to an increase in the number of shareholder accounts serviced by
the Partnership. Other revenues, consisting of commissions, interest and
dividends, increased 73.9% as a result of the launching of a new closed-end
fund, The Global Privatization Fund, for which the Partnership earned
substantial commissions. Alliance Short-Term Multi-Market Trust accounted for
approximately 6% and 12% of the Partnership's aggregate revenues during the
three months ended March 31, 1994 and 1993, respectively.
Expenses for the three months ended March 31, 1994 were $114.4 million, an
increase of 20.1% from the prior year period. Excluding the $7.3 million in
nonrecurring transaction expenses incurred in connection with the ECMC
acquisition in 1993, expenses increased 30.1% from the prior year period.
Employee compensation and benefits increased 20.2% principally due to an
increase in commission expense of $3.6 million resulting from increased mutual
fund sales, including The Global Privatization Fund, and higher incentive
compensation of $3.0 million resulting from increased operating earnings.
General and administrative expenses decreased 2.2% due to the termination of a
management fee paid by ECMC to The Equitable Life Assurance Society of the
United Sates ("ELAS") and the elimination of certain office space formerly
leased by ECMC, both effective with the ECMC acquisition. This decrease was
partially offset by increases in closed-end fund sub-advisory and administration
fees and professional fees. Promotion and fund servicing expense, which
includes distribution plan payments to financial intermediaries for distribution
of the Partnership's mutual fund and cash management services products,
amortization of deferred sales commissions paid to brokers for the sale of Class
B Shares, advertising, promotional materials and travel and entertainment,
increased 63.9%. Distribution plan payments increased 59.8% due principally to
higher average load mutual fund assets attributable to Class B and Class C
Shares. Amortization of deferred sales commissions increased by 50.7% due to
continuing sales of Class B Shares. Other promotional expenditures increased by
91.3% as a result of costs associated with the launching of The Global
Privatization Fund and a new mutual fund advertising campaign.
The provision for income taxes increased by 85.3% principally due to increased
operating income offset by a decrease in the effective income tax rate from
approximately 9% in the prior year to approximately 8% in 1994. The decrease in
the effective income tax rate is primarily due to higher 1993 income tax expense
resulting from ECMC's operations prior to the acquisition at the historical
effective income tax rate of approximately 46%.
CAPITAL RESOURCES AND LIQUIDITY
Cash flow from borrowings under the Partnership's revolving credit facility and
cash flows from operations were the Partnership's principal sources of working
capital during the three month period ended March 31, 1994. The Partnership's
cash and cash equivalents decreased by $19.5 million. The cash outflows from
the purchase of Shields for $70.0 million, capital expenditures of $4.4 million
and cash distributions to Unitholders of $29.9 million, were partially offset by
cash inflows of $50.0 million in net borrowings, $22.9 million in cash flow from
operations and net redemptions of Alliance mutual funds in the amount of $11.5
million.
- 11 -
<PAGE>
The Partnership's mutual fund distribution system (the "System") includes three
distribution options. The System permits the Alliance mutual funds to offer
investors the option of purchasing shares (a) subject to a conventional front-
end sales charge ("Class A Shares"), (b) without a front-end sales charge but
subject to a contingent deferred sales charge payable by shareholders ("CDSC")
and higher distribution fees payable by the funds ("Class B Shares"), or (c)
without either a front-end sales charge or the CDSC but with higher distribution
fees payable by the funds ("Class C Shares"). During the first three months of
1994, payments made to financial intermediaries in connection with the sale of
Class B Shares under the System, net of CDSC received, totaled $34.1 million.
The Partnership financed the acquisition of Shields and Regent in part with a
new $100 million revolving credit facility established during February with a
group of banks, as more fully discussed in Note 6 to the condensed consolidated
financial statements. Outstanding debt at March 31, 1994 under the
Partnership's revolving credit facility and the senior notes was $50 million and
$105 million, respectively.
On May 6, 1994, the Partnership issued a newly created Class B Limited
Partnership Interest to ELAS for $50 million in cash. The Class B Limited
Partnership Interest will be converted into 2,266,288 newly issued Units upon
approval by the holders of a majority of the outstanding Units.
As a result of the substantial growth in the Partnership's business, increased
sales levels of Class B Shares under the System and to take advantage of growth
opportunities and strategic global opportunities, the Partnership will require
additional capital. Various alternatives for increasing the Partnership's
capital base, including the issuance of new Units for cash and the issuance of
additional debt, are being evaluated by management. Management of the
Partnership believes that funds generated from operations, additional debt and
the issuance of new Units will provide the Partnership with a capital base
sufficient to support its future capital and liquidity requirements.
CASH DISTRIBUTIONS
The Partnership is required to distribute all of its Available Cash Flow, as
defined in the Partnership Agreement, to the General Partner and Unitholders.
Available Cash Flow and Available Cash Flow Per Unit amounts do not include
Available Cash Flow resulting from the operations of ECMC prior to the
acquisition. The Partnership's Available Cash Flow was as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1994 1993
------- -------
<S> <C> <C>
Available Cash Flow (in thousands)....... $29,928 $19,555
------- -------
------- -------
Available Cash Flow Per Unit............. $0.41 $0.34
------- -------
------- -------
</TABLE>
- 12 -
<PAGE>
Part II
OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On July 22, 1993 substantially all of the assets of Equitable Capital
Management Corporation ("ECMC") were transferred to the Partnership
and certain of its wholly-owned subsidiaries pursuant to the Amended
and Restated Transfer Agreement dated as of February 23, 1993, as
amended and restated on May 28, 1993 ("Transfer Agreement"), among the
Partnership, ECMC and Equitable Investment Corporation ("EIC"), a
wholly-owned subsidiary of The Equitable Life Assurance Society of the
United States ("Equitable"), in exchange for (i) 11,800,000 newly-
issued Limited Partnership Interests which were immediately exchanged
for 11,800,000 Units, (ii) a newly created Class A Limited Partnership
Interest convertible initially into 100,000 Units, and (iii) the
assumption by the Partnership and certain of its subsidiaries of
certain liabilities of ECMC. The number of Units into which the Class
A Limited Partnership Interest is convertible may increase based on
the receipt of future contingent incentive fee income. The transfer
of such assets and assumption of such liabilities are referred to
herein as the "Transfer".
On or about June 8, 1993 a lawsuit was filed in the United States
District Court of the Southern District of New York by the owner of an
annuity contract issued by Equitable against ECMC, the Partnership,
Equitable and The Hudson River Trust (PAUL D. WEXLER V. EQUITABLE
CAPITAL MANAGEMENT CORPORATION, ET AL.). The Hudson River Trust is
the funding vehicle for the variable annuity insurance and variable
life insurance products offered by Equitable and The Equitable
Variable Life Insurance Company. As of December 31, 1993 the
Partnership managed approximately $7.2 billion in net assets invested
in The Hudson River Trust. The lawsuit purports to be brought
individually and derivatively on behalf of The Hudson River Trust
which is an investment company with multiple portfolios registered
under the Investment Company Act. The complaint alleges that the
transfer to the Partnership of the investment advisory agreement for
The Hudson River Trust imposes an unfair burden on The Hudson River
Trust under Section 15(f) of the Investment Company Act. The
complaint also appears to allege that the fees charged to The Hudson
River Trust under the investment advisory agreement constitute
excessive compensation for advisory services under Section 36(b) of
the Investment Company Act. The complaint seeks a judgment declaring
the Transfer to be null and void and terminating the investment
advisory agreement between the Partnership and The Hudson River Trust.
The complaint also seeks (apparently in the alternative) payment to
The Hudson River Trust of certain amounts paid by the Partnership to
ECMC pursuant to the Transfer Agreement and payment to The Hudson
- 13 -
<PAGE>
River Trust of the value of certain compensation arrangements entered
into between the Partnership and certain employees of ECMC. On April
23, 1993 the shareholders of each of the portfolios constituting The
Hudson River Trust voted to approve the new investment advisory
agreement relating to each of the portfolios between the Partnership
and The Hudson River Trust.
EIC has agreed to bear any legal and other costs of the Partnership
relating to the defense or settlement of the lawsuit. In addition,
since the investment advisory relationship with The Hudson River Trust
was an important factor in the Partnership's decision to enter into
the Transfer Agreement, ECMC, EIC and the Partnership have agreed in
principle that ECMC or EIC will make a cash contribution to the
Partnership in order to reflect lost value to the Partnership
attributable to any loss in revenue resulting from a settlement of the
lawsuit or a final, non-appealable judgment in favor of the plaintiff.
In addition, if such a settlement or final, non-appealable judgment
results in the termination of the Partnership's relationship with The
Hudson River Trust, ECMC and EIC have agreed in principle that such
cash contribution will also reflect any costs incurred by the
Partnership relating to the termination of such relationship. Neither
ECMC nor EIC will receive any Limited Partnership Interest or Units in
return for such cash contribution.
On February 18, 1994 the Court ordered the complaint dismissed.
Plaintiff filed an appeal. On May 3, 1994 the action was settled and
plaintiff withdrew its appeal with prejudice and without the payment
of any money or the incurrence of any liability by the Partnership.
Item 2. CHANGES IN SECURITIES
See Item 5 "Other Information".
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
The Partnership entered into a Revolving Credit and Term Loan
Agreement dated as of February 22, 1994 ("Credit Agreement") with a
group of banks under which the Partnership may borrow up to $100
million. The Partnership will use the proceeds of borrowings under
the Credit Agreement to finance sales of shares of mutual funds
sponsored by the Partnership and to finance acquisitions.
- 14 -
<PAGE>
On May 6, 1994 the Partnership and Equitable entered into a
Contribution Agreement ("Contribution Agreement") pursuant to which
Equitable purchased $50 million of a new Class B Limited Partnership
Interest in the Partnership. The Partnership will use the proceeds to
take advantage of growth opportunities and to finance sales of shares
of mutual funds sponsored by the Partnership.
The Class B Limited Partnership Interest issued under the Contribution
Agreement will be converted into 2,266,288 newly issued Units after
the issuance of the Units upon conversion has been approved by the
holders of a majority of the outstanding Units. Equitable currently
owns approximately 62% of the outstanding Units and will own
approximately 63% of the outstanding Units after conversion of the
Class B Limited Partnership Interest.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
1. Revolving Credit and Term Loan Agreement dated as of
February 22, 1994 among the Partnership, The First National
Bank of Boston and the Banks party thereto.
2. Contribution Agreement dated May 6, 1994 between the
Partnership and The Equitable Life Assurance Society of the
United States.
3. Amendment dated May 6, 1994 to Agreement of Limited
Partnership (as Amended and Restated) of Alliance Capital
Management L.P.
(b) Reports on Form 8-K
None
- 15 -
<PAGE>
SIGNATURE
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.
ALLIANCE CAPITAL MANAGEMENT L.P.
Dated: May 13, 1994 By: Alliance Capital Management
Corporation, its General Partner
By:/s/ Robert H. Joseph, Jr.
------------------------------
Robert H. Joseph, Jr.
Senior Vice President-Finance
and Chief Accounting Officer
- 16 -
<PAGE>
REVOLVING CREDIT
AND
TERM LOAN AGREEMENT
Dated as of February 22, 1994
Among
ALLIANCE CAPITAL MANAGEMENT L.P.,
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent,
And
THE BANKS LISTED ON SCHEDULE 1
1447g
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. - DEFINITIONS AND RULES OF INTERPRETATION 1
1.1. Definitions.............................. 1
1.2. Rules of Interpretation.................. 17
SECTION 2. - THE REVOLVING CREDIT FACILITY............... 18
2.1. Commitment to Lend....................... 18
2.2. Commitment Fee........................... 19
2.3. Reduction of Total Commitment............ 19
2.4. The Notes................................ 19
2.5. Interest on Revolving Credit Loans....... 20
2.6. Requests for Revolving Credit Loans...... 20
2.7. Conversion Options....................... 21
2.8. Funds for Revolving Credit Loans......... 22
2.9. Limit on Number of Eurodollar Rate Loans. 23
SECTION 3. - REPAYMENT OF THE REVOLVING CREDIT LOANS...... 24
3.1. Maturity................................. 24
3.2. Mandatory Repayments of Revolving Credit
Loans.................................. 24
3.3. Optional Repayments of Revolving Credit
Loans.................................. 25
SECTION 4. - THE TERM LOAN............................... 26
4.1. Commitment to Lend....................... 26
4.2. The Notes................................ 26
4.3. Mandatory Payments of Principal of Term
Loan................................... 27
4.4. Optional Repayment of Term Loan.......... 28
4.5. Interest on Term Loan.................... 29
SECTION 5. - CERTAIN GENERAL PROVISIONS.................. 30
5.1. Closing Fee.............................. 30
5.2. Agent's Fee.............................. 30
5.3. Application of Payments.................. 30
5.4. Funds for Payments....................... 30
5.5. Computations............................. 31
5.6. Inability to Determine Eurodollar Rate... 31
5.7. Illegality............................... 32
5.8. Additional Costs, Etc.................... 32
5.9. Capital Adequacy......................... 34
-i-
1447g
<PAGE>
5.10. Certificate.............................. 35
5.11. Indemnity................................ 35
5.12. Interest After Default................... 35
5.13. HLT Classification....................... 36
SECTION 6. - REPRESENTATIONS AND WARRANTIES.............. 36
6.1. Corporate Authority...................... 36
6.2. Governmental Approvals................... 38
6.3. Liens; Leases............................ 38
6.4. Financial Statements and Projections..... 38
6.5. No Material Changes, Etc................. 39
6.6 Permits.................................. 39
6.7. Litigation............................... 40
6.8. Material Contracts....................... 40
6.9. Compliance with Other Instruments, Laws,
Etc.................................... 40
6.10. Tax Status............................... 41
6.11. No Event of Default...................... 41
6.12. Holding Company and Investment Company
Acts................................... 41
6.13. Insurance................................ 41
6.14. Certain Transactions..................... 42
6.15. Employee Benefit Plans................... 42
6.16. Regulations U and X...................... 43
6.17. Environmental Compliance................. 43
6.18. Subsidiaries, Etc........................ 45
6.19. Funded Debt.............................. 45
6.20. General.................................. 45
SECTION 7. - AFFIRMATIVE COVENANTS OF THE BORROWER....... 46
7.1. Punctual Payment......................... 46
7.2. Maintenance of Office.................... 46
7.3. Records and Accounts..................... 46
7.4. Financial Statements, Certificates and
Information............................ 46
7.5. Notices.................................. 49
7.6. Existence; Business; Properties.......... 51
7.7. Insurance................................ 52
7.8. Taxes.................................... 52
7.9. Inspection of Properties and Books, Etc.. 53
7.10. Compliance with Government Mandates,
Contracts, and Permits................. 53
7.11. Use of Proceeds.......................... 54
7.12. Restricted Subsidiaries.................. 54
7.13. Certain Changes in Accounting Principles. 54
-ii-
1447g
<PAGE>
SECTION 8. - CERTAIN NEGATIVE COVENANTS OF THE BORROWER.. 56
8.1. Disposition of Assets.................... 56
8.2. Mergers and Reorganizations.............. 58
8.3. Acquisitions............................. 60
8.4. Restrictions on Liens.................... 61
8.5. Guaranties............................... 63
8.6. Restrictions on Investments.............. 63
8.7. Restrictions on Funded Debt.............. 64
8.8. Distributions............................ 65
8.9. Transactions with Affiliates............. 65
8.10. Fiscal Year.............................. 66
8.11. Compliance with Environmental Laws....... 66
8.12. Employee Benefit Plans................... 66
8.13. Amendments to Certain Documents.......... 67
SECTION 9. - FINANCIAL COVENANTS OF THE BORROWER......... 68
9.1. Operating Coverage Ratio................. 68
9.2. Total Coverage Ratio..................... 69
9.3. Ratio of Funded Debt to Adjusted Cash
Flow................................... 71
9.4. Miscellaneous............................ 71
SECTION 10. - CLOSING CONDITIONS......................... 71
10.1. Financial Statements and Material Changes 72
10.2. Loan Documents........................... 72
10.3. Certified Copies of Charter Documents.... 72
10.4. Partnership and Corporate Action......... 72
10.5. Consents................................. 73
10.6. Opinions of Counsel...................... 73
10.7. Proceedings.............................. 73
10.8. Payment of Fees.......................... 73
10.9. Incumbency Certificate................... 73
SECTION 11. - CONDITIONS TO ALL BORROWINGS............... 73
11.1. No Default............................... 74
11.2. Representations True..................... 74
11.3. Loan Request............................. 74
11.4. Payment of Fees.......................... 74
11.5. No Legal Impediment...................... 74
11.6. Governmental Regulation.................. 74
SECTION 12. - EVENTS OF DEFAULT; ACCELERATION; ETC....... 75
12.1. Events of Default and Acceleration....... 75
12.2. Termination of Commitments............... 78
12.3. Remedies................................. 79
12.4. Application of Monies.................... 79
-iii-
1447g
<PAGE>
SECTION 13. - SETOFF..................................... 80
SECTION 14. - THE AGENT.................................. 81
14.1. Authorization............................ 81
14.2. Employees and Agents..................... 81
14.3. No Liability............................. 81
14.4. No Representations....................... 82
14.5. Payments................................. 82
14.6 Holders of Notes......................... 83
14.7. Indemnity................................ 83
14.8. Agent as Bank............................ 84
14.9. Resignation.............................. 84
14.10 Notification of Defaults and Events of
Default................................ 84
14.11. Duties in the Case of Enforcement........ 84
SECTION 15. - EXPENSES................................... 85
SECTION 16. - INDEMNIFICATION............................ 86
SECTION 17. - SURVIVAL OF COVENANTS, ETC................. 87
SECTION 18. - ASSIGNMENT AND PARTICIPATION............... 88
18.1. Conditions to Assignment by Banks........ 88
18.2. Certain Representations and Warranties;
Limitations; Covenants................. 89
18.3. Register................................. 90
18.4. New Notes................................ 90
18.5. Participations........................... 90
18.6. Disclosure............................... 91
18.7. Assignee or Participant Affiliated with
the Borrower........................... 91
18.8. Miscellaneous Assignment Provisions...... 91
18.9. Assignment by Borrower................... 92
SECTION 19. - NOTICES, ETC............................... 92
SECTION 20. - GOVERNING LAW.............................. 93
SECTION 21. - HEADINGS................................. 93
SECTION 22. - COUNTERPARTS............................... 93
SECTION 23. - ENTIRE AGREEMENT, ETC...................... 94
SECTION 24. - WAIVER OF JURY TRIAL....................... 94
SECTION 25. - CONSENTS, AMENDMENTS, WAIVERS, ETC......... 94
-iv-
1447g
<PAGE>
SECTION 26. - SEVERABILITY............................... 95
SCHEDULE 1 - Banks and Commitments....................... 98
Exhibit A Form of Assumption Agreement
Exhibit B Form of Revolving Credit and Term Note
Exhibit C Form of Loan Request
Exhibit D Form of Confirmation of Loan Request
Exhibit E Form of Conversion Request
Exhibit F Form of Confirmation of Conversion Request
Exhibit G Form of Compliance Certificate
Exhibit H Form of Assignment and Acceptance
Exhibit I Form of Seward & Kissel Opinion
-v-
1447g
<PAGE>
REVOLVING CREDIT AND TERM LOAN AGREEMENT
THIS REVOLVING CREDIT AND TERM LOAN AGREEMENT, dated as of February 22,
1994 (this "CREDIT AGREEMENT"), by and among ALLIANCE CAPITAL MANAGEMENT L.P., a
Delaware limited partnership (together with its permitted successors, the
"BORROWER"), THE FIRST NATIONAL BANK OF BOSTON and the other lending
institutions listed on SCHEDULE 1, and THE FIRST NATIONAL BANK OF BOSTON, as
agent for the Banks (as defined hereinbelow) (in such capacity, the "AGENT");
W I T N E S S E T H:
WHEREAS, the Borrower desires to obtain from the Banks certain credit
facilities as described in this Credit Agreement in order to finance the
Specified Acquisitions and for other purposes as provided below;
WHEREAS, the Banks are willing to provide such credit facilities to the
Borrower upon the terms and conditions set forth in this Credit Agreement; and
WHEREAS, the Agent is willing to act as agent for the Banks in connection
with such credit facilities as provided in this Credit Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and
agreements set forth hereinbelow, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties, the
parties hereto do hereby agree as follows:
Section 1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. DEFINITIONS. The following terms shall have the meanings set forth
in this Section 1.1 or elsewhere in the provisions of this Credit Agreement
referred to below:
ACQUISITION. As defined in Section 8.3.
AFFILIATE. Any Person that would be considered to be an affiliate of the
Borrower under Rule 144(a) under the Securities Act of 1933, as amended.
AGENT. The First National Bank of Boston acting as agent for the Banks.
AGENT'S HEAD OFFICE. The Agent's head office located at 100 Federal
Street, Boston, Massachusetts 02110, or at such other location as the Agent may
designate in a written notice to the other parties hereto from time to time.
<PAGE>
AGENT'S SPECIAL COUNSEL. Bingham, Dana & Gould or such other legal counsel
as may be approved by the Agent.
ALLIANCE DISTRIBUTORS. Alliance Fund Distributors, Inc., a Delaware
corporation.
ALTERNATE BASE RATE. The higher of (a) the annual rate of interest
announced from time to time by FNBB at its head office in Boston, Massachusetts,
as its "base rate" and (b) five tenths of one percent (0.5%) above the Federal
Funds Effective Rate. For the purposes of this definition, "Federal Funds
Effective Rate" shall mean, for any day, the rate per annum 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, as
published for such day (or if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
funds brokers of recognized standing selected by the Agent. Changes in the
Alternate Base Rate shall become effective automatically without notice to any
party.
ALTERNATE BASE RATE APPLICABLE MARGIN. An annual percentage rate
determined as follows: (a) prior to the Revolving Credit Loan Maturity Date,
the Alternate Base Rate Applicable Margin shall be zero percent (0.00%) per
annum, and (b) on and after the Revolving Credit Loan Maturity Date, the
Alternate Base Rate Applicable Margin shall be twenty five one hundredths of one
percent (0.25%) per annum.
ALTERNATE BASE RATE LOANS. Loans bearing interest calculated by reference
to the Alternate Base Rate.
ASSIGNMENT AND ACCEPTANCE. As defined in Section 18.1.
ASSUMPTION AGREEMENT. An Assumption Agreement in the form of EXHIBIT A
with appropriate completions and insertions and with such non-substantive
changes as may be required to reflect the specific nature of the transaction
giving rise to the execution and delivery of such Assumption Agreement.
AXA GROUP. AXA, a SOCIETE ANONYME organized under the laws of France, and
its Subsidiaries.
BALANCE SHEET DATE. December 31, 1993.
-2-
<PAGE>
BANKS. FNBB and the other lending institutions listed on SCHEDULE 1 hereto
and any other Person who becomes an assignee of any rights and obligations of a
Bank pursuant to Section 18.1.
BORROWER. As defined in the preamble hereto.
BORROWER PARTNERSHIP AGREEMENT. The Agreement of Limited Partnership of
the Borrower (As Amended and Restated), dated as of November 19, 1987, among the
General Partner, Karen H. Bechtel, as organizational limited partner, and those
other Persons who became partners of the Borrower as provided therein, as such
agreement has been amended and exists at the date of this Credit Agreement and
may be amended or modified from time to time in compliance with the provisions
of this Credit Agreement.
BUSINESS. With respect to any Person, the assets, properties, business,
operations and condition (financial and otherwise) of such Person.
BUSINESS DAY. Any day on which banking institutions in Boston,
Massachusetts and New York, New York, are open for the transaction of banking
business and, in the case of Eurodollar Rate Loans, also a day which is a
Eurodollar Business Day.
CAPITAL ASSETS. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as Permits, deferred
sales commissions and good will); PROVIDED that Capital Assets shall not include
any item customarily charged directly to expense or depreciated over a useful
life of twelve (12) months or less in accordance with generally accepted
accounting principles.
CAPITAL EXPENDITURES. Amounts paid or indebtedness incurred by the
Borrower or any of its Consolidated Subsidiaries in connection with the purchase
or lease by the Borrower or any of such Subsidiaries of Capital Assets that
would be required to be capitalized and shown on the balance sheet of such
Person in accordance with generally accepted accounting principles.
CAPITALIZED LEASES. Leases under which the Borrower or any of its
Consolidated Subsidiaries is the lessee or obligor, the discounted future rental
payment obligations under which are required to be capitalized on the balance
sheet of the lessee or obligor in accordance with generally accepted accounting
principles.
CERCLA. As defined in Section 6.17.
-3-
<PAGE>
CHANGE OF CONTROL. Each and every (a) issue, sale, or other disposition of
Voting Equity Securities of the Borrower that results in any Person or group of
Persons acting in concert (other than any of (i) The Equitable Companies
Incorporated and its Subsidiaries, and (ii) any member of the AXA Group)
beneficially owning or controlling, directly or indirectly, more than eighty
percent (80%) (by number of votes) of the Voting Equity Securities of the
Borrower, (b) issue, sale, or other disposition of Voting Equity Securities of
the General Partner which results in any Person or group of Persons acting in
concert (other than any of (i) The Equitable Companies Incorporated and its
Subsidiaries, and (ii) any member of the AXA Group) beneficially owning or
controlling, directly or indirectly, more than fifty percent (50%) (by number of
votes) of the Voting Equity Securities of the General Partner, or (c) issue,
sale, or other disposition of Voting Equity Securities of the Borrower if, after
giving effect thereto, the officers of the General Partner will beneficially own
or control, directly or indirectly, less than five percent (5%) of the Voting
Equity Securities of the Borrower (PROVIDED, (I) this clause (c) shall be of no
further force and effect from and after the first to occur of (A) payment in
full of the Indebtedness outstanding under the Note Agreements, and (B) an
amendment or modification of the Note Agreements deleting (without replacement)
clause (iii) of the definition of "Change of Control" set forth in section
2.1(c) of the Note Agreements (in any case under (A) or (B), other than a
payment of such Indebtedness or an amendment or modification in respect of or in
connection with a Change of Control as provided in section 2.1(c) of the Note
Agreements or any successor provision), and (II) in the event clause (iii) of
the definition of "Change of Control" set forth in section 2.1(c) of the Note
Agreements is substantively amended, modified, or replaced, this clause (c)
shall, from and after the date of such amendment, modification, or replacement
(or, in the event the Borrower fails to provide the Agent with copies of any
such amendment, modification, or replacement to the Note Agreements pursuant to
Section 8.13 within fifteen (15) days after the date of the execution and
delivery thereof, the date on which the Borrower provides such copies to the
Agent), be deemed to have been amended so as to reflect, MUTATIS MUTANDIS, the
substance of the amendments or modifications so made to, or the replacement of,
clause (iii) of the definition of "Change of Control" set forth in section
2.1(c) of the Note Agreements).
CHANGE OF CONTROL DATE. Any date upon which a Change of Control occurs.
-4-
<PAGE>
CLOSING DATE. The date, not later than February 28, 1994, on which each of
the conditions set forth in Section 10 and Section 11 is satisfied or waived.
CODE. The Internal Revenue Code of 1986, as amended.
COMMITMENT. With respect to each Bank, the amount set forth on SCHEDULE 1
hereto as the amount of such Bank's commitment to make Loans to the Borrower, as
the same may be reduced from time to time; or if such commitment is terminated
pursuant to the provisions hereof, zero.
COMMITMENT PERCENTAGE. With respect to each Bank, the percentage set forth
on SCHEDULE 1 hereto as such Bank's percentage of the aggregate Commitments of
all of the Banks.
CONSOLIDATED or CONSOLIDATED. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Borrower and the
Consolidated Subsidiaries, consolidated in accordance with generally accepted
accounting principles.
CONSOLIDATED NET INCOME (OR LOSS). The consolidated net income (or loss)
of the Borrower, determined in accordance with generally accepted accounting
principles, but excluding in any event:
(a) to the extent provided by Section 8.8, any portion of the net
earnings of any Restricted Subsidiary that, by virtue of a restriction or Lien
binding on such Restricted Subsidiary under a Contract or Government Mandate, is
unavailable for payment of dividends to the Borrower or any other Restricted
Subsidiary;
(b) earnings resulting from any reappraisal, revaluation, or write-up
of assets; and
(c) any reversal of any contingency reserve, except to the extent
that provision for such contingency reserve shall have been made from income
arising during the period subsequent to December 31, 1993 through the end of the
period for which Consolidated Net Income (or Loss) is then being determined,
taken as one accounting period.
CONSOLIDATED NET WORTH. The excess of Consolidated Total Assets over
Consolidated Total Liabilities, LESS, to the extent otherwise includable in the
computations of Consolidated Net Worth, any subscriptions receivable with
respect to Equity Securities of the Borrower or its Consolidated Subsidiaries
(with such adjustments as may be appropriate so as not to double count
intercompany items).
-5-
<PAGE>
CONSOLIDATED SUBSIDIARIES. At any point in time, the Subsidiaries of the
Borrower that are consolidated with the Borrower for financial reporting
purposes with respect to the fiscal period of the Borrower in which such point
in time occurs.
CONSOLIDATED TOTAL ASSETS. All assets of the Borrower determined on a
consolidated basis in accordance with generally accepted accounting principles.
CONSOLIDATED TOTAL LIABILITIES. All liabilities of the Borrower determined
on a consolidated basis in accordance with generally accepted accounting
principles.
CONTRACTS. Contracts, agreements, mortgages, leases, bonds, promissory
notes, debentures, guaranties, Capitalized Leases, indentures, pledges, powers
of attorney, proxies, trusts, franchises, or other instruments or obligations.
CONVERSION REQUEST. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Loan in accordance with Section 2.7
or Section 4.5.3.
CREDIT AGREEMENT. This Revolving Credit and Term Loan Agreement, including
the Schedules and Exhibits hereto.
DEFAULT. As defined in Section 12.
DISTRIBUTION. With respect to any Entity, the declaration or payment
(without duplication) of any dividend or distribution on or in respect of any
Equity Securities of such Entity, other than dividends payable solely in Equity
Securities of such Entity that are not required to be classified as liabilities
on the balance sheet of such Entity under generally accepted accounting
principles; the purchase, redemption, or other retirement of any Equity
Securities of such Entity, directly or indirectly through a Subsidiary of such
Entity or otherwise; or the return of capital by such Entity to the holders of
its Equity Securities as such.
DOLLARS or $. Dollars in lawful currency of the United States of America.
DOMESTIC LENDING OFFICE. Initially, the office of each Bank designated as
such in SCHEDULE 1 hereto; thereafter, such other office of such Bank, if any,
located within the United States that will be making or maintaining Alternate
Base Rate Loans.
-6-
<PAGE>
DRAWDOWN DATE. The date on which any Revolving Credit Loan or the Term
Loan is made or is to be made, and the date on which any Revolving Credit Loan
is converted or continued in accordance with Section 2.7. or all or any portion
of the Term Loan is converted or continued in accordance with Section 4.5.3.
EBITDA. The Consolidated Net Income (or Loss) for any period, plus
provision for any income taxes, interest (whether paid or accrued, but without
duplication of interest accrued for previous periods), depreciation, or
amortization for such period, in each case to the extent deducted in determining
such Consolidated Net Income (or Loss).
ELIGIBLE ASSIGNEE. Any of (a) a commercial bank or finance company
organized under the laws of the United States, any State thereof, or the
District of Columbia, and having total assets in excess of $1,000,000,000; (b) a
savings and loan association or savings bank organized under the laws of the
United States, any State thereof, or the District of Columbia and having a net
worth of at least $100,000,000, calculated in accordance with generally accepted
accounting principles; (c) a commercial bank organized under the laws of any
other country that is a member of the Organization for Economic Cooperation and
Development (the "OECD"), or a political subdivision of any such country, and
having total assets in excess of $1,000,000,000, PROVIDED that such bank is
acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; and (d) the
central bank of any country which is a member of the OECD.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
Section 3(2) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
ENTITY. Any corporation, partnership, trust, unincorporated association,
joint venture, limited liability company, or other legal or business entity.
ENVIRONMENTAL LAWS. As defined in Section 6.17(a).
EQUITY SECURITIES. With respect to any Entity, all equity securities of
such Entity, including any (a) common or preferred stock, (b) limited or general
partnership interests, (c) options, warrants, or other rights to purchase or
acquire any equity security, or (d) securities convertible into any equity
security.
-7-
<PAGE>
ERISA. The Employee Retirement Income Security Act of 1974, as amended.
ERISA AFFILIATE. Any Person that is treated as a single employer together
with the Borrower under Section 414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
EUROCURRENCY RESERVE RATE. For any day with respect to a Eurodollar Rate
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
EURODOLLAR BUSINESS DAY. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
EURODOLLAR LENDING OFFICE. Initially, the office of each Bank designated
as such in SCHEDULE 1 hereto; thereafter, such other office of such Bank, if
any, that shall be making or maintaining Eurodollar Rate Loans.
EURODOLLAR RATE. For any Interest Period with respect to a Eurodollar Rate
Loan, the rate of interest equal to (a) the rate per annum (rounded upwards to
the nearest 1/16th of one percent) at which FNBB's Eurodollar Lending Office is
offered Dollar deposits at or about 11:00 a.m. on the date two (2) Eurodollar
Business Days prior to the beginning of such Interest Period in the interbank
eurodollar market where the eurodollar and foreign currency and exchange
operations of such Eurodollar Lending Office are customarily conducted, for
delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of the Eurodollar
Rate Loan to which such Interest Period applies, divided by (b) a number equal
to 1.00 minus the Eurocurrency Reserve Rate.
-8-
<PAGE>
EURODOLLAR RATE APPLICABLE MARGIN. An annual percentage rate determined as
follows: (a) prior to the Revolving Credit Loan Maturity Date, the Eurodollar
Rate Applicable Margin shall be 0.875% per annum, and (b) on and after the
Revolving Credit Loan Maturity Date, the Eurodollar Rate Applicable Margin shall
be 1.125% per annum.
EURODOLLAR RATE LOANS. Loans bearing interest calculated by reference to
the Eurodollar Rate.
EVENT OF DEFAULT. As defined in Section 12.
FNBB. The First National Bank of Boston in its individual capacity.
FULLY EFFECTIVE. With respect to any Contract, that (a) such Contract is
the legal, valid, and binding obligation of the Borrower or its Subsidiary, as
the case may be, enforceable against such party according to its terms, and (b)
if such Contract exists on or before the date of this Credit Agreement, such
Contract shall remain in full force and effect notwithstanding the execution and
delivery of the Loan Documents and the consummation of the transactions
contemplated by the Loan Documents.
FUNDED DEBT. With respect to the Borrower or any Consolidated Subsidiary,
(a) all indebtedness for money borrowed of such Person, (b) every obligation of
such Person in respect of Capitalized Leases, (c) all reimbursement obligations
of such Person with respect to letters of credit, bankers' acceptances, or
similar facilities issued for the account of such Person, (d) Indebtedness that
constitutes Funded Debt as provided in Section 8.1(d), and (e) all guarantees,
endorsements, acceptances, and other contingent obligations of such Person,
whether direct or indirect, in respect of indebtedness for borrowed money of
others, including any obligation to supply funds to or in any manner to invest
in, directly or indirectly, the debtor, to purchase indebtedness for borrowed
money, or to assure the owner of indebtedness for borrowed money against loss,
through an agreement to purchase goods, supplies, or services for the purpose of
enabling the debtor to make payment of the indebtedness held by such owner or
otherwise, PROVIDED, HOWEVER, that each guaranty of Indebtedness of, keepwell
obligation for, or obligation to make funds available for, any Consolidated
Subsidiary that acts as general partner of one or more partnerships sponsored or
established by the Borrower or any of its Subsidiaries shall constitute Funded
Debt from and after such time as such guaranty, keepwell, or other obligation is
no longer contingent, whereupon such guaranty, keepwell, or other
-9-
<PAGE>
obligation will constitute Funded Debt in an amount equal to the liability of
such Person in respect of such guaranty, keepwell, or other obligation to the
extent such guaranty, keepwell or other obligation is non-contingent.
GENERAL PARTNER. Alliance Capital Management Corporation, a Delaware
corporation, in its capacity as general partner of the Borrower and its
successors.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Subject to Section 7.13, (a)
when used in Section 9, whether directly or indirectly through reference to a
capitalized term used therein, means (i) principles that are consistent with the
principles promulgated or adopted by the Financial Accounting Standards Board
and its predecessors, in effect for the fiscal year ended on the Balance Sheet
Date, and (ii) to the extent consistent with such principles, the accounting
practices of the Borrower reflected in its consolidated financial statements for
the year ended on the Balance Sheet Date, and (b) when used in general, other
than as provided above, means principles that are (i) consistent with the
principles promulgated or adopted by the Financial Accounting Standards Board
and its predecessors, as in effect from time to time and (ii) consistently
applied with past financial statements of the Borrower adopting the same
principles, PROVIDED that in each case referred to in this definition of
"generally accepted accounting principles" a certified public accountant would,
insofar as the use of such accounting principles is pertinent, be in a position
to deliver an unqualified opinion (other than a qualification regarding changes
in generally accepted accounting principles) as to financial statements in which
such principles have been properly applied.
GOVERNMENT AUTHORITY. The United States of America or any state, district,
territory, or possession thereof, any local government within the United States
of America or any of its territories and possessions, any foreign government
having appropriate jurisdiction or any province, territory, or possession
thereof, or any court, tribunal, administrative or regulatory agency, taxing or
revenue authority, central bank or banking regulatory agency, commission, or
body of any of the foregoing.
GOVERNMENT MANDATE. With respect to (a) any Person, any statute, law,
rule, regulation, code, or ordinance duly adopted by any Government Authority,
any treaty or compact between two (2) or more Government Authorities, and any
judgment, order, decree, ruling, finding, determination, or injunction of any
Government Authority, in each such case that is, pursuant to appropriate
jurisdiction, legally
-10-
<PAGE>
binding on such Person, any of its Subsidiaries or any of their respective
properties, and (b) the Agent or any Bank, in addition to (a), any policy,
guideline, directive, or standard duly adopted by any Government Authority with
respect to the regulation of banks, monetary policy, lending, investments, or
other financial matters .
GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
HAZARDOUS SUBSTANCES. As defined in Section 6.17(b).
INDEBTEDNESS. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should be
made by footnotes thereto in accordance with generally accepted accounting
principles, including: (a) all debt and similar monetary obligations, whether
direct or indirect; (b) all liabilities secured by any Lien existing on property
owned or acquired subject thereto, whether or not the liability secured thereby
shall have been assumed; (c) all obligations in respect of hedging contracts,
including interest rate and currency swaps, caps, and collars; and (d) all
guarantees, endorsements, and other contingent obligations whether direct or
indirect in respect of indebtedness of others, including any obligation to
supply funds to or in any manner to invest in, directly or indirectly, the
debtor, to purchase indebtedness, or to assure the owner of indebtedness against
loss, through an agreement to purchase goods, supplies, or services for the
purpose of enabling the debtor to make payment of the indebtedness held by such
owner or otherwise, and the obligations to reimburse the issuer in respect of
any letters of credit.
INTEREST PAYMENT DATE. (a) As to any Alternate Base Rate Loan, the last
day of each calendar quarter during all or a portion of which such Alternate
Base Rate Loan is outstanding and the maturity of such Alternate Base Rate Loan;
and (b) as to any Eurodollar Rate Loan, the last day of each Interest Period
with respect to such Eurodollar Rate Loan, the maturity of such Eurodollar Rate
Loan, and, if the Interest Period of such Eurodollar Rate Loan is longer than
three (3) months, the date that is three (3) months from the first day of such
Interest Period.
-11-
<PAGE>
INTEREST PERIOD. With respect to each Eurodollar Rate Loan, (a) initially,
the period commencing on the Drawdown Date of such Loan and ending on the last
day of, as selected by the Borrower in a Loan Request, one (1), three (3), or
six (6) months; and (b) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Loan and ending on the
last day of one of the periods set forth above, as selected by the Borrower in a
Conversion Request; PROVIDED that all of the foregoing provisions relating to
Interest Periods are subject to the following:
(A) if any Interest Period would otherwise end on a day that is not a
Eurodollar Business Day, that Interest Period shall be extended to the next
succeeding Eurodollar Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Eurodollar Business Day;
(B) any Interest Period that begins on the last Eurodollar 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 end on the last Eurodollar Business Day of a calendar month;
(C) any Interest Period commencing prior to the Revolving Credit Loan
Maturity Date that would otherwise extend beyond the Revolving Credit Loan
Maturity Date shall end on the Revolving Credit Loan Maturity Date;
(D) any Interest Period commencing on or after the Revolving Credit
Loan Maturity Date that would otherwise extend beyond the Term Loan Maturity
Date shall end on the Term Loan Maturity Date; and
(E) the Borrower may not select any Interest Period that would extend
beyond the date on which a regularly scheduled installment payment of the
principal of the Term Loan is to be made unless a portion of the Term Loan in
principal amount at least equal to such installment payment either bears
interest at the Alternate Base Rate or has an Interest Period ending on or prior
to such date.
INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of Equity Securities or Funded
Debt of, or for loans, advances, or capital contributions, or in respect of any
guaranties (or other commitments as described under Indebtedness) of, any
Person. In determining the aggregate amount of Investments outstanding at any
particular time: (a) the
-12-
<PAGE>
amount of any Investment represented by a guaranty shall be taken at not less
than the principal amount of the obligations guaranteed and still outstanding
and the amount of Indebtedness represented by a keepwell obligation shall be
taken at not less than the maximum amount of the keepwell obligation, as the
case may be; (b) there shall be deducted in respect of each such Investment any
amount received as a return of capital; (c) there shall not be deducted in
respect of any Investment any amounts received as earnings on such Investment,
whether as dividends, interest, or otherwise; and (d) there shall not be added
to or deducted from the aggregate amount of Investments any increase or decrease
in the value thereof. For purposes of determining the amount of Investments by
the Borrower and the Consolidated Subsidiaries outstanding at any time,
investments (defined as aforesaid) by an Unrestricted Subsidiary in an Entity
that is not a Subsidiary of the Borrower shall not be counted as Investments
hereunder to the extent that they do not exceed the aggregate amount of
Investments by the Borrower and the Consolidated Subsidiaries in such
Unrestricted Subsidiary.
LIEN. Any lien, mortgage, security interest, pledge, charge, beneficial or
equitable interest or right, hypothecation, collateral assignment, easement, or
other encumbrance.
LOAN DOCUMENTS. This Credit Agreement, the Notes, and any Assumption
Agreements.
LOAN MATURITY DATE. The Revolving Credit Loan Maturity Date or the Term
Loan Maturity Date, as the case may be.
LOAN REQUEST. As defined in Section 2.6.
LOANS. The Revolving Credit Loans and the Term Loan.
MAJORITY BANKS. As of any date, the Banks holding at least sixty-six and
two thirds percent (66 2/3%) of the outstanding principal amount of the Notes on
such date; and if no such principal is outstanding, the Banks whose aggregate
Commitments constitute at least sixty-six and two thirds percent (66 2/3%) of
the Total Commitment.
MATERIAL EFFECT. A material adverse effect on (a) the ability of the
Borrower or any Other Obligor to enter into and to perform and observe its
obligations under the Loan Documents, or (b) the Business of the Borrower and
its Consolidated Subsidiaries taken as a whole.
-13-
<PAGE>
MATERIAL SUBSIDIARY. Any Subsidiary of the Borrower, any Other Obligor, or
Alliance Distributors that, singly or together with any other such Subsidiaries
then subject to one or more of the conditions described in Section 12.1(h),
Section 12.1(i), or Section 12.1(m), either (a) at the date of determination
owns Significant Assets, or (b) has total assets as of the date of determination
equal to not less than five percent (5%) of the Consolidated Total Assets of the
Borrower as set forth in the consolidated balance sheet of the Borrower included
in the most recent available annual or quarterly report of the Borrower.
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of Section
3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
1940 ACT. The Investment Company Act of 1940, as amended.
NOTE AGREEMENTS. The several Note Agreements dated as of January 15, 1992
between the Borrower and the respective Purchasers named therein.
NOTES. The Revolving Credit and Term Notes.
OBLIGATIONS. All indebtedness, obligations, and liabilities of any of the
Borrower and its Subsidiaries to any of the Banks and the Agent, individually or
collectively, existing on the date of this Credit Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
or incurred under this Credit Agreement or any of the other Loan Documents or in
respect of any of the Loans or any of the Notes or other instruments at any time
evidencing any thereof.
OTHER OBLIGOR. As defined in the Assumption Agreements.
OUTSTANDING. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002 of
ERISA and any successor entity or entities having similar responsibilities.
PERMITS. Permits, licenses, franchises, patents, copyrights, trademarks,
trade names, approvals, clearances, and applications for or rights in respect of
the foregoing of any Government Authority.
-14-
<PAGE>
PERMITTED ACQUISITIONS. Acquisitions permitted under clauses (a) through
(f) of Section 8.3.
PERMITTED LIENS. Liens permitted by Section 8.4.
PERSON. Any individual, Entity, or Government Authority.
PROCEEDINGS. Any (a) actions at law, (b) suits in equity, (c) bankruptcy,
insolvency, receivership, dissolution, or reorganization cases or proceedings,
(d) administrative or regulatory hearings or other proceedings, (e) arbitration
and mediation proceedings, (f) criminal prosecutions, (g) judgment levies,
foreclosure proceedings, pre-judgment security procedures, or other enforcement
actions, and (h) other litigation, actions, suits, and proceedings conducted by,
before, or on behalf of any Government Authority.
READILY MARKETABLE SECURITIES. Equity Securities or Indebtedness for which
an established public or private trading market exists, such that they may
reasonably be expected to be liquidated within five (5) Business Days.
REAL ESTATE. All real property at any time owned or leased (as lessee or
sublessee) by the Borrower or any of its Subsidiaries.
RECORD. The grid attached to a Note, or the continuation of such grid, or
any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.
REORGANIZATION and REORGANIZE. As defined in Section 8.2.
RESTRICTED SUBSIDIARY. Each (a) Subsidiary of the Borrower designated as a
"Restricted Subsidiary" on SCHEDULE 6.18 (and by such designation the Borrower
represents and warrants to the Agent and the Banks that such Subsidiary meets
the qualifications of a Restricted Subsidiary as specified in this definition),
and (b) other Subsidiary of the Borrower that the principal financial or
accounting officer of the Borrower may after the date of this Credit Agreement
certify to the Agent and the Banks meets the qualifications of a Restricted
Subsidiary as specified in this definition (and at the time of any such
certification the Borrower shall provide the Agent and the Banks with a current
list of all Restricted Subsidiaries). The qualifications of a Restricted
Subsidiary are as follows: (a) all of the issued and outstanding Equity
Securities of a Restricted Subsidiary (other than directors' qualifying
-15-
<PAGE>
shares or shares not exceeding ten percent (10%) in the aggregate of the issued
and outstanding Equity Securities of a Restricted Subsidiary owned by Persons
other than the Borrower or another Restricted Subsidiary pursuant to other
applicable legal requirements) shall be owned of record and beneficially by the
Borrower or another Restricted Subsidiary free of Liens other than Permitted
Liens, and (b) no Restricted Subsidiary shall be a general partner of any
partnership, be a party to any joint venture in respect of which liability is
not limited to the amount of such Restricted Subsidiary's capital contribution
or other equity investment, or have any contingent obligations established by
Contract in respect of Funded Debt that are not by their terms limited to a
specific dollar amount.
REVOLVING CREDIT LOAN MATURITY DATE. March 31, 1997.
REVOLVING CREDIT LOANS. Revolving credit loans made or to be made by the
Banks to the Borrower pursuant to Section 2.
SIGNIFICANT ASSETS. At the date of any sale, transfer, assignment, or
other disposition of assets of the Borrower or any of its Subsidiaries (or as of
the date of any Default or Event of Default), either of the following: (a)
assets of the Borrower or any of its Subsidiaries (including Equity Securities
of Subsidiaries of the Borrower) which generated more than ten percent (10%) of
the consolidated revenues of the Borrower during the fiscal year of the Borrower
most recently ended, and (b) assets of the Borrower or any of its Subsidiaries
(including Equity Securities of Subsidiaries of the Borrower) which generated
revenues for the four (4) fiscal quarters of the Borrower most recently ended
that if subtracted from the consolidated revenues of the Borrower for such
period would result in consolidated revenues of the Borrower for such period of
less than $315,000,000. For purposes of both clauses (a) and (b), 12b-1 Fees
shall not be included in the consolidated revenues of the Borrower.
SPECIFIED ACQUISITIONS. The acquisition by the Borrower of the business
and operating assets of Shields Asset Management, Incorporated ("SHIELDS") and
of Regent Investor Services Incorporated ("REGENT") pursuant to the Asset
Purchase Agreement dated as of November 16, 1993 among the Borrower, Shields,
Regent, Furman Selz Holding Corporation and Xerox Financial Services, Inc.
SUBSIDIARY. Any Entity of which the designated parent shall at any time
own directly or indirectly through a Subsidiary or Subsidiaries at least a
majority (by number of votes) of the outstanding Voting Equity Securities.
-16-
<PAGE>
TERM LOAN. The term loan made or to be made by the Banks to the Borrower
on the Revolving Credit Loan Maturity Date pursuant to Section 4.1.
TERM LOAN MATURITY DATE. March 31, 1999.
TOTAL COMMITMENT. The sum of the Commitments of the Banks, as in effect
from time to time. As of the Closing Date the Total Commitment is $100,000,000.
12B-1 FEES. All or any portion of (a) the compensation or fees paid,
payable, or expected to be payable to the Borrower or any of its Subsidiaries
for acting as the distributor of securities as permitted under Rule 12b-1 under
the 1940 Act, (b) the contingent deferred sales charges or redemption fees paid,
payable, or expected to be paid to the Borrower or any of its Subsidiaries, and
(c) any right, title, or interest in or to any such compensation or fees.
TYPE. As to any Loan, its nature as an Alternate Base Rate Loan or a
Eurodollar Rate Loan.
UNITS. Units representing assignments of beneficial ownership of limited
partnership interests in the Borrower.
UNRESTRICTED SUBSIDIARY. A Consolidated Subsidiary that is not a
Restricted Subsidiary.
VOTING EQUITY SECURITIES. Equity Securities of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the Entity that issued such Equity Securities.
1.2. RULES OF INTERPRETATION.
(a) A reference to any Contract or other document shall include such
Contract or other document as amended, modified, or supplemented from time to
time in accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any Government Mandate includes any amendment or
modification to such Government Mandate or any successor Government Mandate.
-17-
<PAGE>
(d) A reference to any Person includes its permitted successors and
permitted assigns. Without limiting the generality of the foregoing, a
reference to any Bank shall include any Person that succeeds generally to its
assets and liabilities.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles.
(f) The words "include", "includes", and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in The Commonwealth of Massachusetts, have the
meanings assigned to them therein.
(h) Reference to a particular "Section ", Schedule, or Exhibit refers
to that section, Schedule, or Exhibit of this Credit Agreement unless otherwise
indicated.
(i) The words "herein", "hereof", and "hereunder" and words of like
import shall refer to this Credit Agreement as a whole and not to any particular
section or subdivision of this Credit Agreement.
2. THE REVOLVING CREDIT FACILITY.
2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth in
this Credit Agreement, each of the Banks severally shall lend to the Borrower,
and the Borrower may borrow, repay, and reborrow from time to time between the
Closing Date and the Revolving Credit Loan Maturity Date upon notice by the
Borrower to the Agent given in accordance with Section 2.6, such sums as are
requested by the Borrower up to a maximum aggregate principal amount outstanding
(after giving effect to all amounts requested) at any one time equal to such
Bank's Commitment, PROVIDED that the sum of the outstanding amount of the
Revolving Credit Loans (after giving effect to all amounts requested) shall not
at any time exceed the Total Commitment. The Revolving Credit Loans shall be
made PRO RATA in accordance with each Bank's Commitment Percentage; PROVIDED
that the failure of any Bank to lend in accordance with this Credit Agreement
shall not release any other Bank or the Agent from their obligations hereunder,
nor shall any Bank have any responsibility or liability in respect of a failure
of any other Bank to lend in accordance with this Credit Agreement. Each
request for
-18-
<PAGE>
a Revolving Credit Loan hereunder shall constitute a representation and warranty
by the Borrower that the conditions set forth in Section 10 and Section 11, in
the case of the initial Revolving Credit Loans to be made on the Closing Date,
and Section 11, in the case of all other Revolving Credit Loans, have been
satisfied on the date of such request.
2.2. COMMITMENT FEE. The Borrower shall pay to the Agent for the accounts
of the Banks in accordance with their respective Commitment Percentages a
commitment fee calculated at the rate of twenty five one hundredths of one
percent (0.25%) per annum on the average daily amount during each calendar
quarter or portion thereof from the Closing Date to the Revolving Credit Loan
Maturity Date by which the Total Commitment exceeds the outstanding amount of
Revolving Credit Loans during such calendar quarter. The commitment fee shall
be payable quarterly in arrears on the first day of each calendar quarter for
the immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Revolving Credit Maturity
Date or any earlier date on which the Commitments shall terminate. In no case
shall any portion of the commitment fee be refundable.
2.3. REDUCTION OF TOTAL COMMITMENT. The Borrower shall have the right at
any time and from time to time upon three (3) Business Days' prior written
notice to the Agent to reduce by at least $1,000,000 or integral multiples of
$100,000 in excess thereof, or to terminate entirely, the unborrowed portion of
the Total Commitment, whereupon the Commitments of the Banks shall be reduced
PRO RATA in accordance with their respective Commitment Percentages of the
amount specified in such notice or, as the case may be, terminated. Promptly
after receiving any notice of the Borrower delivered pursuant to this Section
2.3, the Agent will notify the Banks of the substance thereof. Upon the
effective date of any such reduction or termination, the Borrower shall pay to
the Agent for the respective accounts of the Banks the full amount of any
commitment fee then accrued on the amount of the reduction. No reduction or
termination of the Commitments may be reinstated.
2.4. THE NOTES. The Revolving Credit Loans shall be evidenced by separate
promissory notes of the Borrower in substantially the form of EXHIBIT B hereto
(each a "NOTE"), dated as of the Closing Date and completed with appropriate
insertions. One Note shall be payable to the order of each Bank in a principal
amount equal to such Bank's Commitment or, if less, the outstanding amount of
all Revolving Credit Loans made by such Bank, plus interest accrued thereon, as
set forth below (the Notes shall also evidence the Term
-19-
<PAGE>
Loans as provided in Section 4). The Borrower irrevocably authorizes each Bank
to make or cause to be made, at or about the time of the Drawdown Date of any
Revolving Credit Loan or at the time of receipt of any payment of principal on
such Bank's Note, an appropriate notation on such Bank's Record reflecting the
making of such Revolving Credit Loan or (as the case may be) the receipt of such
payment. The outstanding amount of the Revolving Credit Loans set forth on such
Bank's Record shall be PRIMA FACIE evidence of the principal amount thereof
owing and unpaid to such Bank, but the failure to record, or any error in so
recording, any such amount on such Bank's Record shall not limit or otherwise
affect the obligations of the Borrower hereunder or under any Note to make
payments of principal of or interest on any Note when due.
2.5. INTEREST ON REVOLVING CREDIT LOANS.
2.5.1. INTEREST RATES. Except as otherwise provided in Section 5.12,
Revolving Credit Loans shall bear interest as follows:
(a) Each Alternate Base Rate Loan shall bear interest at an annual
rate equal to the sum of the Alternate Base Rate PLUS the Alternate Base Rate
Applicable Margin, both as in effect from time to time while such Alternate Base
Rate Loan is outstanding.
(b) Each Eurodollar Rate Loan shall bear interest for each Interest
Period at an annual rate equal to the sum of the Eurodollar Rate for such
Interest Period PLUS the Eurodollar Rate Applicable Margin in effect from time
to time during such Interest Period.
2.5.2. INTEREST PAYMENT DATES. The Borrower shall pay all accrued
interest on each Revolving Credit Loan in arrears on each Interest Payment Date
with respect thereto.
2.6. REQUESTS FOR REVOLVING CREDIT LOANS. The Borrower shall give to the
Agent written notice in the form of EXHIBIT C hereto (or telephonic notice
confirmed in a writing in the form of EXHIBIT D hereto) of each Revolving Credit
Loan requested hereunder (a "LOAN REQUEST") no less than (a) one (1) Business
Day prior to the proposed Drawdown Date of any Alternate Base Rate Loan and (b)
three (3) Eurodollar Business Days prior to the proposed Drawdown Date of any
Eurodollar Rate Loan. Each such notice shall specify (i) the principal amount
of the Revolving Credit Loan requested, (ii) the proposed Drawdown Date of such
Revolving Credit Loan, (iii) the Type of such Revolving Credit Loan,
-20-
<PAGE>
and (iv) the Interest Period for such Loan if such Loan is a Eurodollar Rate
Loan. Promptly upon receipt of any such Loan Request, the Agent shall notify
each of the Banks thereof. Each Loan Request shall be irrevocable and binding
on the Borrower and shall obligate the Borrower to accept the Revolving Credit
Loan requested from the Banks on the proposed Drawdown Date. Each Loan Request
shall be in a minimum aggregate amount of $1,000,000 or in an integral multiple
of $100,000 in excess thereof.
2.7. CONVERSION OPTIONS.
2.7.1. CONVERSION TO EURODOLLAR RATE LOAN. The Borrower may elect
from time to time, subject to Section 2.9, to convert any outstanding Alternate
Base Rate Loan to a Eurodollar Rate Loan, PROVIDED that (a) the Borrower shall
give the Agent at least three (3) Eurodollar Business Days' prior written notice
of such election; and (b) no Alternate Base Rate Loan may be converted into a
Eurodollar Rate Loan when any Default or Event of Default has occurred and is
continuing. The Agent shall notify the Banks promptly of any such notice. On
the date on which such conversion is being made, each Bank shall take such
action as is necessary to transfer its Commitment Percentage of such Loans to
its Eurodollar Lending Office. All or any part of outstanding Alternate Base
Rate Loans may be converted into a Eurodollar Rate Loan as provided herein,
PROVIDED that any partial conversion shall be in an aggregate principal amount
of $1,000,000 or an integral multiple of $100,000 in excess thereof.
2.7.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN.
(a) All Alternate Base Rate Loans shall continue as Alternate Base
Rate Loans until converted into Eurodollar Rate Loans as provided in Section
2.7.1.
(b) Any Eurodollar Rate Loan may, subject to Section 2.9, be
continued, in whole or in part, as a Eurodollar Rate Loan upon the expiration of
the Interest Period with respect thereto, PROVIDED that (i) the Borrower shall
give the Agent at least three (3) Eurodollar Business Days' prior written notice
of such election; (ii) no Eurodollar Rate Loan may be continued as such when any
Default or Event of Default has occurred and is continuing, but shall be
automatically converted to an Alternate Base Rate Loan on the last day of the
first Interest Period relating thereto ending during the continuance of any
Default or Event of Default; and (iii) any partial continuation of a Eurodollar
-21-
<PAGE>
Rate Loan shall be in an aggregate principal amount of $1,000,000 or an integral
multiple of $100,000 in excess thereof.
(c) If the Borrower shall fail to give any notice of continuation of
a Eurodollar Rate Loan as provided under this Section 2.7.2, the Borrower shall
be deemed to have requested a conversion of the affected Eurodollar Rate Loan to
an Alternate Base Rate Loan on the last day of the then current Interest Period
with respect thereto.
(d) The Agent shall notify the Banks promptly when any such
continuation or conversion contemplated by this Section 2.7.2 is scheduled to
occur. On the date on which any such continuation or conversion is to occur,
each Bank shall take such action as is necessary to transfer its Commitment
Percentage of such Loans to its Domestic Lending Office or its Eurodollar
Lending Office as appropriate.
2.7.3. EURODOLLAR RATE LOANS. Any conversion to or from Eurodollar
Rate Loans shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of all
Eurodollar Rate Loans having the same Interest Period shall not be less than
$1,000,000 or an integral multiple of $100,000 in excess thereof.
2.7.4. CONVERSION REQUESTS. All notices of the conversion or
continuation of a Loan provided for in this Section 2.7 shall be in writing in
the form of EXHIBIT E hereto (or shall be given by telephone and confirmed by a
writing in the form of EXHIBIT F hereto). Each such notice shall specify (a)
the principal amount and Type of the Loan subject thereto, (b) the date on which
the current Interest Period of such Loan ends if such Loan is a Eurodollar Rate
Loan, and (c) the new Interest Period for such Loan if such Loan is a Eurodollar
Rate Loan. Promptly upon receipt of any such notice, the Agent shall notify
each of the Banks thereof. Each such notice shall be irrevocable and binding on
the Borrower.
2.8. FUNDS FOR REVOLVING CREDIT LOANS.
2.8.1. FUNDING PROCEDURES. Not later than 11 o'clock a.m. (Boston
time) on the proposed Drawdown Date of any Revolving Credit Loans, each of the
Banks will make available to the Agent, at its Head Office, in immediately
available funds, the amount of such Bank's Commitment Percentage of the amount
of the requested Revolving Credit Loans. Upon receipt from each Bank of such
amount, and upon receipt of the documents required by Sections 10 and 11 and
the
-22-
<PAGE>
satisfaction of the other conditions set forth therein, to the extent
applicable, the Agent will make available to the Borrower the aggregate amount
of such Revolving Credit Loans made available to the Agent by the Banks. The
failure or refusal of any Bank to make available to the Agent at the aforesaid
time and place on any Drawdown Date the amount of its Commitment Percentage of
the requested Revolving Credit Loans shall not relieve any other Bank from its
several obligation hereunder to make available to the Agent the amount of such
other Bank's Commitment Percentage of any requested Revolving Credit Loans, but
no other Bank shall be liable in respect of the failure of such Bank to make
available such amount.
2.8.2. ADVANCES BY AGENT. The Agent may, unless notified to the
contrary by any Bank prior to a Drawdown Date, assume that such Bank has made
available to the Agent on such Drawdown Date the amount of such Bank's
Commitment Percentage of the Revolving Credit Loans to be made on such Drawdown
Date, and the Agent may (but it shall not be required to), in reliance upon such
assumption, make available to the Borrower a corresponding amount. If any Bank
makes available to the Agent such amount on a date after such Drawdown Date,
such Bank shall pay to the Agent on demand an amount equal to the product of (a)
the average computed for the period referred to in clause (c) below, of the
weighted average interest rate paid by the Agent for federal funds acquired by
the Agent during each day included in such period, TIMES (b) the amount of such
Bank's Commitment Percentage of such Revolving Credit Loans, TIMES (c) a
fraction, the numerator of which is the number of days that elapse from and
including such Drawdown Date to the date on which the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans shall become immediately
available to the Agent, and the denominator of which is 360. A statement of the
Agent submitted to such Bank with respect to any amounts owing under this
paragraph shall be PRIMA FACIE evidence of the amount due and owing to the Agent
by such Bank. If the amount of such Bank's Commitment Percentage of such
Revolving Credit Loans is not made available to the Agent by such Bank within
three (3) Business Days following such Drawdown Date, the Agent shall be
entitled to recover such amount from the Borrower within one (1) Business Day
after demand therefor, with interest thereon at the rate per annum applicable to
the Revolving Credit Loans made on such Drawdown Date.
2.9. LIMIT ON NUMBER OF EURODOLLAR RATE LOANS. At no time shall there be
outstanding Eurodollar Rate Loans having more than ten (10) different Interest
Periods.
-23-
<PAGE>
Section 3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
3.1. MATURITY. The Borrower shall pay on the Revolving Credit Loan
Maturity Date, and there shall become absolutely due and payable on the
Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon. Subject to the terms and conditions set forth in this Credit
Agreement, the proceeds of the Term Loan will be applied to repay in full the
principal of the Revolving Credit Loans outstanding at the Revolving Credit Loan
Maturity Date, as provided in Section 4.1.
3.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS.
3.2.1. LOANS IN EXCESS OF COMMITMENT. If at any time the sum of the
outstanding amount of the Revolving Credit Loans exceeds the Total Commitment,
then the Borrower shall immediately pay the amount of such excess to the Agent
for application to the Revolving Credit Loans.
3.2.2. CHANGE OF CONTROL. Upon the occurrence of a Change of Control
or impending Change of Control:
(a) the Borrower shall notify the Agent and each Bank of such Change
of Control or impending Change of Control as provided in Section 7.5.4;
(b) the Commitments (but not the right of the Borrower to convert and
continue Types of Revolving Credit Loans under Section 2.7) shall be suspended
for the period from the date of such notice (or any Change of Control Notice
given by the Agent or a Bank as provided in Section 7.5.4) through the first to
occur of (i) the date of any prepayment of any Indebtedness under the Note
Agreements pursuant to section 2.1(c) thereof, and (ii) the later of (A) the
Change of Control Date and (B) the date forty (40) days after the date of such
notice from the Borrower (the "SUSPENSION PERIOD") and the Banks shall have no
obligations to make Loans to the Borrower;
(c) each Bank shall have the right within fifteen (15) days after the
date of such Bank's receipt of a Change of Control Notice under clause (a) above
to demand payment in full of its pro rata share of the outstanding principal of
all Revolving Credit Loans, all accrued and unpaid interest thereon, and any
other amounts owing under the Loan Documents;
-24-
<PAGE>
(d) in the event that any Bank shall have made a demand under clause
(c) above or any demand for payment shall have been made under the second
paragraph of section 2.1(c) of any of the Note Agreements, the Borrower shall
promptly, but in no event later than five (5) Business Days after such demand,
deliver notice to each Bank (which notice shall identify the Bank or Holder (as
defined in the Note Agreements) making such demand) and, notwithstanding the
provisions of clause (c) above, the right of each Bank to demand repayment shall
remain in effect through the fifteenth (15th) day next succeeding receipt by
such Bank of any notice required to be given pursuant to this clause (d),
PROVIDED that the provisions of this clause (d) shall only apply with respect to
demands given by Banks prior to the expiration of the period specified in clause
(c) and demands under the Note Agreements given prior to the expiration of the
period specified in the second paragraph of section 2.1(c) of the Note
Agreements; and
(e) in the event any Bank makes a demand under clause (c) or clause
(d) above, the Borrower shall on the last day of the Suspension Period pay to
the Agent for the credit of such Bank its pro rata share of the outstanding
principal of all Revolving Credit Loans, all accrued and unpaid interest
thereon, and any other amounts owing under the Loan Documents, (provided that
(i) any Bank may require the Borrower to postpone prepayment of a Eurodollar
Rate Loan until the last day of the Interest Period with respect to such
Eurodollar Rate Loan, and (ii) if any Bank elects to require prepayment of a
Eurodollar Rate Loan that has an Interest Period ending less than sixty (60)
days after the date of such demand on a date that is not the last day of the
Interest Period for such Eurodollar Rate Loan, such Bank shall not be entitled
to receive any amounts payable under Section 5.11 in respect of the prepayment
of such Eurodollar Rate Loan).
Upon any demand for payment by any Bank under this Section 3.2.2, the Commitment
hereunder provided by such Bank shall terminate, and such Bank shall be relieved
of all further obligations to make Loans to the Borrower. At the end of the
Suspension Period referred to above, the Commitments shall be restored from all
Banks that have not made a demand for payment under this Section 3.2.2, and this
Credit Agreement and the other Loan Documents shall remain in full force and
effect among the Borrower, such Banks, and the Agent, with such changes as may
be necessary to reflect the termination of the credit provided by the Banks that
made a demand for payment under this Section 3.2.2.
-25-
<PAGE>
3.3. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS. The Borrower shall
have the right, at its election, to repay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time without penalty or
premium, PROVIDED that any full or partial repayment of the outstanding amount
of any Eurodollar Rate Loans pursuant to this Section 3.3 made on a date other
than the last day of the Interest Period relating thereto shall be subject to
customary breakage charges as provided in Section 5.11. The Borrower shall give
the Agent, no later than 10:00 a.m., Boston time, at least one (1) Business
Day's prior written notice, of any proposed repayment pursuant to this Section
3.3 of Alternate Base Rate Loans, and three (3) Eurodollar Business Days' notice
of any proposed repayment pursuant to this Section 3.3 of Eurodollar Rate Loans,
in each case, specifying the proposed date of payment of Revolving Credit Loans
and the principal amount to be paid. Each such partial repayment of the
Revolving Credit Loans shall be in an amount of $1,000,000 or an integral
multiple of $100,000 in excess thereof, shall be accompanied by the payment of
accrued interest on the principal repaid to the date of payment, and shall be
applied, in the absence of instruction by the Borrower, first to the principal
of Alternate Base Rate Loans and then to the principal of Eurodollar Rate Loans
(in inverse order of the last days of their respective Interest Periods). Each
partial repayment shall be allocated among the Banks, in proportion, as nearly
as practicable, to the respective unpaid principal amount of each Bank's
Revolving Credit Loans, with adjustments to the extent practicable to equalize
any prior repayments not exactly in proportion. Any amounts repaid under this
Section 3.3 may be reborrowed prior to the Revolving Credit Loan Maturity Date
as provided in Section 2.6, subject to the conditions of Section 11.
4. THE TERM LOAN.
4.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth in
this Credit Agreement, each Bank severally shall lend to the Borrower on the
Revolving Credit Loan Maturity Date the amount of its Commitment Percentage of
the principal amount of the Revolving Credit Loans outstanding at the Revolving
Credit Loan Maturity Date. The proceeds of the Term Loan shall be applied by
the Agent to repay in full the principal of the Revolving Credit Loans
outstanding at the Revolving Credit Loan Maturity Date.
4.2. THE NOTES. The Term Loan shall be evidenced by the Notes. Each Note
shall be payable to the order of each Bank in a principal amount equal to such
Bank's Commitment Percentage of the Term Loan and representing the obligation
-26-
<PAGE>
of the Borrower to pay to such Bank such principal amount or, if less, the
outstanding amount of such Bank's Commitment Percentage of the Term Loan, plus
interest accrued thereon, as set forth below. The Borrower irrevocably
authorizes each Bank to make or cause to be made a notation on such Bank's
Record reflecting the original principal amount of such Bank's Commitment
Percentage of the Term Loan and, at or about the time of such Bank's receipt of
any principal payment on such Bank's Term Loan, an appropriate notation on such
Bank's Record reflecting such payment. The aggregate unpaid amount set forth on
such Bank's Record shall be PRIMA FACIE evidence of the principal amount thereof
owing and unpaid to such Bank, but the failure to record, or any error in so
recording, any such amount on such Bank's Record shall not affect the
obligations of the Borrower hereunder or under any Note to make payments of
principal of and interest on any Term Loan when due.
4.3. MANDATORY PAYMENTS OF PRINCIPAL OF TERM LOAN.
4.3.1. GENERAL. The Borrower shall pay to the Agent for the account
of the Banks the principal amount of the Term Loan as follows:
(a) seven consecutive quarterly installments due and payable on the
last day of each calendar quarter commencing on June 30, 1997, each in an amount
equal to the quotient of (i) the initial principal amount of the Term Loan,
divided by (ii) eight (8); and
(b) the unpaid balance of the Term Loan on the Term Loan Maturity
Date.
4.3.2. CHANGE OF CONTROL. Upon the occurrence of a Change of Control
or impending Change of Control:
(a) the Borrower shall notify the Agent and each Bank of such Change
of Control or impending Change of Control as provided in Section 7.5.4;
(b) each Bank shall have the right within fifteen (15) days after the
date of such Bank's receipt of a Change of Control Notice under clause (a) above
to demand payment in full of its pro rata share of the outstanding principal of
the Term Loan, all accrued and unpaid interest thereon, and any other amounts
owing under the Loan Documents;
(c) in the event that any Bank shall have made a demand under clause
(b) above or any demand for payment shall have been made under the second
paragraph of section
-27-
<PAGE>
2.1(c) of any of the Note Agreements, the Borrower shall promptly, but in no
event later than five (5) Business Days after such demand, deliver notice to
each Bank (which notice shall identify the Bank or Holder (as defined in the
Note Agreements) making such demand) and, notwithstanding the provisions of
clause (b) above, the right of each Bank to demand repayment shall remain in
effect through the fifteenth (15th) day next succeeding receipt by such Bank of
any notice required to be given pursuant to this clause (c), PROVIDED that the
provisions of this clause (c) shall only apply with respect to demands given by
Banks prior to the expiration of the period specified in clause (b) and demands
under the Note Agreements given prior to the expiration of the period specified
in the second paragraph of section 2.1(c) of the Note Agreements; and
(d) in the event any Bank makes a demand under clause (b) or clause
(c) above, the Borrower shall, on the first to occur of (i) the date of any
prepayment of any Indebtedness under the Note Agreements pursuant to section
2.1(c) thereof, and (ii) the later of (A) the Change of Control Date and (B) the
date forty (40) days after the date of the Borrower's Change of Control Notice
under clause (a) above, pay to the Agent for the credit of such Bank its pro
rata share of the outstanding principal of the Term Loan, all accrued and unpaid
interest thereon, and any other amounts owing under the Loan Documents,
(provided that (i) any Bank may require the Borrower to postpone prepayment of a
Eurodollar Rate Loan until the last day of the Interest Period with respect to
such Eurodollar Rate Loan, and (ii) if any Bank elects to require prepayment of
a Eurodollar Rate Loan that has an Interest Period ending less than sixty (60)
days after the date of such demand on a date that is not the last day of the
Interest Period for such Eurodollar Rate Loan, such Bank shall not be entitled
to receive any amounts payable under Section 5.11 in respect of the prepayment
of such Eurodollar Rate Loan).
Upon any demand for payment by any Bank under this Section 4.3.2, the credit
hereunder shall terminate as to such Bank, and such Bank shall be relieved of
all further obligations to make Loans to the Borrower.
4.4. OPTIONAL REPAYMENT OF TERM LOAN. The Borrower shall have the right
at any time to prepay the Term Loans on or before the Term Loan Maturity Date,
as a whole or in part, upon not less than three (3) Business Days' prior written
notice to the Agent, without premium or penalty, PROVIDED that any full or
partial repayment of the outstanding amount of any Eurodollar Rate Loans
pursuant to this Section 4.4 made on a date other than the last day of the
-28-
<PAGE>
Interest Period relating thereto shall be subject to customary breakage charges
as provided in Section 5.11. Each such partial repayment of the Term Loan shall
be in an amount of $1,000,000 or an integral multiple of $100,000 in excess
thereof, shall be accompanied by the payment of accrued interest on the
principal repaid to the date of payment, shall be applied against the scheduled
installments of principal due on the Term Loan in the inverse order of maturity,
and shall be applied, in the absence of contrary instructions by the Borrower,
first to the principal of Alternate Base Rate Loans and then to the principal of
Eurodollar Rate Loans (in inverse order of the last days of their respective
Interest Periods). Each partial repayment shall be allocated among the Banks,
in proportion, as nearly as practicable, to the respective unpaid principal
amount of each Bank's Term Loan, with adjustments to the extent practicable to
equalize any prior repayments not exactly in proportion. No amount repaid with
respect to the Term Loan may be reborrowed.
4.5. INTEREST ON TERM LOAN.
4.5.1. INTEREST RATES. Except as otherwise provided in Section 5.12,
the Term Loan shall bear interest as follows:
(a) Each Alternate Base Rate Loan shall bear interest at an annual
rate equal to the sum of the Alternate Base Rate PLUS the Alternate Base Rate
Applicable Margin, both as in effect from time to time while such Alternate Base
Rate Loan is outstanding.
(b) Each Eurodollar Rate Loan shall bear interest for each Interest
Period at an annual rate equal to the sum of the Eurodollar Rate for such
Interest Period PLUS the Eurodollar Rate Applicable Margin in effect from time
to time during such Interest Period.
4.5.2. INTEREST PAYMENT DATES. The Borrower shall pay all accrued
interest on the Term Loan in arrears on each Interest Payment Date with respect
thereto.
4.5.3. INTEREST RATE OPTIONS. If the Borrower shall have given the
Agent, at least three (3) Business Days prior to the date on which the Term Loan
is made, a notice electing to convert all or any part of the Term Loan, AB
INITIO, into a Eurodollar Rate Loan (and the other conditions for conversion to
a Eurodollar Rate Loan as set forth, MUTATIS MUTANDIS, in Section 2.7.1 are
satisfied as of the date on which the Term Loan is made), the portion of the
Term Loan subject to such notice shall bear interest at a
-29-
<PAGE>
Eurodollar Rate as specified therein. All portions of the Term Loan not subject
to such a notice shall when made bear interest at the Alternate Base Rate.
After the Term Loan has been made, the provisions of Section 2.7 and Section 2.9
shall apply MUTATIS MUTANDIS with respect to the Term Loan so that the Borrower
may have the same interest rate options with respect to the Term Loan as it was
entitled to with respect to the Revolving Credit Loans.
5. CERTAIN GENERAL PROVISIONS.
5.1. CLOSING FEE. The Borrower shall on the Closing Date pay to the
Agent, for the PRO RATA accounts of the Banks according to their respective
Commitments, a closing fee in the amount of Two Hundred Thousand Dollars
($200,000). In no case shall any portion of the closing fee be refundable.
5.2. AGENT'S FEE. The Borrower shall pay to the Agent an agent's fee as
separately agreed by the Borrower and the Agent.
5.3. APPLICATION OF PAYMENTS. Except as otherwise provided in this Credit
Agreement, all payments in respect of any Loan shall be applied first to accrued
and unpaid interest on such Loan and second to the outstanding principal of such
Loan.
5.4. FUNDS FOR PAYMENTS.
5.4.1. PAYMENTS TO AGENT. All payments of principal, interest,
commitment fees and any other amounts due hereunder or under any of the other
Loan Documents shall be made to the Agent, for the respective accounts of the
Banks and the Agent, at the Agent's Head Office or at such other location in the
Boston, Massachusetts, area that the Agent may from time to time designate, in
each case in immediately available funds.
5.4.2. NO OFFSET, ETC. All payments by the Borrower hereunder and
under any of the other Loan Documents shall be made without setoff or
counterclaim and free and clear of and without deduction for any taxes, levies,
imposts, duties, charges, fees, deductions, withholdings, compulsory loans,
restrictions, or conditions of any nature now or hereafter imposed or levied by
any Government Authority unless the Borrower is compelled by Government Mandate
to make such deduction or withholding. If any such obligation is imposed upon
the Borrower with respect to any amount payable by it hereunder or under any of
the other
-30-
<PAGE>
Loan Documents (other than with respect to taxes on the income or profits of any
Bank or the Agent), the Borrower will pay to the Agent, for the account of the
Banks or (as the case may be) the Agent, on the date on which such amount is due
and payable hereunder or under such other Loan Document, such additional amount
in Dollars as shall be necessary to enable the Banks or the Agent to receive the
same net amount which the Banks or the Agent would have received on such due
date had no such obligation been imposed upon the Borrower. The Borrower will
deliver promptly to the Agent certificates or other valid vouchers for all taxes
or other charges deducted from or paid with respect to payments made by the
Borrower hereunder or under such other Loan Document. If a refund is received
(either in cash or by means of a credit against future tax obligations) by the
Agent or any Bank in respect of an amount previously paid by the Borrower
pursuant to the immediately preceding sentence, such refund shall be promptly
paid over to the Borrower.
5.5. COMPUTATIONS. All computations of interest with respect to Alternate
Base Rate Loans and all computations of the commitment fee shall be based on a
year of 365 or 366 days, as appropriate, and paid for the actual number of days
elapsed. All computations of interest with respect to Eurodollar Rate Loans
shall be based on a year of 360 days and paid for the actual number of days
elapsed. Except as otherwise provided in the definition of the term "Interest
Period" with respect to Eurodollar Rate Loans, whenever a payment hereunder or
under any of the other Loan Documents becomes due on a day that is not a
Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension.
5.6. INABILITY TO DETERMINE EURODOLLAR RATE. In the event, prior to the
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Agent shall determine that adequate and reasonable methods do not exist for
ascertaining the Eurodollar Rate that would otherwise determine the rate of
interest to be applicable to any Eurodollar Rate Loan during any Interest
Period, the Agent shall forthwith give notice of such determination (which shall
be conclusive and binding on the Borrower and the Banks) to the Borrower and the
Banks. In such event (a) any Loan Request or Conversion Request with respect to
Eurodollar Rate Loans shall be automatically withdrawn and shall be deemed a
request for Alternate Base Rate Loans, (b) each Eurodollar Rate Loan will
automatically, on the last day of the then current Interest Period relating
thereto, become an Alternate Base Rate Loan, and (c) the obligations
-31-
<PAGE>
of the Banks to make Eurodollar Rate Loans shall be suspended until the Agent
determines that the circumstances giving rise to such suspension no longer
exist, whereupon the Agent shall so notify the Borrower and the Banks.
5.7. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future Government Mandate shall make it unlawful for any Bank to make
or maintain Eurodollar Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrower and the other Banks and thereupon (a) the
commitment of such Bank to make Eurodollar Rate Loans or convert Alternate Base
Rate Loans to Eurodollar Rate Loans shall forthwith be suspended, and (b) such
Bank's Loans then outstanding as Eurodollar Rate Loans, if any, shall be
converted automatically to Alternate Base Rate Loans on the last day of each
then existing Interest Period applicable to such Eurodollar Rate Loans or within
such earlier period after the occurrence of such circumstances as may be
required by Government Mandate. The Borrower shall promptly pay the Agent for
the account of such Bank, upon demand by such Bank, any additional amounts
necessary to compensate such Bank for any costs incurred by such Bank in making
any conversion in accordance with this Section 5.7 other than on the last day of
an Interest Period, including any interest or fees payable by such Bank to
lenders of funds obtained by it in order to make or maintain its Eurodollar Rate
Loans hereunder.
5.8. ADDITIONAL COSTS, ETC. If any present or future applicable
Government Mandate (whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction, or withholding of any nature with respect to this
Credit Agreement, the other Loan Documents, such Bank's Commitment, or the
Loans (other than taxes based upon or measured by the income or profits of
such Bank or the Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Bank of the principal of or
the interest on any Loans or any other amounts payable to any Bank or the
Agent under this Credit Agreement or the other Loan Documents, or
(c) impose, increase, or render applicable (other than to the extent
specifically provided for elsewhere in this Credit Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy, or other
-32-
<PAGE>
similar requirements (whether or not having the force of law) against
assets held by, or deposits in or for the account of, or loans by, or
commitments of an office of any Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, the Loans, such Bank's Commitment, or any class of loans or
commitments of which any of the Loans or such Bank's Commitment forms a
part,
and the result of any of the foregoing is:
(i) to increase by an amount deemed by such Bank to be material
the cost to any Bank of making, funding, issuing, renewing, extending, or
maintaining any of the Loans or such Bank's Commitment, or
(ii) to reduce, by an amount deemed by such Bank or the Agent, as
the case may be, to be material, the amount of principal, interest, or
other amount payable to such Bank or the Agent hereunder on account of such
Bank's Commitment or any of the Loans, or
(iii) to require such Bank or the Agent to make any payment that,
but for such conditions or requirements described in clauses (a) through
(d), would not be payable hereunder, or forego any interest or other sum
that, but for such conditions or requirements described in clauses (a)
through (d), would be payable to such Bank or the Agent hereunder, in any
case the amount of which payment or foregone interest or other sum is
deemed by such Bank or the Agent, as the case may be, to be material and is
calculated by reference to the gross amount of any sum receivable or deemed
received by such Bank or the Agent from the Borrower hereunder,
then, and in each such case, (aa) the Borrower will, upon demand made by such
Bank or (as the case may be) the Agent at any time and from time to time (but in
any case not later than the first to occur of (I) the date one year after such
event described in clause (i), (ii), or (iii) giving rise to such demand, and
(II) the date ninety (90) days after both the payment in full of all outstanding
Loans and termination of the Commitments) and as often as the occasion therefor
may arise, pay to such Bank or the Agent such additional amounts as will be
sufficient to compensate such Bank or the Agent for such additional cost,
reduction, payment, foregone interest, or other sum, (bb) the Borrower shall be
entitled,
-33-
<PAGE>
upon notice to the Agent and each Bank given within ninety (90) days of any
demand by a Bank under clause (aa), to repay in cash in full all, but not less
than all, of the Loans of such Bank, together with all accrued and unpaid
interest on such Loans and any other amounts owing to such Bank under the Loan
Documents and terminate (in full and not in part) such Bank's Commitment, and,
(cc) in the event the Borrower elects to repay the Loans of any Bank under
clause (bb), each other Bank shall be entitled, by notice to the Agent and the
Borrower given within thirty (30) days after receipt of the notice referred to
in clause (bb), to require the Borrower to repay in cash in full, within thirty
(30) days of such notice under this clause (cc), all, but not less than all, of
the Loans of such other Bank, together with all accrued and unpaid interest on
such Loans and any other amounts owing to such other Bank under the Loan
Documents. Subject to the terms specified above in this Section 5.8, the
obligations of the Borrower under this Section 5.8 shall survive repayment of
the Loans and termination of the Commitments.
5.9. CAPITAL ADEQUACY. If after the date hereof any Bank or the Agent
determines that (a) the adoption of or change in any Government Mandate (whether
or not having the force of law) regarding capital requirements for banks or bank
holding companies or any change in the interpretation or application thereof by
any Government Authority with appropriate jurisdiction, or (b) compliance by
such Bank or the Agent, or any corporation controlling such Bank or the Agent,
with any Government Mandate (whether or not having the force of law) has the
effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Loans to a level below that which such Bank or the Agent could
have achieved but for such adoption, change, or compliance (taking into
consideration such Bank's or the Agent's then existing policies with respect to
capital adequacy and assuming full utilization of such Entity's capital) by any
amount reasonably deemed by such Bank or (as the case may be) the Agent to be
material, then such Bank or the Agent may notify the Borrower of such fact. To
the extent that the amount of such reduction in the return on capital is not
reflected in the Alternate Base Rate, (aa) the Borrower shall pay such Bank or
(as the case may be) the Agent for the amount of such reduction in the return on
capital as and when such reduction is determined upon presentation by such Bank
or (as the case may be) the Agent of a certificate in accordance with Section
5.10 hereof (but in any case not later than the first to occur of (I) the date
one year after such adoption, change, or compliance causing such reduction, and
(II) as to adoptions of or changes in Government Mandates occurring prior to the
repayment of the
-34-
<PAGE>
Loans and the termination of the Commitment the date ninety (90) days after both
the payment in full of all outstanding Loans and termination of the
Commitments), (bb) the Borrower shall be entitled, upon notice to the Agent and
each Bank given within ninety (90) days of any notice by such Bank under the
next preceding sentence, to repay in cash in full all, but not less than all, of
the Loans of such Bank, together with all accrued and unpaid interest on such
Loans and any other amounts owing to such Bank under the Loan Documents and
terminate (in full and not in part) such Bank's Commitment, and, (cc) in the
event the Borrower elects to repay the Loans of any Bank under clause (bb), each
other Bank shall be entitled, by notice to the Agent and the Borrower given
within thirty (30) days after receipt of the notice referred to in clause (bb),
to require the Borrower to repay in cash in full, within thirty (30) days of the
notice under this clause (cc), all, but not less than all, of the Loans of such
other Bank, together with all accrued and unpaid interest on such Loans and any
other amounts owing to such other Bank under the Loan Documents. Each Bank
shall allocate such cost increases among its customers in good faith and on an
equitable basis. Subject to the terms specified above in this Section 5.9, the
obligations of the Borrower under this Section 5.9 shall survive repayment of
the Loans and termination of the Commitments.
5.10. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to Section 5.8 or Section 5.9 and a brief explanation of such
amounts which are due and in reasonable detail the basis of the calculation and
allocation thereof, submitted by any Bank or the Agent to the Borrower, shall be
conclusive evidence, absent manifest error, that such amounts are due and owing.
5.11. INDEMNITY. The Borrower shall indemnify and hold harmless each Bank
from and against any loss, cost, or expense (excluding loss of anticipated
profits) that such Bank may sustain or incur as a consequence of (a) default by
the Borrower in payment of the principal amount of or any interest on any
Eurodollar Rate Loans as and when due and payable, including any such loss or
expense arising from interest or fees payable by such Bank to lenders of funds
obtained by it in order to maintain its Eurodollar Rate Loans, (b) default by
the Borrower in making a borrowing or conversion after the Borrower has given
(or is deemed to have given) a Loan Request or a Conversion Request; or (c)
except as otherwise expressly provided in Section 3.2.2 or Section 4.3.2, the
making of any payment of a Eurodollar Rate Loan or the making of any conversion
of any such Loan to an Alternate Base Rate Loan on a day that is not the last
day of the applicable Interest Period with respect thereto, including
-35-
<PAGE>
interest or fees payable by such Bank to lenders of funds obtained by it in
order to maintain any such Loans. The obligations of the Borrower under this
Section 5.11 shall survive repayment of the Loans and termination of the
Commitments.
5.12. INTEREST AFTER DEFAULT. All amounts outstanding under the Loan
Documents that are not paid when due, including all overdue principal and (to
the extent permitted by applicable Government Mandate) interest and all other
overdue amounts, shall to the extent permitted by applicable Government Mandate
bear interest compounded monthly until such amount shall be paid in full (after
as well as before judgment) at a rate per annum equal to two percent (2%) above
the rate of interest otherwise applicable to such Loans pursuant to Section 2.5
or Section 4.5. Any interest accruing under this section on overdue principal
or interest shall be due and payable upon demand.
5.13. HLT CLASSIFICATION. If, after the date hereof, the Agent determines
or is advised by any Bank that such Bank has determined, or the Agent receives
notice from or is advised by any Bank that such Bank has received notice from
any Government Authority having jurisdiction over such Bank, that any of the
Commitments or Loans are classified as a "highly leveraged transaction" (an "HLT
CLASSIFICATION") pursuant to any existing regulations regarding "highly
leveraged transactions" or any modification, amendment, or interpretation
thereof, or the adoption of new regulations regarding "highly leveraged
transactions" after the date hereof by any Government Authority, the Agent shall
promptly give notice of such HLT Classification to the Borrower and the Banks.
The Agent, the Banks, and the Borrower shall thereupon commence negotiations in
good faith to agree on the extent to which fees, interest rates, and/or margins
hereunder should be increased so as to reflect such HLT Classification. If the
Borrower and the Majority Banks agree on the amount of such increase or
increases, this Credit Agreement shall be promptly amended to give effect to
such increase or increases. If the Borrower and the Majority Banks fail to so
agree within forty-five (45) days of an HLT Classification, the Agent, by notice
(the "REFINANCE NOTICE") given at the request of the Majority Banks, may require
the Borrower to seek to refinance the Loans. In the event the Borrower fails to
refinance the Loans within ninety (90) days after the Refinance Notice is given
by the Agent as provided above, then the Agent shall, if so requested by the
Majority Banks, by notice to the Borrower terminate the Commitments, and the
Commitments shall thereupon terminate, with the provisions of Section 3.2 then
becoming applicable, and the Loans shall also then become
-36-
<PAGE>
due and payable in full. The Agent and the Banks acknowledge that an HLT
Classification is not a Default or an Event of Default.
6. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Banks and the Agent as follows:
6.1. CORPORATE AUTHORITY.
6.1.1. INCORPORATION; GOOD STANDING. Each of the Borrower, its
Subsidiaries, and the General Partner (a) is a corporation or limited
partnership, as the case may be, duly organized, validly existing, and in good
standing under the laws of its state of organization, (b) has all requisite
corporate or partnership power to own its material property and conduct its
material business as now conducted and as presently contemplated, and (c) is in
good standing as a foreign corporation or limited partnership, as the case may
be, and is duly authorized to do business in each jurisdiction where it owns or
leases properties or conducts any business so as to require such qualification
except where a failure to be so qualified would not be likely to have a Material
Effect.
6.1.2. AUTHORIZATION. The execution, delivery, and performance of
this Credit Agreement and the other Loan Documents to which the Borrower, any of
its Subsidiaries, or the General Partner is or is to become a party and the
transactions contemplated hereby and thereby (a) are within the corporate or
partnership power of each such Entity, (b) have been duly authorized by all
necessary corporate or partnership proceedings on behalf of each such Entity,
(c) do not conflict with or result in any breach or contravention of any
Government Mandate to which any such Entity is subject, (d) do not conflict with
or violate any provision of the corporate charter or bylaws or the limited
partnership certificate or agreement, as the case may be, of any such Entity,
and (e) do not violate, conflict with, constitute a default or event of default
under, or result in any rights to accelerate or modify any obligations under any
Contract to which any such Entity is party or subject, or to which any of its
respective assets are subject, except, as to the foregoing clauses (c) and (e)
only, where the same would not be likely to have a Material Effect.
6.1.3. ENFORCEABILITY. The execution and delivery of this Credit
Agreement and the other Loan Documents to which the Borrower, any of its
Subsidiaries, or
-37-
<PAGE>
the General Partner is or is to become a party will result in valid and legally
binding obligations of such Person enforceable against it in accordance with the
respective terms and provisions hereof and thereof, except as enforceability is
limited by bankruptcy, insolvency, reorganization, moratorium, or other laws
relating to or affecting generally the enforcement of creditors' rights and by
general principles of equity, regardless of whether enforcement is sought in a
Proceeding in equity or at law.
6.1.4. EQUITY SECURITIES. The General Partner is the only general
partner of the Borrower. Save as set forth on SCHEDULE 6.1.4, neither the
Borrower nor the General Partner has any authorized or outstanding Equity
Securities, or has agreed, committed, or otherwise obligated itself to authorize
or issue any Equity Securities. All of the outstanding Equity Securities of the
Borrower are validly issued, fully paid, and non-assessable.
6.2. GOVERNMENTAL APPROVALS. The execution, delivery, and performance by
the Borrower, its Subsidiaries, and the General Partner of this Credit Agreement
and the other Loan Documents to which the Borrower, any of its Subsidiaries, or
the General Partner is or is to become a party and the transactions contemplated
hereby and thereby do not require the approval or consent of, or filing with,
any Government Authority other than those already obtained and set forth on
SCHEDULE 6.2.
6.3. LIENS; LEASES. The assets reflected in the consolidated balance
sheet of the Borrower dated as at the Balance Sheet Date and delivered to the
Agent and the Banks under Section 6.4.1 are subject to no Liens except Permitted
Liens. Each of the Borrower and its Subsidiaries enjoys quiet possession under
all leases relating to Real Estate or personal property to which it is party as
a lessee, and each such lease is Fully Effective.
6.4. FINANCIAL STATEMENTS AND PROJECTIONS.
6.4.1. FINANCIAL STATEMENTS. There has been furnished to the Agent
and each of the Banks (a) a consolidated balance sheet of the Borrower as at the
Balance Sheet Date, and a consolidated statement of income and cash flow of the
Borrower for the fiscal year then ended, certified by the Borrower's independent
certified public accountants, and (b) unaudited consolidated balance sheets of
the Borrower and the Consolidated Subsidiaries as at March 31, 1993, June 30,
1993, and September 30, 1993 and consolidated statements of income and cash flow
of the Borrower and the Consolidated Subsidiaries for the
-38-
<PAGE>
respective fiscal periods then ended and as set forth in the Borrower's
Quarterly Reports on Form 10-Q for such fiscal quarters. Such balance sheets
and statements of income have been prepared in accordance with generally
accepted accounting principles, and fairly present in all material respects the
financial condition of the Borrower and the Consolidated Subsidiaries as at the
close of business on the respective dates thereof and the results of operations
of the Borrower and the Consolidated Subsidiaries for the fiscal periods then
ended; or, in the case of the financial statements referred to in clause (b),
have been prepared in accordance with Rule 10-01 of Regulation S-X of the
Securities and Exchange Commission, and contain all adjustments necessary for a
fair presentation of (A) the results of operations of the Borrower for the
periods covered thereby, (B) the financial position of the Borrower at the date
thereof, and (C) the cash flows of the Borrower for periods covered thereby
(subject to year-end adjustments). There are no contingent liabilities of the
Borrower or the Consolidated Subsidiaries as of such dates involving material
amounts, known to the executive management of the Borrower that (aa) should have
been disclosed in said balance sheets and/or the related notes thereto in
accordance with generally accepted accounting principles and the rules and
regulations of the Securities and Exchange Commission, and (bb) were not so
disclosed.
6.4.2. PROJECTIONS. The projections dated August 2, 1993 as revised
on February 11, 1994 of the annual operating budgets, balance sheets, and cash
flow statements of the Borrower and its Subsidiaries on a consolidated basis for
the 1994 to 1998 fiscal years, copies of which have been delivered to the Agent
and each Bank, have been prepared on the basis of reasonable assumptions (which
assumptions, if material, are stated therein) and reflect the reasonable
estimates of the Borrower as to the results of operations and other information
projected therein based on information known to the executive management of the
Borrower as of the date such projections were prepared. As of the Closing Date
nothing has come to the attention of any of the chief financial officer, the
chief accounting officer, or the controller of the Borrower that would result in
any material adverse change in any of such projections.
6.5. NO MATERIAL CHANGES, ETC. No material adverse change in the Business
of the Borrower and its Consolidated Subsidiaries, taken as a whole, has
occurred from that set forth in the consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as at the Balance Sheet Date, or the
consolidated statement of income for the fiscal year then ended.
-39-
<PAGE>
6.6. PERMITS. The Borrower and its Subsidiaries have all Permits
necessary or appropriate for them to conduct their Business, except where the
failure to have such Permits would not be likely to have a Material Effect. All
of such Permits are in full force and effect. Without limiting the foregoing,
the Borrower is duly registered as an "investment adviser" under the Investment
Advisers Act of 1940 and under the applicable laws of each state in which such
registration is required in connection with the investment advisory business of
the Borrower and in which the failure to obtain such registration would be
likely to have a Material Effect; Alliance Distributors is duly registered as a
"broker/dealer" under the Securities Exchange Act of 1934 and under the
securities or blue sky laws of each state in which such registration is required
in connection with the business conducted by Alliance Distributors and where a
failure to obtain such registration would be likely to have a Material Effect,
and is a member in good standing of the National Association of Securities
Dealers, Inc.; no Proceeding is pending or threatened with respect to the
suspension, revocation, or termination of any such registration or membership,
and the termination or withdrawal of any such registration or membership is not
contemplated by the Borrower or Alliance Distributors, except, only with respect
to registrations by the Borrower and Alliance Distributors required under state
law, as would not be likely to have a Material Effect.
6.7. LITIGATION. There is no Proceeding of any kind pending or threatened
against the Borrower, any of its Subsidiaries, or the General Partner that (a)
is reasonably likely to, either in any case or in the aggregate, have a Material
Effect, or (b) questions the validity of this Credit Agreement or any of the
other Loan Documents, or any action taken or to be taken pursuant hereto or
thereto.
6.8. MATERIAL CONTRACTS. Except as would not be likely to have a Material
Effect, each Contract to which any of the Borrower and its Subsidiaries is party
or subject, or by which any of their respective assets are bound (including
investment advisory contracts and investment company distribution plans) (a) is
Fully Effective, (b) is not subject to any default or event of default with
respect to the Borrower, any of its Subsidiaries or, to the best knowledge of
the executive management of the Borrower, any other party, (c) is not subject to
any notice of termination given or received by the Borrower or any of its
Subsidiaries, and (d) is, to the best knowledge of the executive management of
the Borrower, the legal, valid, and
-40-
<PAGE>
binding obligation of each party thereto other than the Borrower and its
Subsidiaries enforceable against such parties according to its terms.
6.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. None of the Borrower,
its Subsidiaries, and the General Partner is, in any respect material to the
Borrower and its Consolidated Subsidiaries taken as a whole, in violation of or
default under (a) any provision of its certificate of incorporation or by-laws,
or its certificate of limited partnership or agreement of limited partnership,
as the case may be, (b) any Contract to which it is or may be subject or by
which it or any of its properties are or may be bound, or (c) any Government
Mandate, including Government Mandates relating to occupational safety and
employment matters.
6.10. TAX STATUS. The Borrower and its Subsidiaries (a) have made or
filed all federal and state income and all other tax returns, reports, and
declarations required by any Government Authority to which any of them is
subject, except where the failure to make or file the same would not be likely
to have a Material Effect, (b) have paid all taxes and other governmental
assessments and charges due, except those being contested in good faith and by
appropriate Proceedings or those where a failure to pay is not reasonably likely
to have a Material Effect, and (c) have set aside on their books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports, or declarations apply. There are no
unpaid taxes in any material amount claimed to be due from the Borrower or any
of its Subsidiaries by any Government Authority, and the executive management of
the Borrower knows of no basis for any such claim.
6.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred
and is continuing.
6.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Borrower
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", as such terms are defined in the Public Utility Holding
Company Act of 1935. Neither the Borrower nor any of its Subsidiaries
(excluding investment companies in which the Borrower or a Consolidated
Subsidiary has made "seed money" investments permitted by Section 8.6(b))is an
"investment company", as such term is defined in the 1940 Act.
6.13. INSURANCE. The Borrower and its Subsidiaries maintain insurance
with financially sound and reputable insurers in such coverage amounts, against
such risks, with
-41-
<PAGE>
such deductibles and upon such other terms, or are self-insured in respect of
such risks (with appropriate reserves to the extent required by generally
accepted accounting principles), as is reasonable and customary for firms
engaged in businesses similar to those of the Borrower and its Subsidiaries.
All policies of insurance maintained by the Borrower or its Subsidiaries are
Fully Effective. All premiums due on such policies have been paid or accrued on
the books of the Borrower or its Subsidiaries, as appropriate.
6.14. CERTAIN TRANSACTIONS. None of the officers, directors, partners, or
employees of the Borrower or any of its Subsidiaries, or, to the knowledge of
the executive management of the Borrower, any Entity (other than a Subsidiary)
in which any such officer, director, partner, or employee has a substantial
interest or is an officer, director, trustee, or partner, is at present a party
to any transaction with the Borrower or any of its Subsidiaries (other than for
or in connection with services as officers, directors, partners, or employees,
as the case may be), including any Contract providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any such officer, director, partner,
employee, or Entity.
6.15. EMPLOYEE BENEFIT PLANS.
6.15.1. IN GENERAL. Set forth on SCHEDULE 6.15 is a list of each
Employee Benefit Plan and Multiemployer Plan. Each Employee Benefit Plan has
been maintained and operated in compliance in all material respects with the
provisions of ERISA and, to the extent applicable, the Code, including the
provisions thereunder respecting prohibited transactions, except where the
failure to so comply would not be likely to have a Material Effect.
6.15.2. TERMINABILITY OF WELFARE PLANS. Under each Employee Benefit
Plan which is an employee welfare benefit plan within the meaning of Section
3(1) or Section 3(2)(B) of ERISA, no benefits are due unless the event giving
rise to the benefit entitlement occurs prior to plan termination (except as
required by Title I, Part 6 of ERISA). The Borrower or an ERISA Affiliate, as
appropriate, may terminate each such Plan at any time (or at any time subsequent
to the expiration of any applicable bargaining agreement) in the discretion of
the Borrower or such ERISA Affiliate without liability to any Person, except as
would not be likely to have a Material Effect.
-42-
<PAGE>
6.15.3. GUARANTEED PENSION PLANS. Each contribution required to be
made to a Guaranteed Pension Plan, whether required to be made to avoid the
incurrence of an accumulated funding deficiency, the notice or lien provisions
of Section 302(f) of ERISA, or otherwise, has been timely made. No waiver of an
accumulated funding deficiency or extension of amortization periods has been
received with respect to any Guaranteed Pension Plan. No liability to the PBGC
(other than required insurance premiums, all of which have been paid) has been
incurred by the Borrower or any ERISA Affiliate with respect to any Guaranteed
Pension Plan and there has not been any ERISA Reportable Event, or any other
event or condition which presents a material risk of termination of any
Guaranteed Pension Plan by the PBGC. Based on the latest valuation of each
Guaranteed Pension Plan (which in each case occurred within fifteen (15) months
of the date of this representation), and on the actuarial methods and
assumptions employed for that valuation, the aggregate benefit liabilities of
all such Guaranteed Pension Plans within the meaning of Section 4001 of ERISA
did not exceed the aggregate value of the assets of all such Guaranteed Pension
Plans by more than $5,000,000, disregarding for this purpose the benefit
liabilities and assets of any Guaranteed Pension Plan with assets in excess of
benefit liabilities.
6.15.4. MULTIEMPLOYER PLANS. Neither the Borrower nor any ERISA
Affiliate has incurred any material liability (including secondary liability) to
any Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan under Section 4201 of ERISA or as a result of a sale of
assets described in Section 4204 of ERISA. Neither the Borrower nor any ERISA
Affiliate has been notified that any Multiemployer Plan is in reorganization or
insolvent under and within the meaning of Section 4241 or Section 4245 of ERISA
or that any Multiemployer Plan intends to terminate or has been terminated under
Section 4041A of ERISA.
6.16. REGULATIONS U AND X. The proceeds of the Loans shall be used (a) to
finance the Specified Acquisitions, (b) to finance Permitted Acquisitions, (c)
to finance the payment by the Borrower of certain commissions to brokers in
connection with the sale of "B" shares of investment companies or mutual funds
managed or advised by the Borrower or one of its Subsidiaries, and (d) for
working capital and general corporate purposes. 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 of the Board of Governors
of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
-43-
<PAGE>
6.17. ENVIRONMENTAL COMPLIANCE. To the best of the Borrower's knowledge:
(a) none of the Borrower, its Subsidiaries, the General Partner, and
any operator of the Real Estate or any operations thereon is in violation, or
alleged violation, of any Government Mandate or Permit pertaining to
environmental, safety, or public health matters, including the Resource
Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Clean Water
Act, the Federal Clean Air Act, and the Toxic Substances Control Act
(hereinafter "ENVIRONMENTAL LAWS"), which violation would be likely to have a
material adverse effect on the environment or a Material Effect;
(b) neither the Borrower nor any of its Subsidiaries has received
notice from any third party, including any Government Authority, (i) that any
one of them has been identified by the United States Environmental Protection
Agency ("EPA") as a potentially responsible party under CERCLA with respect to a
site listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B
(1986); (ii) that any hazardous waste, as defined by 42 U.S.C. Section 9601(5),
any hazardous substances as defined by 42 U.S.C. Section 9601(14), any pollutant
or contaminant as defined by 42 U.S.C. Section 9601(33) and any toxic
substances, oil, hazardous materials, or other chemicals or substances regulated
by any Environmental Laws ("HAZARDOUS SUBSTANCES") that any one of them has
generated, transported, or disposed of has been found at any site at which a
Government Authority or other third party has conducted, or has ordered that
other parties conduct, a remedial investigation, removal, or other response
action pursuant to any Environmental Law; or (iii) that it is or shall be a
named party to any Proceeding (in each case, contingent or otherwise) arising
out of any third party's incurrence of costs, expenses, losses, or damages of
any kind whatsoever in connection with the release of Hazardous Substances; and
(c)(i) no portion of the Real Estate has been used for the
handling, processing, storage, or disposal of Hazardous Substances except
in accordance with applicable Environmental Laws;
(ii) no underground tank or other underground storage receptacle
for Hazardous Substances is located on any portion of the Real Estate;
-44-
<PAGE>
(iii) in the course of any activities conducted by any of the
Borrower, its Subsidiaries, the General Partner, and operators of any Real
Estate, no Hazardous Substances have been generated or are being used on
the Real Estate except in accordance with applicable Environmental Laws;
(iv) there have been no releases (i.e. any past or present
releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, disposing, or dumping) or threatened
releases of Hazardous Substances on, upon, into, or from the Real Estate
that would have a material adverse effect on the value of the Real Estate
or the environment;
(v) there have been no releases of Hazardous Substances on,
upon, from, or into any real property in the vicinity of any of the Real
Estate that (A) may have come to be located on the Real Estate through soil
or groundwater contamination, and, (B) if so located, would have a material
adverse effect on the value of the Real Estate or the environment; and
(vi) any Hazardous Substances that have been generated by any of
the Borrower and its Subsidiaries, or on the Real Estate by any other
Person, have been transported offsite only by carriers having an
identification number issued by the EPA, treated or disposed of only by
treatment or disposal facilities maintaining valid Permits as required
under applicable Environmental Laws, which transporters and facilities have
been and are, to the best of the Borrower's knowledge, operating in
compliance with such Permits and applicable Environmental Laws.
6.18. SUBSIDIARIES, ETC. SCHEDULE 6.18 sets forth a list of (a) each
Subsidiary of the Borrower (in which each Restricted Subsidiary at the date
hereof is specifically identified as such), (b) the number of authorized and
outstanding Equity Securities of each class of each Subsidiary of the Borrower
and the number and percentage thereof owned, directly or indirectly, by the
Borrower, and (c) any partnership or joint venture in which the Borrower or any
of its Subsidiaries is engaged with any other Person. The Equity Securities of
each Subsidiary of the Borrower are validly issued, fully paid, and
non-assessable.
6.19. FUNDED DEBT. SCHEDULE 6.19 sets forth as of the Closing Date all
outstanding Funded Debt of the Borrower and its Subsidiaries.
-45-
<PAGE>
6.20. GENERAL. The Borrower's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992, as amended by the Form 10-K/A filed by the
Borrower with respect to such fiscal year, and Quarterly Reports on Form 10-Q
referred to in Section 6.4.1 (a) conform in all material respects to the
requirements of the Securities Exchange Act of 1934, as amended, and to all
applicable rules and regulations of the Securities and Exchange Commission, and
(b) do not contain an untrue statement of any material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they are made, not misleading.
7. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any Bank has any obligation to make any Loans:
7.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or cause
to be paid the principal and interest on the Loans, the commitment fees, the
closing fee, the Agent's fee, and all other amounts provided for in this Credit
Agreement and the other Loan Documents to which the Borrower is party, all in
accordance with the terms of this Credit Agreement and such other Loan
Documents.
7.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief
executive office in New York, New York, or at such other place in the United
States of America as the Borrower shall designate upon prior written notice to
the Agent, where notices, presentations, and demands to or upon the Borrower in
respect of the Loan Documents may be given or made.
7.3. RECORDS AND ACCOUNTS. The Borrower will, and will cause each of its
Subsidiaries to, keep complete and accurate records and books of account.
7.4. FINANCIAL STATEMENTS, CERTIFICATES, AND INFORMATION. The Borrower
will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of the Borrower:
(i) the consolidated balance sheet of the Borrower as at the end
of such fiscal year;
-46-
<PAGE>
(ii) the consolidating balance sheet of the Borrower as at the
end of such fiscal year;
(iii) the consolidated statement of income and consolidated
statement of cash flows of the Borrower for such fiscal year; and
(iv) the consolidating statement of income and consolidating
statement of cash flows of the Borrower for such fiscal year.
Each of the balance sheets and statements delivered under this Section 7.4(a)
shall (i) set forth in comparative form the figures for the previous fiscal
year; (ii) be in reasonable detail and prepared in accordance with generally
accepted accounting principles based on the records and books of account
maintained as provided in Section 7.3; (iii) as to items (i) and (iii) above, be
accompanied by a certification by the principal financial or accounting officer
of the Borrower that the information contained in such financial statements
presents fairly in all material respects the financial position of the Borrower
and the Consolidated Subsidiaries on the date thereof and for the periods
covered thereby; and (iv) as to items (i) and (iii) above, be certified, without
limitation as to scope, by KPMG Peat Marwick or another firm of independent
certified public accountants reasonably satisfactory to the Agent, and shall be
accompanied by a written statement from such accountants to the effect that in
connection with their audit of such financial statements nothing has come to
their attention that caused them to believe that the Borrower has failed to
comply with the terms, covenants, provisions or conditions of Section 7.3,
Section 8, and Section 9 of this Credit Agreement as to accounting matters
(provided that such accountants may also state that the audit was not directed
primarily toward obtaining knowledge of such noncompliance), or, if such
accountants shall have obtained knowledge of any such noncompliance, they shall
disclose in such statement any such noncompliance; PROVIDED that such
accountants shall not be liable to the Banks for failure to obtain knowledge of
any such noncompliance;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of the first three fiscal quarters of each
fiscal year of the Borrower, (i) the unaudited interim condensed consolidated
balance sheet of the Borrower as at the end of such fiscal quarter, and (ii) the
unaudited interim condensed consolidated statement of income and interim
condensed consolidated statement of cash flow of the Borrower for such fiscal
quarter and for the portion of the Borrower's fiscal year
-47-
<PAGE>
then elapsed, all in reasonable detail and prepared in accordance with Rule
10-01 of Regulation S-X of the Securities and Exchange Commission, together with
a certification by the principal financial or accounting officer of the Borrower
that, in the opinion of management of the Borrower, all adjustments necessary
for a fair presentation of (A) the results of operations of the Borrower for the
periods covered thereby, (B) the financial position of the Borrower at the date
thereof, and (C) the cash flows of the Borrower for periods covered thereby have
been made (subject to year-end adjustments);
(c) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by the
principal financial or accounting officer of the Borrower in substantially the
form of EXHIBIT G hereto and setting forth in reasonable detail computations
evidencing compliance with the covenants contained in Section 9 and (if
applicable) reconciliations to reflect changes in generally accepted accounting
principles since the Balance Sheet Date;
(d) promptly after the filing or mailing thereof, copies of all
material of a financial nature filed with the Securities and Exchange Commission
or sent to the holders of the Equity Securities of the Borrower;
(e) from time to time upon request of the Agent (which request shall
not, unless a Default or Event of Default has occurred and is continuing, be
made more than once in any calendar year), projections of the Borrower and its
Subsidiaries updating those projections delivered to the Banks and referred to
in Section 6.4.2 or, if applicable, updating any later such projections
delivered in response to a request pursuant to this Section 7.4(e); and
(f) from time to time such other financial data and information
(including accountants' management letters) as the Agent (having been requested
to do so by any Bank) may reasonably request; PROVIDED, HOWEVER, that each of
the Agent and the Banks agrees that with respect to any data and information
obtained by it as a result of any request pursuant to this clause (f) (and with
respect to any other data and information that is by the terms of this Credit
Agreement to be held subject to this Section 7.4(f)), to the extent that such
data and information has not theretofore otherwise been disclosed in such a
manner as to render such data and information no longer confidential, each of
the Agent and the Banks will use its reasonable efforts (consistent with its
established procedures) to reasonably maintain (and cause its employees and
officers to maintain) the
-48-
<PAGE>
confidential nature of the data and information therein contained; PROVIDED,
HOWEVER, that anything herein contained to the contrary notwithstanding, each of
the Agent and the Banks may, to the extent necessary, disclose or disseminate
such data and information to: (i) its employees, directors, agents, attorneys,
accountants, auditors, and other professional advisers who would ordinarily have
access to such data and information in the normal course of the performance of
their duties in accordance with the Agent's or such Bank's customary procedures
relating to confidential information; (ii) such third parties as it may, in its
discretion, deem reasonably necessary or desirable (A) in connection with or in
response to any Government Mandate or request of any Government Authority, or
(B) in connection with any Proceeding pending (or on its face purported to be
pending) before any Government Authority (including Proceedings involving the
Borrower); (iii) any prospective purchaser, participant or investment banker in
connection with the resale or proposed resale of any portion of the Loans, or of
a participation therein, who shall agree in writing to accept such information
subject to the provisions of this clause (f); (iv) any Person holding the Equity
Securities or Funded Debt of the Agent or such Bank who, subject to the
provisions of this clause (f), shall have requested to inspect such information;
and (v) any Entity utilizing such information to rate or classify the Equity
Securities or Funded Debt of the Agent or such Bank or to report to the public
concerning the industry of which the Agent or such Bank is a part; PROVIDED,
HOWEVER, that none of the Agent and the Banks shall be liable to the Borrower or
any other Person for damages arising hereunder from the disclosure of non-public
information despite its reasonable efforts in accordance with the provisions of
this clause (f) or from a failure by any other party to perform and observe its
covenants in this clause (f).
7.5. NOTICES.
7.5.1. DEFAULTS. The Borrower will promptly after the executive
management of the Borrower (which for purposes of this section shall mean the
chairman of the board, president, chief financial officer, chief accounting
officer, and controller of the Borrower) becomes aware thereof (and in any case
within five (5) days after the executive management becomes aware thereof)
notify the Agent and each of the Banks in writing of the occurrence of any
Default or Event of Default. If any Person shall give any notice in writing of
a claimed default (whether or not constituting an Event of Default) under this
Credit Agreement or any other Contract relating to Funded Debt to which or with
respect to which the Borrower or any of its
-49-
<PAGE>
Subsidiaries is a party or obligor, whether as principal, guarantor, surety, or
otherwise, the Borrower shall forthwith give written notice thereof to the Agent
and each of the Banks, describing the notice or action and the nature of the
claimed default.
7.5.2. ENVIRONMENTAL EVENTS. The Borrower will promptly give notice
to the Agent and each of the Banks (a) of any violation of any Environmental Law
that the Borrower or any of its Subsidiaries reports in writing, or that is
reportable by any such Person in writing (or for which any written report
supplemental to any oral report is made) to any Government Authority, and (b)
upon becoming aware thereof, of any Proceeding, including a notice from any
Government Authority of potential environmental liability, that has the
potential, in the Borrower's reasonable judgement, to have a Material Effect.
7.5.3. NOTICE OF PROCEEDINGS AND JUDGMENTS. The Borrower will, and
will cause each of its Subsidiaries to, give notice to the Agent and each of the
Banks in writing within thirty (30) days of becoming aware of any Proceedings
pending or threatened in writing affecting the Borrower or any of its
Subsidiaries or to which the Borrower or any of its Subsidiaries is or becomes a
party that could reasonably be expected by the Borrower to have a Material
Effect (or of any material change in any such Proceedings of which the Borrower
has previously given notice). Any such notice will state the nature and status
of such Proceedings. The Borrower will, and will cause each of its Subsidiaries
to, give notice to the Agent and each of the Banks, in writing, in form and
detail satisfactory to the Agent, within fifteen (15) days of any judgment not
covered by insurance, final or otherwise, against the Borrower or any of its
Subsidiaries in an amount in excess of $5,000,000.
7.5.4. NOTICE OF CHANGE OF CONTROL. In the event the Borrower
obtains knowledge of a Change of Control or an impending Change of Control, the
Borrower will promptly give written notice (a "BORROWER CONTROL CHANGE NOTICE")
of such fact to the Agent and the Banks at least forty (40) days prior to the
proposed Change of Control Date; PROVIDED, HOWEVER, that in no event shall such
a Borrower Control Change Notice be delivered to the Agent and the Banks more
than three (3) Business Days after the Change of Control Date. Without limiting
the foregoing, upon obtaining actual knowledge of any Change of Control or
impending Change of Control, any of the Agent and the Banks may (but in no case
shall any of them be obligated to) deliver written notice to the Borrower of
such event, indicating that such event requires the Borrower to prepay the Loans
pursuant to either
-50-
<PAGE>
Section 3.2.2 or Section 4.3.2, as applicable (and in any such notice a Bank may
make demand for payment of its Loans under either Section 3.2.2 or Section
4.3.2, as applicable). Promptly upon receipt of such notice, but in no event
later than five (5) Business Days after actual receipt thereof, the Borrower
will give written notice (such notice, together with a Borrower Control Change
Notice, a "CONTROL CHANGE NOTICE") of such fact to the Agent and the Banks
(including the Bank that has so notified the Borrower). Any Control Change
Notice shall (a) describe the principal facts and circumstances of such Change
of Control known to the Borrower in reasonable detail (including the Change of
Control Date or, if the Borrower does not have knowledge of the Change of
Control Date, the Borrower's best estimate of such Change of Control Date), (b)
make reference to either Section 3.2.2 or Section 4.3.2, as applicable, and the
rights of the Banks to require the Borrower to prepay the Loans on the terms and
conditions provided for therein, and (c) state that each Bank may make a demand
for payment of its Loans by providing written notice to the Borrower within
fifteen (15) days after the effective date of such Control Change Notice. In
the event the Borrower shall not have designated the Change of Control Date in
its Control Change Notice, the Borrower shall keep the Agent and the Banks
informed as to any changes in the estimated Change of Control Date and shall
provide written notice to the Agent and the Banks specifying the Change of
Control Date promptly upon obtaining knowledge thereof.
7.6. EXISTENCE; BUSINESS; PROPERTIES.
7.6.1. LEGAL EXISTENCE. The Borrower will, and will cause each of
its Consolidated Subsidiaries to, do or cause to be done all things necessary to
preserve and keep in full force and effect its existence, rights and franchises
as a corporation or limited partnership, as the case may be, except, with
respect to rights and franchises, where the failure to preserve and keep in full
force and effect such rights and franchises would not be likely to have a
Material Effect, PROVIDED, HOWEVER, this section shall not prohibit any merger,
consolidation, or reorganization of the Borrower or any of its Subsidiaries
permitted pursuant to Section 8.2.
7.6.2. CONDUCT OF BUSINESS. The Borrower will, and will cause each
of its Consolidated Subsidiaries to, engage in a diversified investment
management business substantially of the nature described in the Borrower's Form
10-K for the year ended December 31, 1992, as the nature of such business has
been or will be modified and expanded by the Specified Acquisitions and the
Borrower's acquisition of the business of Equitable Capital Management
Corporation.
-51-
<PAGE>
7.6.3. MAINTENANCE OF PROPERTIES. The Borrower will, and will cause
each of its Consolidated Subsidiaries to, cause its properties used or useful in
the conduct of its business and which are material to the Business of the
Borrower and its Consolidated Subsidiaries taken as a whole to be maintained and
kept in good condition, repair, and working order and supplied with all
necessary equipment, ordinary wear and tear excepted; PROVIDED that nothing in
this Section 7.6.3 shall prevent the Borrower or any of its Consolidated
Subsidiaries from discontinuing the operation and maintenance of any properties
if such discontinuance (i) is, in the judgment of the Borrower or such
Subsidiary, desirable in the conduct of its business, and (ii) does not have a
Material Effect.
7.6.4. STATUS UNDER SECURITIES LAWS. The Borrower shall maintain its
status as a registered "investment adviser" under (a) the Investment Advisers
Act of 1940 and (b) under the laws of each state in which such registration is
required in connection with the investment advisory business of the Borrower
and, as to (b) only, where a failure to obtain such registration would be likely
to have a Material Effect. The Borrower shall cause Alliance Distributors to
maintain its status as a registered "broker/dealer" under the Securities
Exchange Act of 1934 and under the laws of each state in which such registration
is required in connection with the business of Alliance Distributors and where a
failure to obtain such registration would be likely to have a Material Effect,
and to maintain its membership in the National Association of Securities
Dealers, Inc.
7.7. INSURANCE. The Borrower will, and will cause each of its
Consolidated Subsidiaries to, maintain with financially sound and reputable
insurers insurance with respect to its properties and business against such
casualties and contingencies, in such amounts, containing such terms, in such
forms, and for such periods, or shall be self-insured in respect of such risks
(with appropriate reserves to the extent required by generally accepted
accounting principles), as shall be customary in the industry for companies
engaged in similar activities in similar geographic areas.
7.8. TAXES. The Borrower will, and will cause each of its Consolidated
Subsidiaries to, duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments, and other
governmental charges imposed upon it or its real property, sales, and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for
-52-
<PAGE>
labor, materials, or supplies that if unpaid (a) might by law become a Lien upon
any of its property and (b) would be reasonably likely to result in a Material
Effect; PROVIDED that any such tax, assessment, charge, levy, or claim need not
be paid if the validity or amount thereof shall currently be contested in good
faith by appropriate Proceedings and if the Borrower or such Subsidiary shall
have set aside on its books, if and to the extent permitted by generally
accepted accounting principles, adequate accruals with respect thereto.
7.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
7.9.1. GENERAL. The Borrower shall, and shall cause each of its
Subsidiaries to, permit the Banks, through the Agent or any of the Banks' other
designated representatives, to visit and inspect any of the properties of the
Borrower or any of its Subsidiaries, to examine the books of account of the
Borrower and its Subsidiaries (and to make copies thereof and extracts
therefrom), and to discuss the affairs, finances, and accounts of the Borrower
and its Subsidiaries with, and to be advised as to the same by, its and their
officers, all at such reasonable times and intervals as the Agent or any Bank
may request. The costs incurred by the Agent and the Banks in connection with
any such inspection shall be borne by the Banks making or requesting the
inspection (or, if the Agent makes an inspection on its own initiative, by the
Banks jointly, on a PRO RATA basis according to their outstanding Loans or, if
no Loans are outstanding, their respective Commitments), except as otherwise
provided by Section 15(f). Any data and information that is obtained by the
Agent or any Bank pursuant to this Section 7.9.1 shall be held subject to
Section 7.4(f).
7.9.2. COMMUNICATION WITH ACCOUNTANTS. The Borrower authorizes the
Agent and, if accompanied by the Agent, the Banks to communicate directly with
the Borrower's independent certified public accountants and authorizes such
accountants to disclose to the Agent and the Banks any and all financial
statements and other supporting financial documents and schedules, including
copies of any management letter with respect to the Business of the Borrower or
any of its Subsidiaries. The Borrower shall be entitled to reasonable prior
notice of any such meeting with its independent certified public accountants and
shall have the opportunity to have its representatives present at any such
meeting. At the request of the Agent, the Borrower shall deliver a letter
addressed to such accountants instructing them to comply with the provisions of
this 7.9.2. Any data and information that is obtained by the Agent or any Bank
pursuant to this Section 7.9.2 shall be held subject to Section 7.4(f).
-53-
<PAGE>
7.10. COMPLIANCE WITH GOVERNMENT MANDATES, CONTRACTS, AND PERMITS. The
Borrower will, and will cause each of its Consolidated Subsidiaries to, comply
(if and to the extent that a failure to comply would be likely to have a
Material Effect) with (a) all applicable Government Mandates wherever the
business of the Borrower or any such Subsidiary is conducted, including all
Environmental Laws and all Government Mandates relating to occupational safety
and employment matters; (b) the provisions of the certificate of incorporation
and by-laws or the agreement of limited partnership and certificate of limited
partnership, as the case may be, of the Borrower and such Subsidiary; (c) all
Contracts to which the Borrower or any such Subsidiary is party, by which the
Borrower or any such Subsidiary is or may be bound, or to which any of their
respective properties are or may be subject; and (d) the terms and conditions of
any Permit used in the Business of the Borrower or any such Subsidiary. If any
Permit shall become necessary or required in order that the Borrower may fulfill
any of its obligations hereunder or under any of the other Loan Documents to
which the Borrower is a party, the Borrower will immediately take or cause its
Subsidiaries to take all reasonable steps within the power of the Borrower and
its Subsidiaries to obtain and maintain in full force and effect such Permit and
furnish the Agent and the Banks with evidence thereof.
7.11. USE OF PROCEEDS. The Borrower will use the proceeds of the Loans
solely (a) to finance the Specified Acquisitions, (b) to finance Permitted
Acquisitions, (c) to finance the payment by the Borrower of certain commissions
to brokers in connection with the sale of "B" shares of investment companies or
mutual funds managed or advised by the Borrower or one of its Subsidiaries, and
(d) for working capital and general corporate purposes of the Borrower and its
Subsidiaries.
7.12. RESTRICTED SUBSIDIARIES. The Borrower shall cause each Restricted
Subsidiary to continue at all times to satisfy the qualifications of a
Restricted Subsidiary as set forth in the definition of "Restricted Subsidiary"
in Section 1.1.
7.13. CERTAIN CHANGES IN ACCOUNTING PRINCIPLES. In the event of a change
after the date of this Credit Agreement in (a) generally accepted accounting
principles (as in effect from time to time, rather than as defined in Section
1.1) or (b) any regulation issued by the Securities and Exchange Commission
(either such event being referred to herein as an "ACCOUNTING CHANGE"), that
results in a material change in the calculations as to compliance with any
financial covenant contained in Section 9 or in the calculation
-54-
<PAGE>
of any item to be taken into account in the calculations as to compliance with
any such covenant (the "AFFECTED COMPUTATION") in such a manner and to such an
extent that, in the good faith judgment of the Chief Financial Officer of the
Borrower or the Majority Banks, as evidenced by notice from such Majority Banks
to the Borrower and the Agent (the "ACCOUNTING NOTICE"), the application of the
Accounting Change to the Affected Computation would no longer reflect the
intention of the parties to this Credit Agreement, then and in any such event:
(a) the Borrower shall, promptly after either a determination by its
Chief Financial Officer as provided above or receipt of an Accounting Notice,
give written notice thereof to the Agent and each Bank, which notice shall be
accompanied by a copy of any Accounting Notice and a certificate of the Chief
Financial Officer of the Borrower:
(i) describing the Accounting Change in question and the
particular covenant or covenants that will be affected by such Accounting
Change;
(ii) setting forth in reasonable detail (including detailed
calculations) the manner and extent to which the covenant or covenants
listed in such certificate are affected by such Accounting Change; and
(iii) setting forth in reasonable detail (including detailed
calculations) the information required in order to establish that the
Borrower would be in compliance with the requirements of the covenant or
covenants listed in such certificate if such Accounting Change was not
effective (or, if the Borrower would not be so in compliance, setting forth
in reasonable detail calculations of the extent of such non-compliance);
(b) the Borrower and the Banks will enter into good faith
negotiations with each other for an equitable amendment of such covenant or
covenants, and the definition of generally accepted accounting principles set
forth in Section 1.1, pursuant to Section 25 so as to place the parties, insofar
as possible, in the same relative position as if such Accounting Change had not
occurred;
(c) for the period from the date on which such Accounting Change
becomes effective (the "EFFECTIVE DATE") to the effective date of an amendment
to this Credit Agreement pursuant to Section 25, the Borrower shall be deemed to
be in compliance with the covenant or covenants listed in
-55-
<PAGE>
such certificate if and so long as (but only if and so long as) the Borrower
would be in compliance with such covenant or covenants if such Accounting Change
had not occurred; and
(d) if no amendment to this Credit Agreement has become effective
within ninety (90) days after the Effective Date of such Accounting Change, then
all accounting computations required to be made for purposes of this Credit
Agreement thereafter shall be made in accordance with generally accepted
accounting principles as in effect immediately prior to such Effective Date.
8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any Bank has any obligation to make any Loans:
8.1. DISPOSITION OF ASSETS. The Borrower will not, and will not cause,
permit, or suffer any of its Consolidated Subsidiaries to, in any single
transaction or in multiple transactions within any fiscal year of the Borrower,
sell, transfer, assign, or otherwise dispose of all of the business or assets of
the Borrower and the Consolidated Subsidiaries, any Significant Assets, or any
12b-1 Fees, or enter into any Contract for any such sale, transfer, assignment,
or disposition, PROVIDED, HOWEVER:
(a) Subsidiaries of the Borrower may sell, transfer, assign, or
dispose of assets (including 12b-1 Fees) to the Borrower;
(b) Subsidiaries of the Borrower may sell, transfer, assign, or
dispose of assets (including 12b-1 Fees) to any Restricted Subsidiary;
(c) the Borrower may sell, transfer, assign, or dispose of assets
(including 12b-1 Fees) to any Restricted Subsidiary, PROVIDED such Restricted
Subsidiary shall have prior to the effective date of such sale, transfer,
assignment, or disposition executed and delivered to the Agent an Assumption
Agreement (and all of the conditions set forth in such Assumption Agreement
shall have been satisfied and such Assumption Agreement (i) shall not be subject
to any default or event of default with respect to any party, (ii) shall not be
subject to any notice of termination given or received by the Borrower or any of
its Subsidiaries, and (iii) shall be the legal, valid, and binding obligation of
each party thereto enforceable against such party according to its terms);
-56-
<PAGE>
(d) the Borrower and any Subsidiary of the Borrower may sell,
transfer, assign, or dispose of 12b-1 Fees to Persons other than the Borrower
and Restricted Subsidiaries, PROVIDED either:
(i) such sale, transfer, assignment, or disposition relates
solely to 12b-1 Fees (A) with respect to mutual fund shares sold on or
after the date of sale, transfer, assignment, or disposition of such 12b-1
Fees (I.E., the deferred asset pertaining to the underlying mutual fund
shares does not appear on the Borrower's consolidated balance sheet, except
for interim periods for purposes of administrative convenience or to
establish pooling at reasonable intervals) and (B) with respect to which
the related commissions are financed by the transferee of the 12b-1 Fees
either without recourse (which for purposes of this section shall not
include liability for breaches of standard seller's representations made in
connection with such a sale that do not, expressly or in effect, constitute
a guarantee of the 12b-1 Fees sold) to the Borrower or any of its
Subsidiaries or with recourse to the Borrower and its Subsidiaries limited
to a specific Dollar amount such that the liabilities of the Borrower and
its Subsidiaries in respect of such recourse are permitted under clause
(ix) or clause (x) of Section 8.4 and do not result in a breach by the
Borrower of Section 8.7 or Section 9.3; or
(ii) the amount of 12b-1 Fees sold, transferred, assigned, or
disposed of to Persons other than the Borrower and Restricted Subsidiaries
(other than as permitted in clause (i) above) during any fiscal year of the
Borrower does not exceed twenty-five percent (25%) of the deferred assets
pertaining to 12b-1 Fees reflected in the consolidated balance sheet of the
Borrower and the Consolidated Subsidiaries as at the end of the fiscal year
of the Borrower most recently ended, PROVIDED such sale, transfer,
assignment, or disposition is either (A) without recourse to the Borrower
or any Subsidiary of the Borrower, or (B) with recourse to the Borrower and
its Subsidiaries limited to a specific Dollar amount such that the
liabilities of the Borrower and its Subsidiaries in respect of such
recourse are permitted under clause (ix) or clause (x) of Section 8.4 and
do not result in a breach by the Borrower of Section 8.7 or Section 9.3.
Any Indebtedness in respect of obligations of the Borrower and its Subsidiaries
with recourse limited to a specific dollar amount referred to in Section 8.1(d)
shall constitute "Funded Debt" as defined in Section 1.1.
-57-
<PAGE>
8.2. MERGERS AND REORGANIZATIONS. The Borrower will not, and will not
cause, permit, or suffer any of its Consolidated Subsidiaries to, become a party
to any merger, consolidation, or reorganization (any such transaction, a
"REORGANIZATION" and the term "REORGANIZE" shall have a correlative meaning) or
enter into any Contract providing for any Reorganization, PROVIDED, HOWEVER:
(a) the Borrower may Reorganize solely with any Restricted
Subsidiary, and any Restricted Subsidiary may Reorganize solely with the
Borrower or any other Restricted Subsidiary, PROVIDED (i) if the Borrower is
party to such Reorganization, it is the sole surviving Entity, and (ii) if a
Restricted Subsidiary that has previously executed and delivered to the Agent an
Assumption Agreement is party to such Reorganization, each Entity (other than
the Borrower or a Restricted Subsidiary that has previously executed and
delivered to the Agent an Assumption Agreement) surviving such Reorganization
shall execute and deliver to the Agent an Assumption Agreement (and all of the
conditions set forth in such Assumption Agreement shall have been satisfied and
such Assumption Agreement (i) shall not be subject to any default or event of
default with respect to any party, (ii) shall not be subject to any notice of
termination given or received by the Borrower or any of its Subsidiaries, and
(iii) shall be the legal, valid, and binding obligation of each party thereto
enforceable against such party according to its terms);
(b) the Borrower may Reorganize with other Entities in connection
with any Permitted Acquisition, PROVIDED (i) the Borrower is the sole surviving
Entity of such Reorganization; (ii) no Default or Event of Default, or breach by
the Borrower of any of its covenants in the Loan Documents, shall have occurred
and be continuing at the time of such Reorganization; (iii) no Default or Event
of Default, or breach by the Borrower of any of its covenants in the Loan
Documents, shall occur as a result of, or after giving effect to, such
Reorganization; and (iv) such Reorganization does not result in a Change of
Control; and
(c) the Borrower may Reorganize with any other Entity (including
Reorganizations in connection with a conversion of the Borrower to corporate
form and other transactions permitted under Section 2.6 of the Borrower
Partnership Agreement), PROVIDED:
(i) no Default or Event of Default, or breach by the Borrower of
any of its covenants in the Loan Documents, shall have occurred and be
continuing at the time of such Reorganization;
-58-
<PAGE>
(ii) no Default or Event of Default, or breach by the Borrower of
any of its covenants in the Loan Documents, shall occur as a result of, or
after giving effect to, such Reorganization;
(iii) each surviving Entity (other than the Borrower if it
survives), and each Person that in connection with such Reorganization
acquires or succeeds to any of the business or assets of the Borrower
(other than Persons that in the aggregate acquire or succeed to assets
generating less than five percent (5%) of the consolidated revenues of the
Borrower and the Consolidated Subsidiaries during the fiscal year of the
Borrower most recently ended), shall, as a condition of the effectiveness
of such Reorganization, execute and deliver to the Agent an Assumption
Agreement (and all of the conditions set forth in such Assumption Agreement
shall have been satisfied and such Assumption Agreement (i) shall not be
subject to any default or event of default with respect to any party, (ii)
shall not be subject to any notice of termination given or received by the
Borrower or any of its Subsidiaries, and (iii) shall be the legal, valid,
and binding obligation of each party thereto enforceable against such party
according to its terms);
(iv) such Reorganization does not result in a Change of Control;
(v) after giving effect to such Reorganization, investment
management contracts with respect to at least eighty percent (80%) of the
assets under management by the Borrower and the Consolidated Subsidiaries
immediately prior to such Reorganization (A) shall remain in full force and
effect, and (B) shall, if held by the Borrower and/or one or more of
the Consolidated Subsidiaries prior to such Reorganization, be held by the
Borrower or shall have been duly assigned to Persons executing and
delivering to the Agent Assumption Agreements and/or one or more of its
consolidated Subsidiaries as provided in clause (iii) above; and
(vi) any diminution in the aggregate net worth of the Borrower
(if it survives) and any Persons executing and delivering to the Agent
Assumption Agreements as provided in clause (iii) above and the
consolidated Subsidiaries of each thereof (after elimination of
intercompany items and without double
-59-
<PAGE>
counting), when compared with the Consolidated Net Worth of the Borrower as
of the date of the most recently completed fiscal quarter immediately prior
to such Reorganization, is not more than five percent (5%) of such
Consolidated Net Worth.
8.3. ACQUISITIONS. The Borrower will not, and will not cause, permit, or
suffer any of its Subsidiaries to, become a party to, contract for, or effect
any purchase, exchange, or acquisition of Equity Securities or assets (any such
transaction, an "ACQUISITION"), other than an Acquisition of assets that do not
constitute all or a material part of a business, PROVIDED, HOWEVER, the Borrower
or any of its Subsidiaries may become a party to, contract for, or effect an
Acquisition if each of the following conditions are satisfied:
(a) no Default or Event of Default, or breach by the Borrower of any
of its covenants in the Loan Documents, shall have occurred and be continuing at
the time of such Acquisition;
(b) no Default or Event of Default, or breach by the Borrower of any
of its covenants in the Loan Documents, shall occur as a result of, or after
giving effect to, such Acquisition;
(c) such Acquisition relates solely to (i) Equity Securities in
another Person engaged primarily in, or assets of another Person used primarily
for, a business of the same general type as the business of the Borrower and its
Subsidiaries described in the Borrower's Form 10-K for the year ended December
31, 1992, as the nature of such business has been or will be modified and
expanded by the Specified Acquisitions and the Borrower's acquisition of the
business of Equitable Capital Management Corporation, (ii) goods or services
that will be used in the business of the Borrower or any of its Subsidiaries, or
(iii) additional Equity Securities issued by an Entity, the Equity Securities of
which have previously been purchased by the Borrower or one of its Subsidiaries
under this Section 8.3;
(d) if such Acquisition relates to Equity Securities of another
Entity, after giving effect to such Acquisition, at least a majority of the
Equity Securities, and at least a majority of the Voting Equity Securities, of
such Entity are held directly by the Borrower or indirectly by the Borrower
through one or more Restricted Subsidiaries (but not through any Subsidiary that
is not a Restricted Subsidiary);
-60-
<PAGE>
(e) any Entity that issued Equity Securities purchased in such
Acquisition and any Entity through which the Borrower effected an Acquisition of
Equity Securities or assets, becomes, upon the consummation of the Acquisition,
a Consolidated Subsidiary subject to the terms and conditions of this Credit
Agreement; and
(f) except as permitted by Section 8.6, any Entity that issued Equity
Securities purchased in such Acquisition and any Entity through which the
Borrower effected an Acquisition of Equity Securities or assets is not upon
consummation of such Acquisition (and the Borrower will not thereafter cause,
permit, or suffer any such Entity to become) a general partner in any
partnership, a party to a joint venture, or subject to any contingent
obligations established by Contract that are not by their terms limited to a
specific dollar amount.
8.4. RESTRICTIONS ON LIENS. The Borrower will not, and will not cause,
permit, or suffer any of its Consolidated Subsidiaries to, (a) create or incur,
or cause, permit, or suffer to be created or incurred or to exist, any Lien upon
any of its property or assets of any character whether now owned or hereafter
acquired, or upon the income or profits therefrom; (b) transfer any of such
property or assets or the income or profits therefrom for the purpose of
subjecting the same to the payment of Indebtedness or performance of any other
obligation in priority to payment of its general creditors; (c) acquire, or
agree or have an option to acquire, any property or assets upon conditional sale
or other title retention or purchase money security agreement, device, or
arrangement; (d) suffer to exist any Indebtedness or claim or demand for a
period of time such that the same by Government Mandate or upon bankruptcy or
insolvency, or otherwise, would be given any priority whatsoever over its
general creditors; or (e) assign, pledge, or otherwise transfer any accounts,
contract rights, general intangibles, chattel paper, or instruments, with or
without recourse, other than a transfer or assignment in connection with a sale
permitted under Section 8.1 or an Investment permitted under Section 8.6;
PROVIDED that the Borrower and any Subsidiary of the Borrower may create or
incur, or cause, permit, or suffer to be created or incurred or to exist:
(i) Liens imposed by Government Mandate to secure taxes,
assessments, and other government charges in respect of obligations not
overdue;
-61-
<PAGE>
(ii) statutory Liens of carriers, warehousemen, mechanics,
suppliers, laborers, and materialmen, and other like Liens, in each case in
respect of obligations not overdue;
(iii) pledges or deposits made in connection with, or to secure
payment of, workers' compensation, unemployment insurance, old age
pensions, or other social security obligations;
(iv) Liens on Real Estate consisting of easements, rights of way,
zoning restrictions, restrictions on the use of real property, defects and
irregularities in the title thereto, and other minor Liens, PROVIDED, (A)
none of such Liens in the reasonable opinion of the Borrower interferes
materially with the use of the affected property in the ordinary conduct of
the business of the Borrower and its Subsidiaries, and (B) such Liens
individually or in the aggregate do not have a Material Effect;
(v) the rights and interests of landlords and lessors under
leases of Real Estate leased by the Borrower or one of its Subsidiaries, as
lessee;
(vi) presently outstanding Liens listed on SCHEDULE 8.4;
(vii) Liens in favor of either the Borrower or a Restricted
Subsidiary on all or part of the assets of any Subsidiary of the Borrower
securing Indebtedness owing by such Subsidiary to the Borrower or such
Restricted Subsidiary, as the case may be;
(viii) Liens on interests of the Borrower or its Subsidiaries in
partnerships or joint ventures consisting of binding rights of first
refusal, rights of first offer, take-me-along rights, third-party offer
provisions, buy-sell provisions, other transfer restrictions and conditions
relating to such partnership or joint venture interests, and Liens granted
to other participants in such partnership or joint venture as security for
the performance by the Borrower or its Subsidiaries of their obligations in
respect of such partnership or joint venture;
(ix) UCC notice filings in connection with non-recourse sales of
12b-1 Fees (other than sales constituting a collateral security device);
and
-62-
<PAGE>
(x) Liens (in addition to those specified in clauses (i) through
(ix) above) securing Indebtedness in an aggregate amount for the Borrower
and all of its Consolidated Subsidiaries taken together not in excess of
$10,000,000 outstanding at any point in time.
8.5. GUARANTIES. The Borrower shall not, and shall not cause, permit, or
suffer any of its Consolidated Subsidiaries to, either (a) guaranty, endorse,
accept, act as surety for, or otherwise become liable in respect of,
Indebtedness of (or undertake to maintain working capital or other balance sheet
condition of, or otherwise to advance or make funds available for the purchase
of Indebtedness of) other Persons unless such obligation of the Borrower or its
Subsidiary is expressly limited by the instrument establishing the same to a
specified amount, or (b) voluntarily incur, create, assume, or otherwise become
liable for any contingent obligations that are not by their terms limited to a
specific dollar amount. This Section 8.5 shall not apply to (a) contingent
obligations of a Subsidiary of the Borrower that is not a Restricted Subsidiary
in its capacity as general partner of a partnership, or (b) guaranties by the
Borrower or any Consolidated Subsidiary of obligations of Restricted
Subsidiaries (other than obligations in respect of Funded Debt) incurred in the
ordinary course of business.
8.6. RESTRICTIONS ON INVESTMENTS. The Borrower will not, and will not
cause, permit, or suffer any of its Consolidated Subsidiaries to, make or permit
to exist or to remain outstanding any Investment except:
(a) Investments in marketable securities, liquid investments, and
other financial instruments that are acquired for investment purposes and that
have a value that may be readily established, including any such Investment that
may be readily sold or otherwise liquidated in any mutual fund for which the
Borrower or one of its Subsidiaries serves as investment manager or adviser;
(b) Investments consisting of seed money contributions to open-end
and closed-end investment companies for which the Borrower or one of its
Subsidiaries serves as investment manager or adviser, PROVIDED in each case the
amount of such Investment will not exceed the minimum seed money contribution
required by the 1940 Act or other applicable law, regulation, or custom
(provided that when seed money contributions are made pursuant to "custom", in
no event shall the amount contributed to any single investment company exceed
$1,000,000);
-63-
<PAGE>
(c) Investments existing on the Closing Date and set forth on
SCHEDULE 8.6;
(d) Investments made by the Borrower or any Restricted Subsidiary in
the Borrower or any Restricted Subsidiary;
(e) Investments made after the Closing Date in Consolidated
Subsidiaries that act as general partner of one or more partnerships in an
aggregate amount not to exceed $20,000,000 at any point in time;
(f) Investments consisting of inter-company advances made in the
ordinary course of business by the Borrower or any Subsidiary to any
Consolidated Subsidiary, provided each such advance is settled within ninety
(90) days after it is made (for purposes of this section, settlement shall mean
repayment of an advance in full in cash and without renewal of such advance, and
without a substitute advance from the Borrower or another Subsidiary, for at
least twenty-four (24) hours after such cash payment); and
(g) Investments (in addition to those specified in clauses (a)
through (f) above) in an aggregate amount for the Borrower and all of its
Subsidiaries taken together not in excess of $60,000,000 outstanding at any
point in time.
Notwithstanding any provisions to the contrary in the definition of
"Investments" in Section 1.1, the Dollar amount of any Investment for purposes
of clauses (e) and (g) above shall be reduced by the amount of any dividend,
interest, or other return in respect of such Investment that is actually
received in cash by the Borrower or a Restricted Subsidiary.
8.7. RESTRICTIONS ON FUNDED DEBT. The Borrower will not cause, permit, or
suffer any of the Consolidated Subsidiaries to, create, incur, assume,
guarantee, or be or remain liable, contingently or otherwise, with respect to
any Funded Debt, provided, however, that (a) this section shall not apply to
Funded Debt owing solely to the Borrower or another Consolidated Subsidiary of
the Borrower, and (b) Consolidated Subsidiaries of the Borrower other than
Alliance Capital Management Corporation of Delaware and Alliance Distributors
may, subject to the other terms and conditions of the Loan Documents, create,
incur, assume, guarantee, or be or remain liable with respect to Funded Debt in
an aggregate principal amount (for all such Subsidiaries) that does not exceed
seven and five tenths
-64-
<PAGE>
percent (7.5%) of the Borrower's Consolidated Net Worth as set forth in the most
recent available annual or quarterly report of the Borrower.
8.8. DISTRIBUTIONS. The Borrower shall not cause, permit, or suffer any
restriction or Lien on the ability of any Consolidated Subsidiary to (a) pay,
directly or indirectly, any Distributions to the Borrower or any other
Subsidiary of the Borrower, (b) make any payments, directly or indirectly, in
respect of any Indebtedness or other obligation owed to the Borrower or any of
its Subsidiaries, (c) make loans or advances to the Borrower or any other
Subsidiary of the Borrower, or (d) sell, transfer, assign, or otherwise dispose
of any property or assets to the Borrower or any other Subsidiary of the
Borrower, except, in each such case, restrictions or Liens (aa) that exist under
or by reason of applicable Government Mandates, including any net capital rules,
(bb) that are imposed only, as to Indebtedness of the Borrower or any
Consolidated Subsidiary incurred prior to the date hereof, upon a failure to pay
when due any of such Indebtedness, or, as to Indebtedness of the Borrower or any
Consolidated Subsidiary incurred on or after the date hereof, upon an
acceleration of such Indebtedness or a failure to pay the full amount of such
Indebtedness at maturity, or (cc) that arise by reason of the maintenance by any
Subsidiary that is not a Restricted Subsidiary of a level of net worth for the
purpose of ensuring that limited partnerships for which it serves as general
partner will be treated as partnerships for federal income tax purposes.
Notwithstanding the foregoing, any portion of net earnings of any Restricted
Subsidiary that are unavailable for payment of dividends to the Borrower or any
other Restricted Subsidiary by reason of a restriction or Lien permitted under
any of clauses (aa), (bb), and (cc) shall be excluded from the calculation of
Consolidated Net Income (or Loss).
8.9. TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will not
cause, permit, or suffer any of its Subsidiaries to, directly or indirectly,
enter into any Contract or other transaction with any Affiliate of the Borrower
or any of its Subsidiaries that is material to the Borrower and the Consolidated
Subsidiaries taken as a whole, unless either: (a) such Contract or transaction
relates solely to compensation arrangements with directors, officers, or
employees of the Borrower, the General Partner, or the Consolidated
Subsidiaries, or (b) such transaction is in the ordinary course of business and
is, taking into account the totality of the relationships involved, on fair and
reasonable terms no less favorable to the Borrower and
-65-
<PAGE>
the Consolidated Subsidiaries taken as a whole than would be obtained in
comparable arm's length transactions with Persons that are not Affiliates.
8.10. FISCAL YEAR. The Borrower shall not change its fiscal year unless
the parties to the Loan Documents shall first enter into amendments to the Loan
Documents such that the rights of the parties to the Loan Documents will not be
affected by the change in the fiscal year of the Borrower, and the parties shall
enter into such amendments as may be required in connection with a change of the
Borrower's fiscal year.
8.11. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will not, and will
not cause, permit, or suffer any of its Subsidiaries to, (a) use any of the Real
Estate or any portion thereof for the handling, processing, storage, or disposal
of Hazardous Substances, (b) cause, permit, or suffer to be located on any of
the Real Estate any underground tank or other underground storage receptacle for
Hazardous Substances, (c) generate any Hazardous Substances on any of the Real
Estate, (d) conduct any activity at any Real Estate or use any Real Estate in
any manner so as to cause a release (i.e., releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing, or dumping) or threatened release of Hazardous Substances
on, upon, or into the Real Estate, or (e) otherwise conduct any activity at any
Real Estate or use any Real Estate in any manner that would violate any
Environmental Law or bring such Real Estate in violation of any Environmental
Law, in each case, so as would be likely to have a Material Effect.
8.12. EMPLOYEE BENEFIT PLANS. The Borrower will not, and will not cause,
permit, or suffer any ERISA Affiliate to:
(a) engage in any "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the Code that could result in a material
liability for the Borrower and its Consolidated Subsidiaries taken as a whole;
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in Section 302 of ERISA, whether or
not such deficiency is or may be waived;
(c) fail to contribute to any Guaranteed Pension Plan to an extent
that, or terminate any Guaranteed Pension Plan in a manner that, could result in
the imposition of a Lien on the assets of the Borrower or any of its
Subsidiaries pursuant to Section 302(f) or Section 4068 of ERISA; or
-66-
<PAGE>
(d) permit or take any action that would result in the aggregate
benefit liabilities (within the meaning of Section 4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of such
Plans, disregarding for this purpose the benefit liabilities and assets of any
such Plan with assets in excess of benefit liabilities.
8.13. AMENDMENTS TO CERTAIN DOCUMENTS. The Borrower shall not, without
the prior written consent of the Agent in each instance, permit or suffer any
material amendments, modifications, supplements, or restatements of (a) its
certificate of limited partnership or the Borrower Partnership Agreement (or,
following any conversion of the Borrower to a corporation, its certificate of
incorporation or by-laws) that (i) relate to the determination of Available Cash
Flow or Operating Cash Flow under the Borrower Partnership Agreement, or (ii)
could reasonably be expected to materially adversely affect the ability of the
Borrower to perform and observe its obligations under the Loan Documents or the
legal rights and remedies of the Banks and the Agent under any of the Loan
Documents, or (b) except as provided in clauses (I) and (II) of the proviso at
the end of the definition of "Change of Control" in Section 1.1, the Note
Agreements that would alter the rights of the holders of the Indebtedness under
the Note Agreements in respect of a Change of Control, PROVIDED, HOWEVER, the
Agent will not unreasonably withhold its consent to any such amendments,
modifications, supplements, or restatements of the Note Agreements so long as
the Borrower executes and delivers to the Agent an amendment to this Credit
Agreement, in form and substance reasonably satisfactory to the Agent, that
would, MUTATIS MUTANDIS, effect the same changes in the rights of the Banks in
respect of a Change of Control as would, upon the effectiveness of such change
in the Note Agreements, be effected in the rights of the holders of the
Indebtedness under the Note Agreements (with such amendment to the Credit
Agreement to be effective as of the effectiveness of such amendment,
modification, supplement, or restatement of the Note Agreements). The Borrower
shall provide the Agent and each Bank with a copy of any amendments,
modifications, supplements, or restatements of its certificate of limited
partnership, the Borrower Partnership Agreement (or, following any conversion of
the Borrower to a corporation, its certificate of incorporation or by-laws), or
the Note Agreements promptly after the effective date thereof (regardless, with
respect to the Note Agreements, of whether such amendments, modifications,
supplements, or restatements are provided for in clauses (I) and (II) of the
proviso at the end of the definition of "Change of Control" in Section 1.1).
-67-
<PAGE>
9. FINANCIAL COVENANTS OF THE BORROWER.
9.1. OPERATING COVERAGE RATIO.
(a) The Borrower will not permit the ratio of Consolidated Adjusted
Cash Flow to Consolidated Fixed Charges (i) at March 31, 1994 for the fiscal
quarter of the Borrower then ended, (ii) at June 30, 1994 for the two
consecutive fiscal quarters of the Borrower then ended, (iii) at September 30,
1994 for the three consecutive fiscal quarters of the Borrower then ended, and
(iv) at the end of each fiscal quarter of the Borrower thereafter for the four
consecutive fiscal quarters then ended, to be less than 1.25:1.
(b) Consolidated Adjusted Cash Flow shall mean, with respect to any
fiscal period, the DIFFERENCE of:
(i) the sum of (A) EBITDA of the Borrower and the Consolidated
Subsidiaries for such fiscal period, PLUS (B) non-cash charges of the
Borrower and the Consolidated Subsidiaries (other than charges for
depreciation and amortization) for such fiscal period to the extent
deducted in determining Consolidated Net Income (or Loss) for such period;
MINUS
(ii) brokerage commissions paid in connection with sales of "B"
shares of investment companies and mutual funds managed or advised by the
Borrower or one of its Subsidiaries (net of contingent deferred sales
charges received in conjunction with redemptions of such "B" shares).
(c) Consolidated Fixed Charges shall mean, with respect to any fiscal
period, the SUM of:
(i) the aggregate amount of interest required to be paid by the
Borrower and the Consolidated Subsidiaries during such period on all Funded
Debt of the Borrower and the Consolidated Subsidiaries outstanding during
all or any part of such period;
(ii) the aggregate amount of scheduled installments of principal
required to be paid by the Borrower and the Consolidated Subsidiaries
during such period on all Funded Debt of the Borrower and the Consolidated
Subsidiaries outstanding during all or any
-68-
<PAGE>
part of such period (including non-contingent amounts payable during such
period in respect of keepwell obligations for Consolidated Subsidiaries
that act as general partners of one or more investment partnerships);
(iii) the aggregate amount of payments in respect of taxes and
other governmental assessments and charges required to be made in cash by
the Borrower and the Consolidated Subsidiaries during such period;
(iv) the aggregate amount of Capital Expeditures made during such
period; and
(v) the aggregate amount of rental payments and other scheduled
installments required to be paid by the Borrower and the Consolidated
Subsidiaries under any Capitalized Leases during such period.
9.2. TOTAL COVERAGE RATIO.
(a) The Borrower will not permit the ratio of Total Available Cash to
Total Payments (i) at March 31, 1994 for the fiscal quarter of the Borrower then
ended, (ii) at June 30, 1994 for the two consecutive fiscal quarters of the
Borrower then ended, (iii) at September 30, 1994 for the three consecutive
fiscal quarters of the Borrower then ended, and (iv) at the end of each fiscal
quarter of the Borrower thereafter for the four consecutive fiscal quarters then
ended, to be less than 1.00:1.
(b) Total Available Cash shall mean, with respect to any fiscal
period, the SUM of:
(i) Consolidated Adjusted Cash Flow for such period as defined
in Section 9.1(b);
(ii) at the start of such fiscal period, the amount equal to (A)
the lesser of (I) the Borrower's "Working Capital Reserve", and (II) the
SUM of Cash and Cash Equivalents PLUS Readily Marketable Securities of the
Borrower and the Consolidated Subsidiaries (which shall be valued at cost,
or, if cost is materially different from fair value, at fair value (as
defined in generally accepted accounting principles)), AS REDUCED BY (B)
the EXCESS of (I) Amounts Payable to Affiliated Funds for Share Purchases,
OVER (II) Receivables from Brokers for Sale of Fund Shares;
-69-
<PAGE>
(iii) if the first day of such period is prior to the Revolving
Credit Loan Maturity Date, the DIFFERENCE of (A) the Total Commitment at
the first day of such period (or, if later, the Closing Date), MINUS (B)
the aggregate amount of Revolving Credit Loans outstanding at the first day
of such period (or, if later, the Closing Date); and
(iv) the aggregate amount of cash proceeds to the Borrower from
the issue and sale of Units and exercises of options to buy Units, net of
selling commissions and offering expenses, for such period.
(c) Total Payments shall mean, with respect to any fiscal period, the
SUM of:
(i) Consolidated Fixed Charges for such period as defined in
Section 9.1(c);
(ii) the aggregate amount of mandatory installments of principal
(other than scheduled installments of principal included in the calculation
of Consolidated Fixed Charges) required to be paid by the Borrower and the
Consolidated Subsidiaries during such period on all Funded Debt of the
Borrower and the Consolidated Subsidiaries outstanding during all or any
part of such period;
(iii) the aggregate amount of mandatory payments (other than
rental payments and other scheduled installments included in the
calculation of Consolidated Fixed Charges) required to be paid by the
Borrower and the Consolidated Subsidiaries under any Capitalized Leases
during such period;
(iv) the aggregate amount of voluntary prepayments of the
principal of Funded Debt made by the Borrower and the Consolidated
Subsidiaries during such period (exclusive of payments under Section 3.3 in
respect of the Revolving Credit Loans);
(v) the aggregate amount of Distributions paid by the Borrower
(or paid by any Consolidated Subsidiary to a Person other than the Borrower
or a Consolidated Subsidiary) during such period; and
(vi) the aggregate amount of cash payments during such period by
the Borrower and its Consolidated Subsidiaries in respect of Acquisitions,
including the purchase price paid in such Acquisitions (net of
-70-
<PAGE>
amounts retained as discounts, offsets, or deferred payments), any deferred
purchase price installments and interest thereon (including payments of
principal and interest under promissory notes), brokers and finders fees,
and other out-of-pocket expenses of such Acquisitions.
9.3. RATIO OF FUNDED DEBT TO ADJUSTED CASH FLOW.
(a) The Borrower will not at any time permit the ratio of (i) the
aggregate principal amount of Consolidated Adjusted Funded Debt at such time to
(ii) Consolidated Adjusted Cash Flow for the period of four (4) consecutive
fiscal quarters then (or most recently) ended (plus, with respect to the quarter
ended June 30, 1993, the cash portion of non-recurring transaction expenses
incurred by the Borrower during such quarter in connection with the acquisition
by the Borrower of substantially all of the assets of Equitable Capital
Management Corporation in an amount not to exceed $18,100,000), to exceed 2.15:1
if such time is on or prior to June 30, 1994 and 2.00:1 if such time is after
June 30, 1994.
(b) Consolidated Adjusted Funded Debt shall mean at any time the SUM
of:
(i) the aggregate outstanding principal amount of Funded Debt of
the Borrower and the Consolidated Subsidiaries (whether owed by more than
one of them jointly or by any of them singly) at such time determined on a
consolidated basis in accordance with generally accepted accounting
principles; and
(ii) without duplication, the aggregate outstanding principal
amount of Funded Debt owed by the Borrower and the Consolidated
Subsidiaries (whether owed by more than one of them jointly or by any of
them singly) at such time to any Consolidated Subsidiary that is not a
Restricted Subsidiary.
9.4. MISCELLANEOUS.
(a) All capitalized terms that are used in this Section 9 without
definition in this Agreement shall refer to the corresponding items in the
financial statements of the Borrower (as such items were determined for purposes
of the financial statements referred to in Section 6.4).
-71-
<PAGE>
(b) For purposes of this Section 9, demand obligations shall be
deemed to be due and payable during any fiscal year during which such
obligations are outstanding.
10. CLOSING CONDITIONS.
The obligations of the Banks to make the initial Revolving Credit Loans
shall be subject to the satisfaction of the following conditions precedent at or
before the Closing Date:
10.1. FINANCIAL STATEMENTS AND MATERIAL CHANGES. The Banks shall be
reasonably satisfied that (a) the financial statements of the Borrower and the
Consolidated Subsidiaries referred to in Section 6.4.1 fairly present in all
material respects the business and financial condition and the results of
operations of the Borrower and the Consolidated Subsidiaries as of the dates and
for the periods to which such financial statements relate, and (b) there shall
have been no material adverse change in the Business of the Borrower and the
Consolidated Subsidiaries taken as a whole since the dates of such financial
statements.
10.2. LOAN DOCUMENTS. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto and shall be in full
force and effect. Each Bank and the Agent shall have received a fully executed
copy of each such document.
10.3. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Banks and the
Agent shall have received from the Borrower and the General Partner (a) a copy
of its certificate of incorporation, certificate of limited partnership, or
other charter document duly certified as of a recent date by the Secretary of
State of Delaware, (b) a copy, certified by a duly authorized officer of such
Entity to be true and complete on the Closing Date, of its by-laws, agreement of
limited partnership, or equivalent document as in effect on such date, and (c) a
certificate of the Secretary of State of Delaware as to the due organization,
legal existence, and good standing of such Entity. The certificate of
incorporation and by-laws or partnership agreement and certificate of limited
partnership, as the case may be, of the Borrower, each of its Subsidiaries, and
the General Partner shall be in all respects satisfactory in form and substance
to the Banks and the Agent.
-72-
<PAGE>
10.4. PARTNERSHIP AND CORPORATE ACTION. All partnership action necessary
for the valid execution, delivery, and performance by the Borrower of this
Credit Agreement and the other Loan Documents to which it is or is to become a
party, and all corporate action necessary for the General Partner to cause the
Borrower to execute, deliver, and perform this Credit Agreement and the other
Loan Documents to which the Borrower is or is to become a party, shall have been
duly and effectively taken, evidence thereof reasonably satisfactory to the
Banks and the Agent shall have been provided to each of the Banks, and such
action shall be in full force and effect at the Closing Date.
10.5. CONSENTS. Each party hereto shall have duly obtained all consents
and approvals of Government Authorities and other third parties, and shall have
effected all notices, filings, and registrations with Government Authorities and
other third parties, as may be required in connection with the execution,
delivery, performance, and observance of the Loan Documents; all of such
consents, approvals, notices, filings, and registrations shall be in full force
and effect; and the Banks and the Agent shall have each received evidence
thereof satisfactory to them.
10.6. OPINIONS OF COUNSEL. Each of the Banks and the Agent shall have
received a favorable opinion addressed to the Banks and the Agent, dated as of
the Closing Date, in the form of EXHIBIT I hereto from Seward & Kissel, counsel
to the Borrower.
10.7. PROCEEDINGS. There shall be no Proceedings pending or threatened
the result of which is reasonably likely to impair or prevent the Borrower's
performance and observance of its obligations under this Credit Agreement and
the other Loan Documents.
10.8. PAYMENT OF FEES. The Borrower shall have paid to the Agent, for the
account of the Banks, FNBB, or the Agent as appropriate, all fees and other
amounts due and payable in connection with the Loan Documents on or prior to the
Closing Date.
10.9. INCUMBENCY CERTIFICATE. Each of the Banks and the Agent shall have
received from the Borrower an incumbency certificate, dated as of the Closing
Date, signed by a duly authorized officer of the Borrower and giving the name
and bearing a specimen signature of each individual who shall be authorized: (a)
to sign, in the name and on behalf
-73-
<PAGE>
of the Borrower, each of the Loan Documents to which the Borrower is or is to
become a party; (b) to make Loan Requests and Conversion Requests; and (c) to
give notices and to take other action on behalf of the Borrower under the Loan
Documents.
11. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Loan, including the Revolving
Credit Loan and the Term Loan, whether on or after the Closing Date, shall also
be subject to the satisfaction of the conditions precedent set forth below.
Each of the submission of a Loan Request by the Borrower and the acceptance by
the Borrower of any Loan shall constitute a representation and warranty by the
Borrower that the conditions set forth below have been satisfied.
11.1. NO DEFAULT. No Default or Event of Default shall have occurred and
be continuing.
11.2. REPRESENTATIONS TRUE. Each of the representations and warranties of
the Borrower and its Subsidiaries contained in this Credit Agreement, the other
Loan Documents, or in any document or instrument delivered pursuant to or in
connection with this Credit Agreement shall be true and correct in all material
respects as of the time of the making of such Loan, with the same effect as if
made at and as of that time (except (a) to the extent that such representations
and warranties expressly relate to a prior date, in which case they shall be
true and correct in all material respects as of such earlier date, and (b) to
the extent of changes resulting from transactions contemplated or permitted by
this Credit Agreement and the other Loan Documents and changes occurring in the
ordinary course of business that singly or in the aggregate are not materially
adverse to the Borrower and its Consolidated Subsidiaries taken as a whole).
11.3. LOAN REQUEST. In the case of a Revolving Credit Loan, the Agent
shall have received from the Borrower a Loan Request as provided in Section 2.6.
11.4. PAYMENT OF FEES. Without limiting any other condition, the Borrower
shall have paid to the Agent, for the account of the Banks, FNBB, or the Agent
as appropriate, all fees and other amounts due and payable under the Loan
Documents at or prior to the time of the making of such Loan.
-74-
<PAGE>
11.5. NO LEGAL IMPEDIMENT. No change shall have occurred in any
Government Mandate that in the reasonable opinion of any Bank would make it
illegal for such Bank to make such Loan (it being understood that this section
shall be a condition only for the Bank or Banks affected by such Government
Mandate).
11.6. GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall reasonably request for the purpose of compliance with any applicable
Government Mandates of the Comptroller of the Currency or the Board of Governors
of the Federal Reserve System.
12. EVENTS OF DEFAULT; ACCELERATION; ETC.
12.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following events
("EVENTS OF DEFAULT" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "DEFAULTS") shall occur:
(a) the Borrower or any Other Obligor shall fail to pay any principal
of the Loans when the same shall become due and payable, whether at the stated
date of maturity or any accelerated date of maturity or at any other date fixed
for payment;
(b) the Borrower or any Other Obligor shall fail to pay any interest
on the Loans, the commitment fee, the Agent's fee, or other sums due hereunder
or under any of the other Loan Documents, when the same shall become due and
payable, whether at the stated date of maturity or any accelerated date of
maturity or at any other date fixed for payment;
(c) the Borrower or any Other Obligor shall fail to perform or
observe any of its covenants contained in Sections 7.5.1, 7.6.1, 8.1, 8.2,
8.3, 8.13, 9, or, if such failure relates to a Lien securing Funded Debt,
8.4;
(d) the Borrower, any Other Obligor, or any of their respective
Subsidiaries shall fail to perform or observe any term, covenant, or agreement
contained herein or in any of the other Loan Documents (other than those
-75-
<PAGE>
specified elsewhere in this Section 12) for thirty (30) days after written
notice of such failure has been given to the Borrower (or if the Borrower no
longer exists, such Other Obligor) by the Agent;
(e) any representation or warranty of the Borrower, any Other
Obligor, or any of their respective Subsidiaries in this Credit Agreement, any
of the other Loan Documents, or in any other document or instrument delivered
pursuant to or in connection with this Credit Agreement shall prove to have been
incorrect in any material respect upon the date when made or deemed to have been
made or repeated;
(f) a default, event of default, or other event permitting (with or
without the passage of time or the giving of notice) acceleration or exercise of
remedies shall occur with respect to any (i) Indebtedness for money borrowed,
(ii) Indebtedness in respect of the deferred purchase price of goods or
services, or (iii) Capitalized Lease, of the Borrower, any Other Obligor, or any
of their respective Subsidiaries, in any such case having a principal amount
(or, in the case of a Capitalized Lease, scheduled rental payments with a
discounted present value from the last day of the initial term to the date of
determination as determined in accordance with generally accepted accounting
principles) of at least $5,000,000, and such default, event of default, or other
event shall continue for such period of time as would entitle the holder of such
Indebtedness or Capitalized Lease (with or without notice) to accelerate such
Indebtedness or terminate such Capitalized Lease;
(g) any of the Loan Documents shall be cancelled, terminated,
revoked, or rescinded otherwise than in accordance with the terms thereof or
with the express prior written agreement, consent, or approval of the Banks, or
any Proceeding to cancel, revoke, or rescind any of the Loan Documents shall be
commenced by or on behalf of the Borrower, any Other Obligor, or any of their
respective Subsidiaries party thereto, or any Government Authority of competent
jurisdiction shall make a determination that, or issue a Government Mandate to
the effect that, any material provision of one or more of the Loan Documents is
illegal, invalid, or unenforceable in accordance with the terms thereof;
-76-
<PAGE>
(h) the Borrower, any Other Obligor, Alliance Distributors, the
General Partner, or any Material Subsidiary shall make an assignment for the
benefit of creditors, or admit in writing its inability to pay or generally fail
to pay its debts as they mature or become due, or shall petition or apply for
the appointment of a trustee or other custodian, liquidator, or receiver of the
Borrower, any Other Obligor, Alliance Distributors, the General Partner or any
Material Subsidiary or of any substantial part of the assets of the Borrower,
any Other Obligor, Alliance Distributors, the General Partner, or any Material
Subsidiary, or shall commence any Proceeding relating to the Borrower, any Other
Obligor, Alliance Distributors, the General Partner, or any Material Subsidiary
under any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution, liquidation, or similar law of any jurisdiction, now or
hereafter in effect, or shall take any action to authorize or in furtherance of
any of the foregoing, or if any such petition or application shall be filed or
any such Proceeding shall be commenced against the Borrower, any Other Obligor,
Alliance Distributors, the General Partner, or any Material Subsidiary and any
of such parties shall indicate its approval thereof, consent thereto, or
acquiescence therein;
(i) either (i) an involuntary Proceeding relating to the Borrower,
any Other Obligor, Alliance Distributors, the General Partner, or any Material
Subsidiary under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution, liquidation, or similar law of any
jurisdiction, now or hereafter in effect is commenced and not dismissed or
vacated within sixty (60) days following entry thereof, or (ii) a decree or
order is entered appointing any trustee, custodian, liquidator, or receiver
described in (h) or adjudicating the Borrower, any Other Obligor, Alliance
Distributors, the General Partner, or any Material Subsidiary bankrupt or
insolvent, or approving a petition in any such Proceeding, or a decree or order
for relief is entered in respect of the Borrower, any Other Obligor, Alliance
Distributors, the General Partner, or any Material Subsidiary in an involuntary
Proceeding under federal bankruptcy laws as now or hereafter constituted;
(j) there shall remain in force, undischarged, unsatisfied, and
unstayed, for more than thirty (30) days, any final judgment against the
Borrower, any Other Obligor, or any of their respective Subsidiaries that, with
any other
-77-
<PAGE>
such outstanding final judgments, undischarged, against the Borrower, any Other
Obligors, and their respective Subsidiaries taken together exceeds in the
aggregate $5,000,000;
(k) with respect to any Guaranteed Pension Plan, an ERISA Reportable
Event shall have occurred and the Majority Banks shall have determined in their
reasonable discretion that such event reasonably could be expected to result in
liability of the Borrower, any Other Obligor, or any of their respective
Subsidiaries to the PBGC or such Guaranteed Pension Plan in an aggregate amount
exceeding $5,000,000 and such event in the circumstances occurring reasonably
could constitute grounds for the termination of such Guaranteed Pension Plan by
the PBGC or for the appointment by the appropriate United States District Court
of a trustee to administer such Guaranteed Pension Plan; or a trustee shall have
been appointed by the United States District Court to administer such Guaranteed
Pension Plan; or the PBGC shall have instituted proceedings to terminate such
Guaranteed Pension Plan;
(l) any of the following: (i) the Borrower or (if required to be so
registered) any Other Obligor shall fail to be duly registered as an "investment
adviser" under the Investment Advisers Act of 1940; or (ii) Alliance
Distributors shall cease to be duly registered as a "broker/dealer" under the
Securities Exchange Act of 1934 or shall cease to be a member in good standing
of the National Association of Securities Dealers, Inc.; or
(m) the Borrower, any Other Obligor, Alliance Distributors, the
General Partner, or any Material Subsidiary shall either (i) be indicted for a
federal or state crime and, in connection with such indictment, either (A)
Government Authorities shall seek to seize or attach, or seek a civil forfeiture
of, property of the Borrower, any Other Obligor, Alliance Distributors, the
General Partner, or one or more of such Material Subsidiary having a fair market
value in excess of $5,000,000 or (B) the Agent shall be advised by its legal
counsel in writing that there is a reasonable possibility of such a seizure,
attachment, or forfeiture under applicable Government Mandates, or (ii) be found
guilty of, or shall plead guilty, no contest, or NOLO CONTENDERE to, any federal
or state crime, a punishment for which could include a fine, penalty, or
forfeiture of any assets of the Borrower, such Other Obligor, Alliance
Distributors, the General Partner, or such Material Subsidiary having in any
such case a fair market value in excess of $5,000,000;
-78-
<PAGE>
then, and in any such event, so long as the same may be continuing, the Agent,
upon the request of the Majority Banks, shall by notice in writing to the
Borrower declare all amounts owing with respect to this Credit Agreement, the
Notes, and the other Loan Documents to be, and they shall thereupon forthwith
become, immediately due and payable without presentment, demand, protest, or
other notice of any kind, all of which are hereby expressly waived by the
Borrower; PROVIDED that in the event of any Event of Default specified in
Section 12.1(h) or Section 12.1(i), all such amounts shall become immediately
due and payable automatically and without any requirement of notice from the
Agent or any Bank; and PROVIDED, FURTHER, that any such declaration may be
rescinded by the Majority Banks after the Events of Default leading to such
declaration are cured or waived.
12.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in Section 12.1(h) or Section 12.1(i) shall occur, any unused
portion of the credit hereunder shall forthwith terminate and each of the Banks
shall be relieved of all obligations to make Loans to the Borrower. If any
other Event of Default shall have occurred and be continuing, or if on any
Drawdown Date the conditions precedent to the making of the Loans to be made on
such Drawdown Date are not satisfied, the Agent may with the consent of the
Majority Banks and, upon the request of the Majority Banks, shall, by notice to
the Borrower, terminate the unused portion of the credit hereunder, and upon
such notice being given such unused portion of the credit hereunder shall
terminate immediately and each of the Banks shall be relieved of all further
obligations to make Loans. If any such notice is given to the Borrower, the
Agent will forthwith furnish a copy thereof to each of the Banks. No
termination of the credit hereunder shall relieve the Borrower of any of the
Obligations or any of its existing obligations to any of the Banks arising under
other agreements or instruments.
12.3. REMEDIES.
(a) In case any one or more of the Events of Default shall have
occurred and be continuing, and whether or not the Agent shall have accelerated
the maturity of the Loans pursuant to Section 12.1, each Bank, if owed any
amount with respect to the Loans, may with the consent of the Majority Banks but
not otherwise, proceed to protect and enforce its rights by any appropriate
Proceeding, whether for the specific performance of any covenant or agreement
contained
-79-
<PAGE>
in this Credit Agreement and the other Loan Documents or any instrument pursuant
to which the Obligations to such Bank are evidenced, including as permitted by
applicable Government Mandate the obtaining of the EX PARTE appointment of a
receiver, and, if such amount shall have become due, by declaration or
otherwise, proceed to enforce the payment thereof or any other legal or
equitable right of such Bank.
(b) No remedy herein conferred upon any Bank or the Agent or the
holder of any Note is intended to be exclusive of any other remedy, and each and
every remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by any
Government Mandate.
12.4. APPLICATION OF MONIES. In the event that, during the continuance of
any Default or Event of Default, the Agent or any Bank, as the case may be,
receives any monies in connection with the enforcement of rights under the Loan
Documents, such monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all costs, expenses,
disbursements, and losses that shall have been incurred or sustained by the
Agent in connection with the collection of such monies by the Agent, for the
exercise, protection, or enforcement by the Agent of all or any of the rights,
remedies, powers, and privileges of the Agent under this Credit Agreement or any
of the other Loan Documents, or in support of any provision of adequate
indemnity to the Agent against any taxes or Liens that by Government Mandate
shall have, or may have, priority over the rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or preference as
the Majority Banks may determine; PROVIDED, HOWEVER, that distributions among
Obligations owing to the Banks and the Agent with respect to each type of
Obligation such as interest, principal, fees, and expenses, shall be made among
the Banks and the Agent PRO RATA according to the respective amounts thereof;
and PROVIDED, FURTHER, that the Agent may in its discretion make proper
allowance to take into account any Obligations not then due and payable; and
(c) Third, the excess, if any, shall be returned to the Borrower or
to such other Persons as are entitled thereto.
-80-
<PAGE>
13. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of any
Event of Default, any deposits or other sums credited by or due from any of the
Banks to the Borrower and any securities or other property of the Borrower in
the possession of such Bank may be applied to or set off by such Bank against
the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrower to such Bank. Each of the Banks agrees with
each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrower to such Bank, other than Indebtedness evidenced by
the Notes held by such Bank, such amount shall be applied ratably to such other
Indebtedness and to the Indebtedness evidenced by all such Notes held by such
Bank, and (b) if such Bank shall receive from the Borrower, whether by voluntary
payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Notes held by such Bank by Proceedings
against the Borrower, by proof thereof in bankruptcy, reorganization,
liquidation, receivership or similar Proceedings, or otherwise, and shall retain
and apply to the payment of the Note or Notes held by such Bank any amount in
excess of its ratable portion of the payments received by all of the Banks with
respect to the Notes held by all of the Banks (exclusive of payments to be made
for the account of less than all of the Banks as provided in Sections 3.2.2,
5.8, and 5.9), 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
Bank receiving in respect of the Notes held by it its proportionate payment as
contemplated by this Credit Agreement; PROVIDED that if all or any part of such
excess payment is thereafter recovered from such Bank, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest.
14. THE AGENT.
14.1. AUTHORIZATION. The Agent is authorized to take such action on
behalf of each of the Banks and to exercise all such powers as are hereunder and
under any of the other Loan Documents and any related documents delegated to the
Agent, together with such powers as are reasonably incident
-81-
<PAGE>
thereto, PROVIDED that no duties or responsibilities not expressly assumed
herein or therein shall be implied to have been assumed by the Agent. The
relationship between the Agent and the Banks is and shall be that of agent and
principal only, and nothing contained in this Credit Agreement or any of the
other Loan Documents shall be construed to constitute the Agent as a trustee for
any Bank.
14.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and execute
its duties by or through employees or agents and shall be entitled to take, and
to rely on, advice of legal counsel concerning all matters pertaining to its
rights and duties under this Credit Agreement and the other Loan Documents. The
Agent may utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine.
14.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
14.4. NO REPRESENTATIONS. The Agent shall not be responsible for the
execution or validity or enforceability of this Credit Agreement, the Notes, any
of the other Loan Documents or any instrument at any time constituting, or
intended to constitute, collateral security for the Notes, or for the value of
any such collateral security or for the validity, enforceability, or
collectability of any such amounts owing with respect to the Notes, or for any
recitals or statements, warranties, or representations made herein or in any of
the other Loan Documents or in any certificate or instrument hereafter furnished
to it by or on behalf of the Borrower, or be bound to ascertain or inquire as to
the performance or observance of any of the terms, conditions, covenants, or
agreements herein or in any instrument at any time constituting, or intended to
constitute, collateral security for the Notes or to inspect any of the
properties, books, or records of the Borrower or any of its Subsidiaries. The
Agent shall not be bound to ascertain whether any notice, consent, waiver, or
request delivered to
-82-
<PAGE>
it by the Borrower or any holder of any of the Notes shall have been duly
authorized or is true, accurate, and complete. The Agent has not made nor does
it now make any representations or warranties, express or implied, nor does it
assume any liability to the Banks, with respect to the credit worthiness or
financial conditions of the Borrower or any of its Subsidiaries. Each Bank
acknowledges that it has, independently and without reliance upon the Agent or
any other Bank, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this Credit
Agreement.
14.5. PAYMENTS.
14.5.1 PAYMENTS TO AGENT. A payment by the Borrower to the Agent
hereunder or under any of the other Loan Documents for the account of any Bank
shall constitute a payment to such Bank. The Agent shall promptly distribute to
each Bank such Bank's PRO RATA share of payments received by the Agent for the
account of the Banks except as otherwise expressly provided herein or in any of
the other Loan Documents.
14.5.2. DISTRIBUTION BY AGENT. If in the reasonable opinion of the
Agent the distribution of any amount received by it in such capacity hereunder,
under the Notes, or under any of the other Loan Documents might involve it in
liability, it may refrain from making distribution until its right to make the
same shall have been adjudicated by a court of competent jurisdiction. If any
Government Authority shall adjudge that any amount received and distributed by
the Agent is to be repaid, each Person to whom any such distribution shall have
been made shall either repay to the Agent its proportionate share of the amount
so adjudged to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such Government Authority.
14.5.3. DELINQUENT BANKS. Notwithstanding anything to the contrary
contained in this Credit Agreement or any of the other Loan Documents, any Bank
that fails (a) to make available to the Agent its PRO RATA share of any Loan or
(b) to comply with the provisions of Section 13 with respect to making
dispositions and arrangements with the other Banks, where such Bank's share of
any payment received, whether by setoff or otherwise, is in excess of its PRO
RATA share of such payments due and payable to all of the Banks, in each case
as, when, and to the full extent required by the provisions of this Credit
Agreement, shall
-83-
<PAGE>
be deemed delinquent (a "DELINQUENT BANK") and shall be deemed a Delinquent Bank
until such time as such delinquency is satisfied. A Delinquent Bank shall be
deemed to have assigned any and all payments due to it from the Borrower,
whether on account of outstanding Loans, interest, fees, or otherwise, to the
remaining nondelinquent Banks for application to, and reduction of, their
respective PRO RATA shares of all outstanding Loans. The Delinquent Bank hereby
authorizes the Agent to distribute such payments to the nondelinquent Banks in
proportion to their respective PRO RATA shares of all outstanding Loans. A
Delinquent Bank shall be deemed to have satisfied in full a delinquency when and
if, as a result of application of the assigned payments to all outstanding Loans
of the nondelinquent Banks, the Banks' respective PRO RATA shares of all
outstanding Loans have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such
delinquency.
14.6. HOLDERS OF NOTES. Subject to Section 18, the Agent may deem and
treat the payee of any Note as the absolute owner thereof for all purposes
hereof until it shall have been furnished in writing with a different name by
such payee or by a subsequent holder, assignee, or transferee.
14.7. INDEMNITY. The Banks ratably shall indemnify and hold harmless the
Agent from and against any and all Proceedings (whether groundless or
otherwise), losses, damages, costs, expenses (including any expenses for which
the Agent has not been reimbursed by the Borrower as required by Section 15),
and liabilities of every nature and character arising out of or related to this
Credit Agreement, the Notes, any of the other Loan Documents, or the
transactions contemplated or evidenced hereby or thereby, or the Agent's actions
taken hereunder or thereunder, except to the extent that any of the same shall
be directly caused by the Agent's willful misconduct or gross negligence.
14.8. AGENT AS BANK. In its individual capacity, FNBB shall have the same
obligations and the same rights, powers, and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes, as
it would have were it not also the Agent.
14.9. RESIGNATION. The Agent may resign at any time by giving sixty (60)
days' prior written notice thereof to the Banks and the Borrower. Upon any such
resignation, the Majority Banks shall have the right to appoint a successor
-84-
<PAGE>
Agent. Unless an Event of Default shall have occurred and be continuing, such
successor Agent shall be reasonably acceptable to the Borrower. If no successor
Agent shall have been so appointed by the Majority Banks and shall have accepted
such appointment within thirty (30) days after the retiring Agent's giving of
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a financial institution having a
rating of not less than A or its equivalent by Standard & Poor's Corporation.
Upon the acceptance 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 hereunder. After any
retiring Agent's resignation, the provisions of this Credit Agreement and the
other Loan Documents shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
14.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Upon learning of
the existence of a Default or an Event of Default, a Bank shall promptly notify
the Agent thereof. Upon receipt of any notice under this Section 14.10, the
Agent shall promptly notify the other Banks of the existence of such Default or
Event of Default.
14.11. DUTIES IN THE CASE OF ENFORCEMENT. In case one of more Events of
Default shall have occurred and be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Agent shall, if (a) so requested by
the Majority Banks and (b) the Banks have provided to the Agent such additional
indemnities and assurances against expenses and liabilities as the Agent may
reasonably request, proceed to enforce the provisions of the Loan Documents and
exercise all or any such other legal, equitable, and other rights or remedies as
it may have under the Loan Documents. The Majority Banks may direct the Agent
in writing as to the method and the extent of any such action, the Banks hereby
agreeing to indemnify and hold the Agent harmless from all liabilities incurred
in respect of all actions taken or omitted in accordance with such directions,
PROVIDED that the Agent need not comply with any such direction to the extent
that the Agent reasonably believes the Agent's compliance with such direction to
be unlawful or commercially unreasonable in any applicable jurisdiction.
-85-
<PAGE>
15. EXPENSES.
The Borrower shall upon demand either, as the Banks or the Agent may
require and regardless of whether any Loans are made hereunder, pay in the first
instance or reimburse the Banks and the Agent (to the extent that payments for
the following items are not made under the other provisions hereof) for (a) the
reasonable out-of-pocket costs of producing and reproducing this Credit
Agreement, the other Loan Documents, and the other agreements and instruments
mentioned herein, (b) reasonable out-of-pocket expenses incurred in connection
with the syndication of this facility, (c) any taxes (including any interest and
penalties in respect thereto) payable by the Agent or any of the Banks (other
than taxes based upon the Agent's or any Bank's income or profits) on or with
respect to the transactions contemplated by this Credit Agreement, (d) the
reasonable fees, expenses, and disbursements of the Agent's Special Counsel
incurred in connection with the preparation, administration, or interpretation
of the Loan Documents, the other instruments mentioned herein, and the term
sheet for the transactions contemplated by this Credit Agreement, each closing
hereunder, and amendments, modifications, approvals, consents or waivers hereto
or hereunder, (e) the fees, expenses, and disbursements of the Agent incurred by
the Agent in connection with the preparation, administration, or interpretation
of the Loan Documents and other instruments mentioned herein, (f) all reasonable
out-of-pocket expenses (including reasonable attorneys' fees and costs, which
attorneys may be employees of any Bank or the Agent, and reasonable consulting,
accounting, appraisal, investment banking, and similar professional fees and
charges) incurred by any Bank or the Agent in connection with (i) the
enforcement of or preservation of rights under any of the Loan Documents against
the Borrower or any of its Subsidiaries or the administration thereof after the
occurrence of a Default or Event of Default and (ii) any Proceeding or dispute
whether arising hereunder or otherwise, in any way related to any Bank's or the
Agent's relationship with the Borrower or any of its Subsidiaries. The Borrower
shall not be responsible under clause (f) above for the fees and costs of more
than one law firm in any one jurisdiction with respect to any one Proceeding or
set of related Proceedings for the Agent and the Banks, unless any of the Agent
and the Banks shall have reasonably concluded that there are legal defenses
available to it that are different from or additional to those available to the
-86-
<PAGE>
Borrower or there are other circumstances that in the reasonable judgment of the
Agent and the Banks make separate counsel advisable. The covenants of this
Section 15 shall survive payment or satisfaction of all other Obligations.
16. INDEMNIFICATION.
The Borrower shall, regardless of whether any Loans are made hereunder,
indemnify and hold harmless the Agent and the Banks, together with their
respective shareholders, directors, agents, officers, Subsidiaries, and
Affiliates, from and against any and all damages, losses, settlement payments,
obligations, liabilities, claims, causes of action, and Proceedings, and
reasonable costs and expenses in connection therewith, incurred, suffered,
sustained, or required to be paid by an indemnified party by reason of or
resulting, directly or indirectly, from the transactions contemplated by the
Loan Documents, including (a) any actual or proposed use by the Borrower or any
of its Subsidiaries of the proceeds of any of the Loans, (b) the Borrower or any
of its Subsidiaries entering into or performing this Credit Agreement or any of
the other Loan Documents, or (c) with respect to the Borrower and its
Subsidiaries and their respective properties and assets, the violation of any
Environmental Law, the presence, disposal, escape, seepage, leakage, spillage,
discharge, emission, release, or threatened release of any Hazardous Substances
or any Proceeding brought or threatened with respect to any Hazardous Substances
(including claims with respect to wrongful death, personal injury, or damage to
property), in each case including the reasonable fees and disbursements of legal
counsel and reasonable allocated costs of internal legal counsel incurred in
connection with any such Proceeding, PROVIDED, HOWEVER, the Borrower shall not
be obligated to indemnify any party for any damages, losses, settlement
payments, obligations, liabilities, claims, causes of action, Proceedings,
costs, and expenses that were caused directly by the gross negligence or willful
misconduct of the indemnified party. In Proceedings, or the preparation
therefor, the indemnified parties shall be entitled to select their legal
counsel and, in addition to the foregoing indemnity, the Borrower shall,
promptly upon demand, pay in the first instance, or reimburse the indemnified
parties for, the reasonable fees and expenses of such legal counsel. The
Borrower shall not be responsible under this section for the fees and costs of
more than one law firm in any one jurisdiction for the Borrower and the
-87-
<PAGE>
indemnified parties with respect to any one Proceeding or set of related
Proceedings, unless any indemnified party shall have reasonably concluded that
there are legal defenses available to it that are different from or additional
to those available to the Borrower or there are other circumstances that in the
reasonable judgment of the indemnified parties make separate counsel advisable.
If, and to the extent that the obligations of the Borrower under this Section 16
are unenforceable for any reason, the Borrower shall make the maximum
contribution to the payment in satisfaction of such obligations that is
permissible under applicable law. The covenants contained in this Section 16
shall survive payment or satisfaction in full of all other Obligations.
17. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations, and warranties made herein, in
the Notes, in any of the other Loan Documents, or in any documents or other
papers delivered by or on behalf of the Borrower or any of its Subsidiaries
pursuant hereto shall be deemed to have been relied upon by the Banks and the
Agent, notwithstanding any investigation heretofore or hereafter made by any of
them, and shall survive the making by the Banks of the Loans, as herein
contemplated, and shall continue in full force and effect so long as any amount
due under this Credit Agreement or the Notes or any of the other Loan Documents
remains outstanding or any Bank has any obligation to make any Loans, and for
such further time as may be otherwise expressly specified in this Credit
Agreement. All statements contained in any certificate or other paper delivered
to any Bank or the Agent at any time by or on behalf of the Borrower or any of
its Subsidiaries pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by the
Borrower or such Subsidiary hereunder.
18. ASSIGNMENT AND PARTICIPATION.
18.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein, each
Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights, and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Loans at the time owing to it) and the Notes held by it; PROVIDED that (a)
-88-
<PAGE>
each of the Agent and, so long as no Event of Default has occurred and is
continuing, the Borrower shall have given its prior written consent to such
assignment, which consent, in the case of the Borrower, will not be unreasonably
withheld, (b) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Bank's rights and obligations under this Credit
Agreement, (c) each assignment shall be in a minimum amount equal to the lesser
of (i) $10,000,000 and (ii) all of the assigning Bank's rights and obligations
under this Credit Agreement, (d) each assignment of less than all of the
assigning Bank's rights and obligations under this Credit Agreement, shall be in
an amount equal to $10,000,000 or a whole multiple thereof, (e) each Bank that
is a Bank on the date hereof shall retain through the Revolving Credit Loan
Maturity Date, free of any such assignment, an amount of its Loans and
Commitment of not less than $19,000,000 unless such Bank assigns all of its
rights and obligations under this Credit Agreement, and (e) the parties to such
assignment shall execute and deliver to the Agent, for recording in the Register
(as hereinafter defined), an Assignment and Acceptance, substantially in the
form of EXHIBIT H hereto (an "ASSIGNMENT AND ACCEPTANCE"), together with any
Notes subject to such assignment. Upon such execution, delivery, acceptance,
and recording, from and after the effective date specified in each Assignment
and Acceptance, which effective date shall be at least five (5) Business Days
after the execution thereof, (i) the assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Bank hereunder, and (ii) the assigning Bank shall, to the
extent provided in such assignment and upon payment to the Agent of the
registration fee referred to in Section 18.3, be released from its obligations
under this Credit Agreement.
18.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS. By
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows: (a) other than the representation and warranty that it is
the legal and beneficial owner of the interest being assigned thereby free and
clear of any adverse claim, the assigning Bank makes no representation or
warranty, express or implied, and assumes no responsibility with respect to any
statements, warranties, or representations made in or in connection with this
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency, or value of this
-89-
<PAGE>
Credit Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto; (b) the assigning Bank makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower and its Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations, or the performance or
observance by the Borrower and its Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations of any of their
obligations under this Credit Agreement or any of the other Loan Documents or
any other instrument or document furnished pursuant hereto or thereto; (c) such
assignee confirms that it has received a copy of this Credit Agreement, together
with copies of the most recent financial statements referred to in Section 6.4
and Section 7.4 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (d) such assignee will, independently and without
reliance upon the assigning Bank, the Agent, or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this Credit
Agreement; (e) such assignee represents and warrants that it is an Eligible
Assignee; (f) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Credit
Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof or thereof, together with such powers as are reasonably incidental
thereto; (g) such assignee agrees that it will perform in accordance with their
terms all of the obligations that by the terms of this Credit Agreement are
required to be performed by it as a Bank; and (h) such assignee represents and
warrants that it is legally authorized to enter into such Assignment and
Acceptance.
18.3. REGISTER. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "REGISTER") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Revolving Credit Loans owing to, the
Banks from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Agent, and the Banks may
treat each Person whose name is recorded in the Register as a Bank hereunder for
all purposes of this Credit Agreement. The Register shall be available for
-90-
<PAGE>
inspection by the Borrower and the Banks at any reasonable time and from time to
time upon reasonable prior notice. Upon each such recordation, the assigning
Bank agrees to pay to the Agent a registration fee in the sum of $3,000.
18.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the Borrower and the Banks
(other than the assigning Bank). Within five (5) Business Days after receipt of
such notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Note, a new Note to the order of such
Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Note to the order
of the assigning Bank in an amount equal to the amount retained by it hereunder.
Such new Notes shall provide that they are replacements for the surrendered
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of the assigned Notes. The surrendered Notes shall be cancelled and returned to
the Borrower.
18.5. PARTICIPATIONS. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; PROVIDED
that (a) any such sale or participation shall not affect the rights and duties
of the selling Bank hereunder to the Borrower and (b) the only rights granted to
the participant pursuant to such participation arrangements with respect to
waivers, amendments, or modifications of the Loan Documents shall be the rights
to approve waivers, amendments or modifications that would reduce the principal
of or the interest rate on any Loans, extend the term or increase the amount of
the Commitment of such Bank as it relates to such participant, reduce the amount
of any commitment fees to which such participant is entitled, or extend any
regularly scheduled payment date for principal or interest. Each Bank shall,
promptly upon request of the Borrower in each instance, disclose to the Borrower
the parties to which such Bank has granted participations under this section
unless such Bank is subject to a contractual restriction not to do so.
-91-
<PAGE>
18.6. DISCLOSURE. Any Bank may disclose information obtained by such Bank
pursuant to this Credit Agreement to assignees or participants and potential
assignees or participants hereunder subject to Section 7.4(f).
18.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any
assignee Bank is an Affiliate of the Borrower, then any such assignee Bank shall
have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to Section 12, and the
determination of the Majority Banks shall for all purposes of this Agreement and
the other Loan Documents be made without regard to such assignee Bank's interest
in any of the Loans. If any Bank sells a participating interest in any of the
Loans to a participant, and such participant is the Borrower or an Affiliate of
the Borrower, then such transferor Bank shall promptly notify the Agent of the
sale of such participation. A transferor Bank shall have no right to vote as a
Bank hereunder or under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or modifications
to any of the Loan Documents or for purposes of making requests to the Agent
pursuant to Section 12 to the extent that such participation is beneficially
owned by the Borrower or any Affiliate of the Borrower, and the determination of
the Majority Banks shall for all purposes of this Agreement and the other Loan
Documents be made without regard to the interest of such transferor Bank in the
Loans to the extent of such participation.
18.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall
retain its rights to be indemnified pursuant to Sections 5.8, 5.9, 5.11,
15, and 16 with respect to any claims or actions arising prior to the date of
the assignment. If any assignee Bank is not incorporated under the laws of the
United States of America or any state thereof, it shall, prior to the date on
which any interest or fees are payable hereunder or under any of the other Loan
Documents for its account, deliver to the Borrower and the Agent certification
as to its exemption from deduction or withholding of any United States federal
income taxes. Anything contained in this Section 18 to the contrary
notwithstanding, any Bank may at any time pledge all or any portion of its
interest and rights under this Credit Agreement (including all or any portion of
its Notes) to any
-92-
<PAGE>
of the twelve Federal Reserve Banks organized under Section 4 of the Federal
Reserve Act, 12 U.S.C. Section 341. No such pledge or the enforcement thereof
shall release the pledgor Bank from its obligations hereunder or under any of
the other Loan Documents.
18.9. ASSIGNMENT BY BORROWER. The Borrower shall not assign or transfer
any of its rights or obligations under any of the Loan Documents without the
prior written consent of each of the Banks.
19. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Notes shall be in writing and shall be delivered in
hand, mailed by United States registered or certified first class mail, postage
prepaid, sent by overnight courier, or sent by telegraph, telecopy, telefax or
telex and confirmed by delivery via courier or postal service, addressed as
follows:
(a) if to the Borrower, at 1345 Avenue of the Americas, New York, New
York 10105 (Fax Number (212) 307-5534), Attention: Chief Accounting Officer,
with a copy sent via the same means to General Counsel of the Borrower at 1345
Avenue of the Americas, New York, New York 10105 (Fax Number (212) 554-4613), or
at such other address for notice as any of such Persons shall last have
furnished in writing to the Person giving the notice;
(b) if to the Agent, at 100 Federal Street, Boston, Massachusetts
02110, USA, Attention: Carol A. Clark, Managing Director, or such other address
for notice as such Person shall last have furnished in writing to the Person
giving the notice; and
(c) if to any Bank, at such Bank's address set forth on SCHEDULE 1
hereto, or such other address for notice as such Bank shall have last furnished
in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at
-93-
<PAGE>
the time of the receipt thereof by such officer or the sending of such
facsimile, or when delivery is duly attempted and refused, and (ii) if sent by
registered or certified first-class mail, postage prepaid, on the third Business
Day following the mailing thereof.
20. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH (EXCLUDING THE
LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH OF THE AGENT, THE BANKS,
AND THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE
COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS
TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY
SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN
SECTION 19. EACH OF THE AGENT, THE BANKS, AND THE BORROWER HEREBY WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY
SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
21. HEADINGS.
The captions in this Credit Agreement are for convenience of reference only
and shall not define or limit the provisions hereof.
22. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when so
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Credit Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought.
-94-
<PAGE>
23. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection herewith
or therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Credit Agreement nor any term
hereof may be changed, waived, discharged or terminated, except as provided in
Section 25.
24. WAIVER OF JURY TRIAL.
EACH OF THE AGENT, THE BANKS, AND THE BORROWER HEREBY WAIVES ITS RIGHT TO A
JURY TRIAL WITH RESPECT TO ANY PROCEEDING ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS CREDIT AGREEMENT, THE NOTES, OR ANY OF THE OTHER LOAN
DOCUMENTS, AND RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, EACH OF THE AGENT,
THE BANKS, AND THE BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY PROCEEDING REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL,
EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. THE BORROWER (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT, OR ATTORNEY OF ANY BANK OR THE AGENT HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH BANK OR THE AGENT WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT EACH OF THE
AGENT AND THE BANKS HAS BEEN INDUCED TO ENTER INTO THIS CREDIT AGREEMENT AND THE
OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY BY, AMONG OTHER THINGS, THE WAIVERS
AND CERTIFICATIONS CONTAINED HEREIN.
25. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Except as otherwise expressly provided in this Credit Agreement, any term
of this Credit Agreement, the other Loan Documents, or any other instrument
related hereto or mentioned herein may be amended with, but only with, the
written consent of the Borrower and the Majority Banks. Any consent or approval
required or permitted by this Credit Agreement to be given by the Banks may be
given, any acceleration of amounts owing under the Loan Documents may be
rescinded, and the performance or observance by the Borrower of any terms of
this Credit Agreement, the other Loan Documents, or any other instrument related
hereto or mentioned herein or the continuance of any Default or Event of Default
may be waived (either generally or in a particular instance and either
retroactively or
-95-
<PAGE>
prospectively) with, but only with, the written consent of the Majority Banks.
Notwithstanding the foregoing, the rate of interest on the Notes (other than
interest accruing pursuant to Section 5.12 following the effective date of any
waiver by the Majority Banks of the Default or Event of Default relating
thereto), the term of the Notes, the amount of the Commitments of the Banks, and
the amount of commitment fees hereunder may not be changed without the written
consent of the Borrower and the written consent of Banks holding one hundred
percent (100%) of the outstanding principal amount of the Notes (or, if no Notes
are outstanding, Commitments representing one hundred percent (100)% of the
Total Commitment); neither this Section 25 nor the definition of Majority Banks
may be amended without the written consent of all of the Banks; and the amount
of the Agent's fee and Section 14 may not be amended without the written consent
of the Agent. 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 Borrower shall entitle the Borrower to other or further notice or demand in
similar or other circumstances.
26. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one clause
or provision hereof shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Credit Agreement in any jurisdiction.
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
ALLIANCE CAPITAL MANAGEMENT L.P.
By: Alliance Capital Management
Corporation, General Partner
By:
-------------------------------
Name:
Title:
-96-
<PAGE>
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent
By: /s/ Nancy E. Fuller
-------------------------------
Name: Nancy E. Fuller
Vice President
THE CHASE MANHATTAN BANK, N.A.
By: /s/ Charles T. Cornell
-------------------------------
Name: Charles T. Cornell
Title: Vice President
THE BANK OF NEW YORK
By: /s/ Lee B. Stephens III
-------------------------------
Name: Lee B. Stephens III
Title: Vice President
NATIONSBANK OF GEORGIA
By: /s/ R. K. Grunewald
-------------------------------
Name: R. K. Grunewald
Title: Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ Lauren S. McCoy
-------------------------------
Name: Lauren S. McCoy
Title: Vice President
-97-
<PAGE>
SCHEDULE 1
BANKS AND COMMITMENTS
NAME & ADDRESS COMMITMENT PERCENTAGE
- - -------------- ---------- ----------
The First National Bank $24,000,000 24.0%
of Boston
100 Federal Street
Boston, Massachusetts 02110
Domestic Lending Office:
100 Federal Street
Boston, Massachusetts 02110
Eurodollar Lending Office:
Nassau Branch
c/o The First National Bank
of Boston
100 Federal Street
Boston, Massachusetts 02110
The Chase Manhattan Bank, N.A. $19,000,000 19.0%
Insurance Division, Concourse Level
1285 Sixth Avenue
New York, New York 10019
Domestic Lending Office:
One Chase Manhattan Plaza
New York, New York 10081
Eurodollar Lending Office:
One Chase Manhattan Plaza
New York, New York 10081
The Bank of New York $19,000,000 19.0%
One Wall Street
New York, New York 10286
Domestic Lending Office:
One Wall Street
New York, New York 10286
-98-
<PAGE>
Eurodollar Lending Office:
One Wall Street
New York, New York 10286
Nationsbank of Georgia $19,000,000 19.0%
Securities Industry Group - 21st Floor
600 Peachtree Street, NE
Atlanta, Georgia 30308-2213
Domestic Lending Office:
600 Peachtree Street, NW
Atlanta, Georgia 30308-2213
Eurodollar Lending Office:
600 Peachtree Street, NW
Atlanta, Georgia 30308-2213
Morgan Guaranty Trust Company $19,000,000 19.0%
of New York
60 Wall Street
New York, New York 10260-0060
Domestic Lending Office:
60 Wall Street
New York, New York 10260-0060
Eurodollar Lending Office:
Nassau Office
c/o Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, New York 10260-0060
TOTAL $100,000,000 100.00%
------------ -------
-99-
<PAGE>
ALLIANCE CAPITAL MANAGEMENT L.P.
SCHEDULE 6.1.4 - EQUITY SECURITIES
Alliance Capital Management L.P.
Units Outstanding - 72,157,200
Class A Convertible - into Units - 100,000
Options (Held by Management and
Employees) Exercisable into Units - 3,185,800
Alliance Capital Management Corporation - 1,000 shares of common stock
<PAGE>
ALLIANCE CAPITAL MANAGEMENT L.P.
SCHEDULE 6.2 - GOVERNMENT APPROVALS
NONE
<PAGE>
ALLIANCE CAPITAL MANAGEMENT L.P.
SCHEDULE 6.15 - BENEFIT PLANS
Retirement Plan For Employees Of Alliance Capital Management L.P.
Profit Sharing Plan For Employees Of Alliance Capital Management L.P.
Profit Sharing Plan For Former Employees Of Equitable Capital Management
Corporation
<PAGE>
ALLIANCE CAPITAL MANAGEMENT L.P.
SCHEDULE 6.18 - SUBSIDIARIES
<TABLE>
<CAPTION>
PERCENTAGE OF VOTING
NAME OF JURISDICTION OF STOCK OWNED BY COMPANY
SUBSIDIARY INCORPORATION AND EACH OTHER SUBSIDIARY
<S> <C> <C>
Alliance Capital Management Delaware 100%
Corporation of Delaware*
Alliance Capital Oceanic Delaware 100%
Corporation*
Alliance Capital Limited* England 100%
Dimensional Asset Management England 100%
Limited*
Dimensional Trust Management England 100%
Limited*
Alliance Fund Services, Inc.* Delaware 100%
Alliance Fund Distributors, Inc.* Delaware 100%
Alliance Capital Management Delaware 100%
(Japan) Inc.*
Alliance Capital (Luxembourg) S.A.* Luxembourg 100%
Alliance Capital Management Victoria, Australia 100%
Australia Pty. Ltd.*
Alliance Capital Management British Columbia, Canada 100%
Canada, Inc.*
Alliance Capital Management Delaware 100%
(India) Ltd.*
Alliance International Fund Delaware 100%
Services S.A.*
Alliance Capital Management Delaware 100%
(Asia) Ltd.*
Alliance Corporate Finance Delaware 100%
Group Incorporated
</TABLE>
- 1 -
<PAGE>
ALLIANCE CAPITAL MANAGEMENT L.P.
SCHEDULE 6.18 CONT'D. - SUBSIDIARIES
<TABLE>
<CAPTION>
PERCENTAGE OF VOTING
NAME OF JURISDICTION OF STOCK OWNED BY COMPANY
SUBSIDIARY INCORPORATION AND EACH OTHER SUBSIDIARY
<S> <C> <C>
Alliance Capital Global Delaware 100%
Derivatives Corporation*
Meiji - Alliance Capital Delaware 50%
Corporation
Alliance Barra Research Delaware 50%
Institute Inc.
<FN>
*Restricted Subsidiaries of Alliance Capital Management L.P.
</TABLE>
- 2 -
<PAGE>
ALLIANCE CAPITAL MANAGEMENT L.P.
SCHEDULE 6.19 - FUNDED DEBT
<TABLE>
<CAPTION>
<S> <C>
Amended Senior Note Agreement dated as of January 15, 1992
(the "Note Agreement") between Alliance Capital Management
L.P. and the holders of the notes $105,000,000
Deferred compensation liabilities to 16 employees under
the Alliance Partners Plan $ 2,596,068
Deferred compensation liabilities to five employees $ 1,724,376
Unsecured loan notes issued November 7, 1991 by
Alliance Capital Management Corporation of Delaware
in connection with the acquisition of Dimensional
Asset Management Limited (due 1996):
Rolf Weiner Banz $ 609,000
Elizabeth Grabyna Banz $ 609,000
R.W Banz and E. G. Banz $ 702,000
Letter of Credit opened with State Street Bank and Trust by
Alliance Capital Management L.P., Alliance Fund Services,
Inc., Alliance Fund Distributors, Inc. and U.S. registered
mutual funds managed by the Company in favor of the ICI
Mutual Insurance Company ("ICI Mutual") and related
undertaking to commit additional capital to ICI Mutual $ 1,095,308
Commitment by the Company to provide financial support to
Alliance Capital Management Pty. Ltd. through February 28, A$ 650,000
1994
Commitment by the Company to provide financial support to
Alliance Capital Management Pty. Ltd. through February 28, A$ 500,000
1995
Keepwell Agreement issued by Alliance Capital Management L.P.
in favor of Alliance Corporate Finance Group Incorporated $ 10,000,000
Promissory Note issued by Alliance Capital Management L.P.
payable on demand to the order of Alliance Corporate Finance
Group Incorporated $ 5,000,000
Promissory Note payable to Equitable Capital Partners, L.P. $ 2,501,793
Promissory Note payable to Equitable Capital Partners
(Retirement Fund), L.P. $ 1,608,142
Capitalized Leases of Alliance Capital Management L.P. and
its Subsidiaries:
Master Lease Corp. capital lease (Cleveland - AT&T phone
system) $ 8,106
NCR Credit Corp. capital lease (NCR Remittance Processing
System) $ 13,459
</TABLE>
- 1 -
<PAGE>
ALLIANCE CAPITAL MANAGEMENT L.P.
SCHEDULE 6.19 CONT'D. - FUNDED DEBT
<TABLE>
<CAPTION>
<S> <C>
IBM Corp. capital lease (IBM magnetic disk drives) $ 54,918
IBM Credit Corp. capital lease (IBM printer) $ 133,409
Alliance Capital Limited Automobile Leases
(various automobiles) $ 72,460
Alliance Capital Management Canada, Inc. Furniture
and Equipment $ 42,763
</TABLE>
- 2 -
<PAGE>
ALLIANCE CAPITAL MANAGEMENT L.P.
SCHEDULE 8.4 - LIENS
Liens on the items of equipment and vehicles under Capitalized Leases, as
described in Schedule 6.19.
<PAGE>
ALLIANCE CAPITAL MANAGEMENT L.P.
SCHEDULE 8.6 - INVESTMENTS
<TABLE>
<CAPTION>
<S> <C>
Alliance Mutual Funds and Deposit Products:
Various Seed Money $ 3,176,124
-----------
Other Investments in Alliance Mutual Funds and Deposit Products:
Alliance Bond Fund - U.S. Government 1,705,607
Alliance Capital Reserves 17,664,779
Alliance Money Reserves 8,000,000
ACM Institutional Reserves 22,443,174
Alliance Tax Exempt Reserves 903,694
Alliance Government Reserves 2,016,556
Alliance Insured Account 588,373
Alliance Technology Fund 53,322
-----------
53,375,505
-----------
Total Investment in Alliance mutual funds $56,551,629
===========
Other Investments:
ICI Mutual Insurance Company $ 386,632
Meiji- Alliance Capital Corporation (common stock
par value $1.00 per share, 100,000 shares authorized) 62,050
Japanese Government Bond series 98 34,969
Equitable Deal Flow Fund L.P. 8,966
ECM Fund, L.P. I 86,991
Equitable Capital Partners L.P. 2,447,133
Equitable Capital Partners Retirement Fund L.P. 1,578,337
Equitable Capital Diversified Holdings L.P. II 360,917
-----------
$ 4,965,995
===========
Keepwell Agreement issued by Alliance Capital
Management L.P. in favor of Alliance Corporate
Finance Group Incorporated $10,000,000
===========
Promissory Note issued by Alliance Capital
Management L.P. payable on demand to the order of
Alliance Corporate Finance Group Incorporated $ 5,000,000
===========
</TABLE>
<PAGE>
EXHIBIT A TO THE
CREDIT AGREEMENT
ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT, dated as of ___________, 199_ (this "ASSUMPTION
AGREEMENT"), among __________, a ___________ corporation (the "COMPANY"), and
The First National Bank of Boston, individually and as agent (the "AGENT") for
the Banks listed on the signature page to the Credit Agreement referred to below
[**Adjust description of parties as appropriate to reflect the requirements of
Alternatives 2 and 3 in Section 2**];
W I T N E S S E T H:
WHEREAS, Alliance Capital Management L.P., a Delaware limited partnership
(the "BORROWER"), the Banks and the Agent have entered into that certain
Revolving Credit and Term Loan Agreement dated as of February 14, 1994 (the
"CREDIT AGREEMENT");
WHEREAS, Section 8 of the Credit Agreement contemplates certain
circumstances in which the obligations of the Borrower under the Credit
Agreement will be assumed, on a joint and several basis with the Borrower, by
one or more corporations that are successor(s) to the Borrower or transferee(s)
of certain portions of the business or assets of the Borrower;
WHEREAS, [**describe circumstances giving rise to the execution of this
Agreement**] (the "Transaction"); and
WHEREAS, Section [**8.1(c), or 8.2(a), or 8.2(c)(iii)**] of the Credit
Agreement requires that, as a condition precedent of the Transaction, the
Company execute and deliver this Agreement in order to (a) become jointly and
severally liable, with the Borrower and any other corporations that have entered
into, or will in the future enter into, Assumption Agreements (any such
corporations, the "OTHER OBLIGORS"), for all the obligations of the Borrower
under the Credit Agreement and the other Loan Documents and (b) agree to be
bound by all of the covenants and agreements set forth therein;
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and
agreements set forth hereinbelow, and other good and valuable consideration, the
Company, the Banks and the Agent hereby agree as follows:
<PAGE>
Section I. ASSUMPTION.
1. The Company hereby assumes, jointly and severally with the Borrower
and the Other Obligors, all of the duties, liabilities and obligations of the
Borrower under the Credit Agreement, and the Company shall be bound by, and
shall perform and observe the terms and conditions of, the Credit Agreement as
if it had originally executed the Credit Agreement as the Borrower. Without
limiting the generality of the foregoing, the Company, jointly and severally
with the Borrower and the Other Obligors, shall pay to the order of the Banks or
the Agent, as appropriate, all principal, interest, and other amounts that are
due and payable from time to time under the Credit Agreement. The closing of the
Transaction shall be the sole condition precedent to the effectiveness of this
assumption by the Company. Notwithstanding the foregoing, the Company shall
comply with Section 7.6.4 of the Credit Agreement only to the extent required by
Government Mandate.
2. [**Insert one of the three following alternatives, as appropriate.**]
FIRST ALTERNATIVE
[**To be inserted for (a) transfers of assets to Restricted Subsidiaries under
Credit Agreement section 8.1(c) provided the Borrower will survive the transfer
and (b) Reorganizations between Restricted Subsidiaries under Credit Agreement
section 8.2(a).**]
The rights of the Borrower under the Credit Agreement, including, without
limitation, the right to request borrowings and determine the interest rates
applicable to Loans, shall continue to be exercised exclusively by the Borrower.
SECOND ALTERNATIVE
[**To be inserted for Reorganizations under Credit Agreement section 8.2(c) in
which all of the business and assets of the Borrower remaining after any other
transfers to Other Obligors or others are transferred to the Company and the
Borrower does not survive, provided that, upon completion of such Reorganization
investment management contracts with respect to at least eighty percent (80%) of
the assets under management by the Borrower and the Consolidated Subsidiaries
immediately prior to such Reorganization will, if held by the Borrower and/or
one or more of the Consolidated Subsidiaries prior to such Reorganization, be
held by the Company and its Consolidated Subsidiaries. For this alternative, the
Banks, the Borrower, and any Other Obligors must join this Agreement.**]
- 2 -
<PAGE>
Upon the effectiveness of the Transaction, the Company shall assume the rights
of the Borrower under the Credit Agreement and shall be entitled to exercise the
same subject to the terms and conditions of the Credit Agreement. Without
limiting any provisions hereof or of any other Loan Document, each Other Obligor
acknowledges that its liability under the Assumption Agreement to which it is
party shall extend to all amounts owing under the Credit Agreement by virtue of
the Company's exercise of the rights assumed by it hereunder.
THIRD ALTERNATIVE
[**To be inserted in all cases other than those to which either the First
Alternative or the Second Alternative applies. For this alternative, the
Borrower and any Other Obligor must join this Agreement.**]
Upon the effectiveness of the Transaction, (a) the Commitment shall terminate
and the Banks shall be relieved of all obligations to make Loans under the
Credit Agreement, and (b) subject to clause (a) [**insert name of party to
exercise remaining rights of Borrower**] shall assume the rights of the Borrower
under the Credit Agreement and shall be entitled to exercise the same subject to
the terms and conditions of the Credit Agreement. Without limiting any
provisions hereof or of any other Loan Document, the Company and each Other
Obligor acknowledges that its liability under the Assumption Agreement to which
it is party shall extend to all amounts owing under the Credit Agreement by
virtue of the [**insert name of party to exercise remaining rights of
Borrower**]'s exercise of the rights assumed by it hereunder.
3. [**This section may be deleted if the Company is to be the sole
obligor in respect of the Credit Agreement.**] The obligations of the Company
under this Agreement shall be primary, absolute and unconditional (except for
the condition specified in the last sentence of paragraph 1 of this Section I),
and, without limiting the generality of the foregoing, shall not be released,
discharged, modified or otherwise affected by:
(i) any additional borrowings under the Credit Agreement, regardless
of whether the Company shall have approved any of such borrowings or been given
notice thereof;
(ii) any extension, renewal, settlement, compromise, waiver or
release in respect of the obligations of the Borrower or any Other Obligor
under any Loan Document;
- 3 -
<PAGE>
(iii) any change in the legal existence, structure or ownership of the
Borrower or any Other Obligor or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting the Borrower or any Other Obligor;
(iv) the existence of any claim, set-off or other rights that the
Company may have at any time against the Agent, any of the Banks or any other
Person, whether in connection herewith or any unrelated transaction, provided
that nothing herein shall prevent the assertion of such claim by separate suit
or compulsory counterclaim;
(v) any act, omission to act or delay of any kind by the Borrower,
the Agent, any Bank or any other Person; or
(vi) any other event or circumstance whatsoever that might, but for
this paragraph 3, constitute a legal or equitable discharge of the Guarantor's
obligations hereunder.
4. [**This section may be deleted if the Company is to be the sole
obligor in respect of the Credit Agreement.**] The Company's obligations
hereunder shall remain in full force and effect until the principal of and
interest on the Notes, and all other amounts payable by the Borrower and any
Other Obligors under the Credit Agreement and the other Loan Documents, shall
have been paid in full. If at any time any payment under any of the Notes or the
Credit Agreement is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of the Borrower or any Other Obligor,
or otherwise, the Company's obligations hereunder with respect to such payment
shall be reinstated as though such payment had been due but not made at the time
of such rescission, restoration or return.
5. [**This section may be deleted if the Company is to be the sole
obligor in respect of the Credit Agreement.**] The Company shall not exercise
against the Borrower or any Other Obligor any rights or remedies in respect of
payments under this Agreement, whether for contribution, by way of subrogation
or otherwise, until after the full and final payment of all Obligations.
Section II. DEFINITIONS.
For the purposes of this Agreement, each capitalized term used herein and
not otherwise defined herein has the meaning assigned to that term under the
Credit Agreement.
- 4 -
<PAGE>
Section III. CERTAIN DOCUMENTS.
The Company shall, as a condition precedent to the Transaction, furnish to
the Agent and each Bank the following documents, each of which shall be
reasonably satisfactory to the Agent and each of the Banks in form and
substance:
1. (a) A copy of the Company's certificate of incorporation or other
articles of corporate organization duly certified as of a recent date by the
secretary of state or other appropriate official of the jurisdiction in which
the Company is incorporated, (b) a copy, certified by a duly authorized officer
of the Company to be true and complete on the date of this Agreement, of its
by-laws as in effect on such date, and (c) a certificate of the secretary of
state or other appropriate official of the jurisdiction in which the Company is
incorporated, dated as of a recent date, as to the due incorporation, legal
existence and good standing of the Company.
2. A certificate of the Company, the Borrower, and any Other Obligors
dated as of the effective date of the Transaction certifying, jointly and
severally, that (a) no Default or Event of Default has occurred or is continuing
or will exist immediately after giving effect to the Transaction, (b) if the
Transaction is subject to Section 8.2(c)(vi) of the Credit Agreement, any
diminution in the aggregate net worth of the Borrower (if it survives the
Transaction), the Company, any Other Obligors, and their respective consolidated
Subsidiaries (after adjustment of such aggregate net worth to eliminate
intercompany items and without double counting), when compared with the
Consolidated Net Worth of the Borrower as of the date of the most recently
completed fiscal quarter immediately prior to such Reorganization, is not more
than five percent (5%) of such Consolidated Net Worth, and (c) the Transaction
otherwise satisfies the conditions of the Credit Agreement applicable thereto.
3. A certificate from the Company with respect to the incumbency and
signature of each of its officers (a) who is authorized to sign this Agreement
and any other document executed in connection herewith on its behalf and (b) who
will, until replaced by another officer or officers duly authorized for that
purpose, act as its representative for the purposes of signing documents and
giving notices and other communications in connection with the Credit Agreement
and any documents executed in connection therewith and the transactions
contemplated hereby and thereby. The Agent and the Banks may conclusively rely
on such certificate until
- 5 -
<PAGE>
the Agent receives a notice in writing from the Company providing the names and
signatures of replacement officers.
4. An opinion of Seward & Kissel, or other counsel to the Company
satisfactory to the Agent and the Banks, in the form of EXHIBIT J to the Credit
Agreement with such changes as may be satisfactory to the Agent and required so
that such opinion relates to (a) the Company, (b) this Agreement, (c) any other
Loan Documents to which the Company is party, and (d) any other Loan Documents
to which the Company is required to become a party in order to satisfy the
applicable conditions of the Credit Agreement giving rise to the execution and
delivery of this Agreement (the Loan Documents referred to in clauses (c) and
(d), the "REQUIRED LOAN DOCUMENTS").
Section IV. REPRESENTATIONS AND WARRANTIES
In order to induce the Agent to enter into this Agreement, the Company
represents and warrants to the Agent and the Banks that:
1. The Company is duly organized, validly existing and in good standing
as a corporation organized under the laws of the State of __________, and has
the corporate power and authority to (a) execute and deliver this Agreement and
any Required Loan Documents and (b) perform its obligations under, and comply
with the requirements of, this Agreement and any Required Loan Documents. The
Company is duly qualified or authorized to conduct business in all jurisdictions
other than the jurisdiction in which it is incorporated in which it owns or
leases property, or conducts any business, so as to require such qualification,
except where the failure to be so qualified would not have a Material Effect.
2. All corporate action necessary for the valid execution, delivery and
performance by the Company of this Agreement and any Required Loan Documents,
has been duly and effectively taken and is in full force and effect at the date
of this Agreement. Each of this Agreement and any Required Loan Documents has
been duly executed and delivered by the Company. This Agreement and such
Required Loan Documents constitute the Company's legal, valid and binding
obligations, enforceable against the Company in accordance with their terms,
except as enforceability may be limited by bankruptcy, insolvency, moratorium
and other similar laws affecting creditors' rights generally and by general
principles of equity, regardless of whether enforcement is sought in a
proceeding in equity or at law.
- 6 -
<PAGE>
3. The Company has duly obtained all consents and approvals of Government
Authorities and has duly effected all notices, filings and registrations with
Government Authorities, as may be required in connection with the execution,
delivery, performance and observance of this Agreement and any Required Loan
Documents, and such consents, approvals, notices, filings and registrations are
in full force and effect at the date of this Agreement. Except as would not have
a Material Effect, the Company has duly obtained all consents and approvals of
third parties other than Government Authorities, and has duly effected all
notices to such third parties, as may be required in connection with the
execution, delivery, performance and observance of this Agreement and any
Required Loan Documents, and such consents, approvals, and notices are in full
force and effect at the date of this Agreement.
4. The execution and delivery by the Company of this Agreement and any
Required Loan Documents to be entered into by the Company concurrently with this
Agreement, and the performance and observance by the Company of this Agreement
and such Required Loan Documents will not, contravene, or result in a default or
event of default under, (a) the Company's certificate of incorporation (or other
articles of corporate organization) or by-laws, (b) any Contract to which the
Company is party or to which any of its assets are subject (except as will not
be likely to have a Material Effect); or (c) any Government Mandate applicable
to the Company or its assets.
5. The Company is in full compliance with the terms and conditions of
the Credit Agreement, and will be in full compliance with all such terms and
conditions upon the effectiveness of the Transaction.
Section V. EXPENSES.
The Company shall, jointly and severally with the Borrower, upon demand,
pay in the first instance, or reimburse the Agent for, all reasonable out-of-
pocket expenses of the Agent (including the reasonable fees and disbursements of
counsel to the Agent) incurred in connection with the preparation, execution and
delivery of this Agreement and all transfer, stamp, documentary or other similar
taxes, in respect of this Agreement or any other document or instrument referred
to herein. The Agent shall deliver to the Company, to support such expenses,
true copies of unpaid invoices, receipted bills, and such other supporting
information as the Company may reasonably request. The provisions of this
Section V shall survive the termination of the Credit Agreement.
-7-
<PAGE>
Section VI. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW). EACH PARTY HERETO AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT
IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING
THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE
SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE
ADDRESS SPECIFIED IN SECTION 19 OF THE CREDIT AGREEMENT. EACH PARTY HERETO
HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF
ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT
COURT.
Section VII. COUNTERPARTS; BINDING EFFECT.
This Agreement may be executed in any number of counterparts, all of which
when taken together shall constitute but one and the same instrument. This
Agreement is binding upon the parties hereto and their respective successors and
assigns, and is intended to benefit and to be enforceable by the parties hereto
and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as a sealed instrument as of the day and year first above written.
[**THE COMPANY**]
By:____________________________________
Authorized Signatory
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent
By:____________________________________
Authorized Signatory
-8-
<PAGE>
[**OTHER BANKS**]
[**only required for the Second
Alternative in Section 2**]
By:____________________________________
Authorized Signatory
[**Insert signatures for the Borrower
and Other Obligors as required for the
Second and Third Alternatives in
Section 2**]
-9-
<PAGE>
EXHIBIT B to the
CREDIT AGREEMENT
REVOLVING CREDIT AND TERM NOTE
$_________________________ _____________________, 199__
FOR VALUE RECEIVED, the undersigned ALLIANCE CAPITAL MANAGEMENT, L.P., a
Delaware limited partnership (the "BORROWER"), hereby promises to pay to the
order of _______________________________________ (the "BANK") at the head office
of the Agent as such term is defined in the Revolving Credit and Term Loan
Agreement dated as of February 14, 1994 (as amended and in effect from time to
time, the "CREDIT AGREEMENT"), among the Borrower, The First National Bank of
Boston, individually and as agent, and the Banks listed on SCHEDULE 1 thereto,
at 100 Federal Street, Boston, Massachusetts 02110:
(a) prior to or on the Revolving Credit Loan Maturity Date the
principal amount of _________________________ ($________) or, if less, the
aggregate unpaid principal amount of Revolving Credit Loans advanced by the
Bank to the Borrower pursuant to the Credit Agreement;
(b) in the event the Bank makes the Term Loan on the Revolving Credit
Loan Maturity Date as provided in Section 4 of the Credit Agreement, the
principal amount of the Term Loan, such principal amount to be paid as
follows:
(i) seven consecutive quarterly installments due and payable on
the last day of each calendar quarter commencing on June 30, 1997,
each in amount equal to the quotient of (A) the initial principal
amount of the Term Loan, divided by (B) eight (8); and
(ii) the unpaid balance of the Term Loan on the Term Loan
Maturity Date; and
(c) interest from the date hereof on the principal balance from time
to time outstanding through and including the respective maturity dates of
the Loans evidenced hereby at the times and rates specified in, and in all
cases in accordance with the terms of, the Credit Agreement.
<PAGE>
This Note evidences borrowings under and has been issued by the Borrower in
accordance with the terms of the Credit Agreement. The Bank is entitled to the
benefit of the Credit Agreement and the other Loan Documents, and may enforce
the agreements of the Borrower contained therein, and the Bank may exercise the
respective remedies provided for thereby or otherwise available in respect
thereof, all in accordance with the respective terms thereof. All capitalized
terms used in this Note and not otherwise defined herein shall have the same
meanings herein as in the Credit Agreement.
The Borrower irrevocably authorizes the Bank to make or cause to be made,
at or about the time of the Drawdown Date of any Revolving Credit Loan, at or
about the time the Term Loan is made (in the event the Term Loan is made), or at
the time of receipt of any payment of principal of this Note, an appropriate
notation on the appropriate grid attached to this Note, or the continuation of
such grid, or any other similar record, including computer records, reflecting
(as the case may be) the making of such Revolving Credit Loan, the making of the
Term Loan or receipt of such payment. The outstanding amount of the Loans set
forth on the grids attached to this Note, or the continuation of such grids, or
any other similar record, including computer records, maintained by the Bank
with respect to any Loans shall be PRIMA FACIE evidence of the principal amount
thereof owing and unpaid to the Bank, but the failure to record, or any error in
so recording, any such amount on any such grid, continuation, or other record
shall not limit or otherwise affect the obligation of the Borrower hereunder or
under the Credit Agreement to make payments of principal of and interest on this
Note when due.
The Borrower has the right in certain circumstances and the obligation
under certain other circumstances to prepay the whole or part of the principal
of this Note on the terms and conditions specified in the Credit Agreement.
If any one or more of Events of Default shall occur and be continuing, the
entire unpaid principal amount of this Note and all of the unpaid interest
accrued thereon may become or be declared due and payable in the manner and with
the effect provided in the Credit Agreement.
No delay or omission on the part of the Bank in exercising any right
hereunder shall operate as a waiver of such right or of any other rights of the
Bank, nor shall any delay, omission or waiver on any one occasion be deemed a
bar or waiver of the same or any other right on any further occasion.
-2-
<PAGE>
The Borrower and every endorser and guarantor of this Note or the
obligation represented hereby waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
NOTE MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY
FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF
SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SECTION 19 OF THE CREDIT AGREEMENT.
THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
This Note shall be deemed to take effect as a sealed instrument under the
laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the undersigned has duly executed this Note as of the
day and year first above written.
ALLIANCE CAPITAL MANAGEMENT L.P.
[Corporate Seal]
By: Alliance Capital Management
Corporation, General Partner
By:____________________________________
Name:
Title:
-3-
<PAGE>
GRID FOR REVOLVING CREDIT LOANS
<TABLE>
<CAPTION>
Amount of Balance of
Amount Principal Paid Principal Notation
Date of Loan or Prepaid Unpaid Made By:
---- ------- -------------- ---------- --------
<S> <C> <C> <C> <C>
__/__/9_ $________ $________ $________ ________
__/__/9_ $________ $________ $________ ________
__/__/9_ $________ $________ $________ ________
__/__/9_ $________ $________ $________ ________
__/__/9_ $________ $________ $________ ________
__/__/9_ $________ $________ $________ ________
__/__/9_ $________ $________ $________ ________
__/__/9_ $________ $________ $________ ________
__/__/9_ $________ $________ $________ ________
__/__/9_ $________ $________ $________ ________
__/__/9_ $________ $________ $________ ________
__/__/9_ $________ $________ $________ ________
__/__/9_ $________ $________ $________ ________
__/__/9_ $________ $________ $________ ________
__/__/9_ $________ $________ $________ ________
__/__/9_ $________ $________ $________ ________
__/__/9_ $________ $________ $________ ________
__/__/9_ $________ $________ $________ ________
__/__/9_ $________ $________ $________ ________
__/__/9_ $________ $________ $________ ________
</TABLE>
-4-
<PAGE>
GRID FOR TERM LOANS
Initial Principal Amount of Term Loan: $______________
<TABLE>
<CAPTION>
Amount of Balance of
Principal Paid Principal Notation
Date or Prepaid Unpaid Made By:
---- -------------- ---------- --------
<S> <C> <C> <C>
__/__/9_ $________ $________ ________
__/__/9_ $________ $________ ________
__/__/9_ $________ $________ ________
__/__/9_ $________ $________ ________
__/__/9_ $________ $________ ________
__/__/9_ $________ $________ ________
__/__/9_ $________ $________ ________
__/__/9_ $________ $________ ________
__/__/9_ $________ $________ ________
__/__/9_ $________ $________ ________
__/__/9_ $________ $________ ________
__/__/9_ $________ $________ ________
__/__/9_ $________ $________ ________
__/__/9_ $________ $________ ________
__/__/9_ $________ $________ ________
__/__/9_ $________ $________ ________
__/__/9_ $________ $________ ________
__/__/9_ $________ $________ ________
__/__/9_ $________ $________ ________
</TABLE>
-5-
<PAGE>
EXHIBIT C to the
CREDIT AGREEMENT
ALLIANCE CAPITAL MANAGEMENT L.P.
__________________________, 199_
The First National Bank
of Boston, as Agent
100 Federal Street
Boston, MA 02110
Attention: _____________________________
Re: Loan Request under the Revolving Credit and Term
Loan Agreement dated as of February 14, 1994
------------------------------------------------
Ladies and Gentlemen:
Please refer to that certain Revolving Credit and Term Loan Agreement dated
as of February 14, 1994 (the "CREDIT AGREEMENT") among Alliance Capital
Management L.P., The First National Bank of Boston, individually and as agent,
and certain other Banks referred to therein. Capitalized terms defined in the
Credit Agreement and used in this letter without definition shall have for
purposes of this letter the meanings assigned to them in the Credit Agreement.
Pursuant to Section 2.6 of the Credit Agreement, we hereby request that a
Revolving Credit Loan consisting of [**an Alternate Base Rate Loan in the
principal amount of $_______________, and/or a Eurodollar Rate Loan in the
principal amount of $_______________ with an Interest Period of ___________**]
be made on _____________________, 199_. We understand that this request is
irrevocable and binding on us and obligates us to accept the requested Loan on
such date.
We hereby certify (a) that the aggregate outstanding principal amount of
the Revolving Credit Loans on today's date is $___________, (b) that the
aggregate principal amount of the Revolving Credit Loans to be outstanding on
the Drawdown Date for the Revolving Credit Loan requested hereby (assuming
disbursement of such Loan and all other Loans requested under outstanding Loan
Requests) will be $_____________, (c) that we will use the proceeds of the
<PAGE>
The First National Bank of Boston, As Agent
____________________, 199_
Page 2
requested Revolving Credit Loan in accordance with the provisions of the Credit
Agreement, (d) that each of the representations and warranties contained in the
Credit Agreement or in any document or instrument delivered pursuant to or in
connection with the Credit Agreement was true as of the date as of which they
were made and is true at and as of the date hereof (except (i) to the extent
that such representations and warranties expressly relate to a prior date, in
which case they were true and correct in all material respects as of such
earlier date, and (ii) to the extent of changes resulting from transactions
contemplated or permitted by the Credit Agreement and the other Loan Documents
and changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse to the undersigned and its Consolidated
Subsidiaries taken as a whole), (e) that no Default or Event of Default has
occurred and is continuing and (f) all conditions precedent to the Loan
requested hereby set forth in Sections 10 and 11 of the Credit Agreement have
been duly satisfied or waived.
Very truly yours,
ALLIANCE CAPITAL MANAGEMENT L.P.
By: Alliance Capital Management
Corporation, General Partner
By:____________________________________
Name:__________________________________
Title:_________________________________
<PAGE>
EXHIBIT D to the
CREDIT AGREEMENT
ALLIANCE CAPITAL MANAGEMENT L.P.
__________________________, 19__
The First National Bank
of Boston, as Agent
100 Federal Street
Boston, MA 02110
Attention: _____________________________
Re: Confirmation of Loan Request under the
Revolving Credit and Term Loan Agreement
dated as of February 14, 1994
----------------------------------------
Ladies and Gentlemen:
Please refer to that certain Revolving Credit and Term Loan Agreement dated
as of February 14, 1994 (the "CREDIT AGREEMENT") among Alliance Capital
Management L.P., The First National Bank of Boston, individually and as agent,
and certain other Banks referred to therein. Capitalized terms defined in the
Credit Agreement and used in this letter without definition shall have for
purposes of this letter the meanings assigned to them in the Credit Agreement.
Pursuant to Section 2.6 of the Credit Agreement, we hereby confirm that a
telephonic request for a Revolving Credit Loan consisting of [**an Alternate
Base Rate Loan in the principal amount of $_______________, and/or a Eurodollar
Rate Loan in the principal amount of $_______________ with an Interest Period of
___________**] to be made on _____________________, 199_ was made by us on
_________________________, 199_. We understand that this request was irrevocable
and binding on us and obligated us to accept the requested Revolving Credit
Loan on such date.
We hereby certify (a) that the aggregate outstanding principal amount of
the Revolving Credit Loans on the date of the request was $___________, (b) that
the aggregate principal amount of the Revolving Credit Loans to be outstanding
on the Drawdown Date for the Revolving Credit Loan requested as described above
(assuming disbursement of such Loan and all other Loans requested under
outstanding
<PAGE>
The First National Bank of Boston, As Agent
____________________, 199_
Page 2
Loan Requests) will be $_____________, (c) that we will use the proceeds of the
requested Revolving Credit Loan in accordance with the provisions of the Credit
Agreement, (d) that each of the representations and warranties contained in the
Credit Agreement or in any document or instrument delivered pursuant to or in
connection with the Credit Agreement was true as of the date as of which they
were made and is true at and as of the date hereof (except (i) to the extent
that such representations and warranties expressly relate to a prior date, in
which case they were true and correct in all material respects as of such
earlier date, and (ii) to the extent of changes resulting from transactions
contemplated or permitted by the Credit Agreement and other Loan Documents and
changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse to the undersigned and its Consolidated
Subsidiaries taken as a whole), (e) that no Default or Event of Default has
occurred and is continuing and (f) all conditions precedent to the Loan
requested as described above that are set forth in Sections 10 and 11 of the
Credit Agreement have been duly satisfied or waived.
Very truly yours,
ALLIANCE CAPITAL MANAGEMENT L.P.
By: Alliance Capital Management
Corporation, General Partner
By:____________________________________
Name:__________________________________
Title:_________________________________
<PAGE>
EXHIBIT E to the
CREDIT AGREEMENT
ALLIANCE CAPITAL MANAGEMENT L.P.
__________________________, 19__
The First National Bank
of Boston, as Agent
100 Federal Street
Boston, MA 02110
Attention: _____________________________
Re: Conversion Request under the Revolving Credit and
Term Loan Agreement dated as of February 14, 1994
-------------------------------------------------
Ladies and Gentlemen:
Please refer to that certain Revolving Credit and Term Loan Agreement dated
as of February 14, 1994 (the "CREDIT AGREEMENT") among Alliance Capital
Management L.P., The First National Bank of Boston, individually and as agent,
and certain other Banks referred to therein. Capitalized terms defined in the
Credit Agreement and used in this letter without definition shall have for
purposes of this letter the meanings assigned to them in the Credit Agreement.
Pursuant to Section 2.7 of the Credit Agreement, we hereby request that the
[**Revolving Credit, or Term**] Loan consisting of [**an Alternate Base Rate
Loan in the principal amount of $_______________, and/or a Eurodollar Rate Loan
in the principal amount of $_______________ with an Interest Period of
___________ ending on _____________________, 199_**] currently in effect be
converted to [**an Alternate Base Rate Loan in principal amount of $__________,
or a Eurodollar Rate Loan in principal amount of $______________ with an
Interest Period of ________________**] on ____________________, 199_. We
understand that this request is irrevocable and binding on us.
We hereby certify (a) that the aggregate outstanding principal amount of
the [**Revolving Credit Loans, or Term Loan**] on today's date is $___________,
(b) upon giving effect to the request set forth in this letter (and any other
<PAGE>
The First National Bank of Boston, As Agent
____________________, 199_
Page 2
outstanding conversion requests under the Credit Agreement) there will be
outstanding Eurodollar Rate Loans having ____ different Interest Periods, (c) if
this letter requests conversion of an Alternate Base Rate Loan to a Eurodollar
Rate Loan or continuation of a Eurodollar Rate Loan as such, that no Default or
Event of Default has occurred and is continuing and (d) the requests set forth
in this letter are made in accordance with the terms and conditions of the
Credit Agreement.
Very truly yours,
ALLIANCE CAPITAL MANAGEMENT L.P.
By: Alliance Capital Management
Corporation, General Partner
By:____________________________________
Name:__________________________________
Title:_________________________________
<PAGE>
EXHIBIT F to the
CREDIT AGREEMENT
ALLIANCE CAPITAL MANAGEMENT L.P.
__________________________, 19__
The First National Bank
of Boston, as Agent
100 Federal Street
Boston, MA 02110
Attention: _____________________________
Re: Confirmation of Conversion Request under the Revolving Credit and Term
Loan Agreement dated as of February 14, 1994
----------------------------------------------------------------------
Ladies and Gentlemen:
Please refer to that certain Revolving Credit and Term Loan Agreement dated
as of February 14, 1994 (the "CREDIT AGREEMENT") among Alliance Capital
Management L.P., The First National Bank of Boston, individually and as agent,
and certain other Banks referred to therein. Capitalized terms defined in the
Credit Agreement and used in this letter without definition shall have for
purposes of this letter the meanings assigned to them in the Credit Agreement.
Pursuant to Section 2.7 of the Credit Agreement, we hereby confirm our
telephonic request that the [**Revolving Credit, or Term Loan**] consisting of
[**an Alternate Base Rate Loan in the principal amount of $_______________,
and/or a Eurodollar Rate Loan in the principal amount of $_______________ with
an Interest Period of ___________ ending on _____________________, 199_**] in
effect at the time of such request be converted to [**an Alternate Base Rate
Loan in principal amount of $______________, or a Eurodollar Rate Loan in
principal amount of $______________, with an Interest Period of ____________**]
on ____________________, 199_. We understand that this request was irrevocable
and binding on us.
<PAGE>
The First National Bank of Boston, As Agent
____________________, 199_
Page 2
We hereby certify (a) that the aggregate outstanding principal amount of
the [**Revolving Credit Loans, or Term Loan**] on today's date is $___________,
(b) upon giving effect to the request confirmed in this letter (and any other
outstanding conversion requests under the Credit Agreement) there will be
outstanding Eurodollar Rate Loans having ____ different Interest Periods, (c) if
this letter confirms a request for conversion of an Alternate Base Rate Loan to
a Eurodollar Rate Loan or continuation of a Eurodollar Rate Loan as such, that
no Default or Event of Default has occurred and is continuing and (d) the
requests confirmed in this letter were made in accordance with the terms and
conditions of the Credit Agreement.
Very truly yours,
ALLIANCE CAPITAL MANAGEMENT L.P.
By: Alliance Capital Management
Corporation, General Partner
By:____________________________________
Name:__________________________________
Title:_________________________________
<PAGE>
EXHIBIT G to
CREDIT AGREEMENT
[ALLIANCE CAPITAL MANAGEMENT L.P. LETTERHEAD]
The First National Bank of
Boston, as Agent
100 Federal Street
Boston, Massachusetts 02110
Each of the Banks as defined in the
Credit Agreement referred to below
Attention: _________________
Re: Compliance Certificate under Revolving Credit and Term
Loan Agreement dated as of February 14, 1994
------------------------------------------------------
Ladies and Gentlemen:
Please refer to that certain Revolving Credit and Term Loan Agreement dated
as of February 14, 1994 (the "CREDIT AGREEMENT") among Alliance Capital
Management L.P., The First National Bank of Boston, individually and as agent,
and certain other Banks referred to therein. Capitalized terms defined in the
Credit Agreement and used in this certificate without definition shall have
for purposes of this certificate the meanings assigned to them in the Credit
Agreement.
This is a certificate delivered pursuant to Section 7.4(c) of the Credit
Agreement with respect to compliance with the financial covenants as set forth
in Section 9 of the Credit Agreement. This certificate has been duly executed
by the principal financial or accounting officer of the Borrower.
1. NO DEFAULT. To the best of the knowledge and belief of the
undersigned, no Default or Event of Default has occurred and is continuing under
the Credit Agreement. Attached hereto as APPENDIX I are all relevant
calculations setting forth the Borrower's compliance with Sections 9.1 through
9.3, inclusive, of the Credit Agreement as at the end of or, if required,
during the [**annual or quarterly**] period covered by the financial statements
delivered herewith, together with the reconciliations to reflect changes, if
any, in generally accepted accounting principles since the Balance Sheet Date.
<PAGE>
The First National Bank of Boston, as Agent
____________ __, 199_.
Page 2
2. FINANCIAL STATEMENTS. Together with this Certificate, the Borrower is
delivering to the Agent the financial statements required pursuant to Section
7.4 of the Credit Agreement. [Also delivered herewith is a reconciliation of
the covenant calculations and the financial statements of the Borrower to the
extent they differ as the result of changes in generally accepted accounting
principles since the Balance Sheet Date.]
IN WITNESS WHEREOF, the undersigned has signed this certificate as an
instrument under seal on this _______ day of ____________, 199_.
ALLIANCE CAPITAL MANAGEMENT L.P.
By: Alliance Capital Management
Corporation, General Partner
By: ___________________________________
Name:
Title:
<PAGE>
APPENDIX I
COMPLIANCE CERTIFICATE WORKSHEET
_________________, 199_
OPERATING COVERAGE RATIO (Section 9.1) From___to___
(1) Consolidated Adjusted Cash Flow:
(a) (i) EBITDA:
(A) Consolidated Net Income (Loss) $___________
(B) Taxes ___________
(C) Interest ___________
(D) Depreciation ___________
(E) Amortization ___________
(F) EBITDA ___________
(the sum of (A) through (E))
(ii) Non-cash charges (excluding
depreciation and amortization) to the
extent deducted from Consolidated Net
Income ___________
(iii) Subtotal ((i) (F) PLUS (ii)) ___________
(b) Brokerage commissions paid
in connection with "B" share sales
(net of contingent deferred sales
charges from redemptions of such
"B" shares) ___________
(c) Consolidated Adjusted Cash Flow $___________
((a) (iii) MINUS (b))
(2) Consolidated Fixed Charges:
(a) Interest Installments on Funded Debt $___________
(b) Scheduled Principal Installments on Funded Debt
Funded Debt (including non-contingent
amounts payable in respect of certain
keepwell obligations) ___________
(c) Cash Taxes ___________
(d) Capital Expenditures ___________
(e) Rental payments and scheduled
installments under Capitalized Leases ___________
(f) Consolidated Fixed Charges $___________
(the sum of (a) through (e))
<PAGE>
-2-
Ratio of (1) (c) to (2)(f) ___________
Required Ratio Covenant 1.25:1
-----------
TOTAL COVERAGE RATIO (SECTION 9.2) From__to____
(1) Total Available Cash:
(a) Consolidated Adjusted Cash Flow $___________
(from 1(c) above)
(b) At the start of the fiscal period
(i) lesser of (x) Working Capital Reserve
and (y) sum of Cash and Cash Equivalents
PLUS Readily Marketable Securities as
reduced by (ii) EXCESS of (A) Amounts
Payable to Affiliated Funds for Shares
Purchases OVER (B) Receivables from
Brokers for Sale of Fund Shares ___________
(c) Total Commitment MINUS aggregate amount
of Revolving Credit Loans outstanding
(each as of the first day of the period or,
if later, the Closing Date)1/ ___________
(d) Cash proceeds from Unit Sales and
exercises of options to buy Units
(net of selling commissions and
offering expenses) ___________
(e) Total Available Cash $___________
(sum of (a), (b), (c) and (d))
- - ------------------------
1/ Calculation (c) is included only if the first day of the period being
reported is prior to the Revolving Credit Loan Maturity Date.
<PAGE>
-3-
(2) Total Payments:
(a) Consolidated Fixed Charges
(from 2(f) above) $___________
(b) Mandatory Principal Installments on
Funded Debt (except scheduled
installments included in
Consolidated Fixed Charges) ___________
(c) Mandatory payments under
Capitalized Leases
(except rental payments and
scheduled installments
included in Consolidated
Fixed Charges) ___________
(d) Voluntary prepayments of principal
of Funded Debt ___________
(e) Distributions Paid ___________
(f) Cash payments for Acquisitions ___________
(g) Total Payments $___________
(sum of (a) through (f))
Ratio of (1)(e) to (2) (g) ___________
Required Ratio 1.00:1
-----------
Ratio of Funded Debt to Adjusted Cash Flow (Section 9.3) At December 31, 199_
- - --------------------------------------------------------
(1) Consolidated Adjusted Funded Debt:
(a) Aggregate principal of Funded Debt $___________
on a consolidated basis
(b) Aggregate principal of Funded Debt
owed to any Consolidated
Subsidiary that is not a
Restricted Subsidiary ___________
(c) Consolidated Adjusted Funded Debt $___________
((a) PLUS (b))
<PAGE>
-4-
(2) Consolidated Adjusted Cash Flow2/ $___________
(a) (i) EBITDA:
(A) Consolidated Net Income (Loss) $___________
(B) Taxes ___________
(C) Interest ___________
(D) Depreciation ___________
(E) Amortization ___________
(F) EBITDA ___________
(the sum of (A) through (E))
(ii) Non-cash charges (excluding
depreciation and amortization) to the
extent deducted from Consolidated Net
Income ___________
(iii) Subtotal ((i) (F) PLUS (ii)) ___________
(b) Brokerage commissions paid
in connection with "B" share sales
(net of contingent deferred sales
charges from redemptions of such
"B" shares) ___________
(c) Consolidated Adjustment Cash Flow $___________
((a) (iii) MINUS (b))
Ratio of (1) to (2) ___________
Required Ratio On or prior to 6/30/94 2.15:1
After 6/30/94 2.00:1
-----------
- - ------------------------
2/ The following calculation is to be used only if the calculation of
Consolidated Adjusted Cash Flow for the purposes of the ratio of Funded Debt to
Adjusted Cash Flow will be different from that reported in subpart (1) under the
section entitled "Operating Coverage Ratio."
<PAGE>
EXHIBIT H to
CREDIT AGREEMENT
ASSIGNMENT AND ACCEPTANCE
Dated as of _____________, 19__
Reference is made to the Revolving Credit and Term Loan Agreement, dated
as of February __, 1994 (as from time to time amended and in effect, the
"CREDIT AGREEMENT"), by and among Alliance Capital Management L.P., a Delaware
limited partnership (the "BORROWER"), the banking institutions referred to
therein as Banks (collectively, the "BANKS") and The First National Bank of
Boston, as agent for the Banks (in such capacity, the "AGENT"). Capitalized
terms used herein and not otherwise defined shall have the meanings assigned
to such terms in the Credit Agreement.
__________________ (the "ASSIGNOR") and __________________ the ("ASSIGNEE")
hereby agree as follows:
1. Subject to the terms and conditions of this Assignment and Acceptance,
the Assignor hereby sells and assigns to the Assignee, and the Assignee hereby
purchases and assumes without recourse to the Assignor, a $________ interest
in and to the rights, benefits, indemnities, and obligations of the Assignor
under the Credit Agreement equal to _____% in respect of the Total Commitment
immediately prior to the Effective Date (as hereinafter defined).
2. The Assignor (a) represents and warrants that (i) it is legally
authorized to enter into this Assignment and Acceptance, (ii) as of the date
hereof, its Commitment is $________, its Commitment Percentage is _____%, and
the aggregate outstanding principal balance of its Loans equals $________,
(in each case after giving effect to the assignment contemplated hereby but
without giving effect to any contemplated assignments which have not yet become
effective), and (iii) immediately after giving effect to all assignments which
have not yet become effective, the Assignor's Commitment Percentage will be
sufficient to give effect to this Assignment and Acceptance, (b) makes no
representation or warranty, express or implied, and assumes no responsibility
with respect to any statements, warranties, or representations made in or in
connection with the Credit Agreement or any of the other Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency, or
value of the Credit Agreement, the other Loan Documents or any other instrument
or document
<PAGE>
furnished pursuant thereto or the attachment, perfection, or priority of any
Lien, other than that it is the legal and beneficial owner of the interest
being assigned by it hereunder free and clear of any Lien; (c) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, any Other Obligor, or any other Person
primarily or secondarily liable in respect of any of the Obligations, or the
performance or observance by the Borrower, any Other Obligor, or any other
Person primarily or secondarily liable in respect of any of the Obligations of
any of its obligations under the Credit Agreement or any of the other Loan
Documents or any other instrument or document delivered or executed pursuant
thereto; and (d) attaches hereto the Note delivered to it under the Credit
Agreement.
The Assignor requests that the Borrower exchange the Assignor's Note for
new Notes payable to the Assignor and the Assignee as follows:
<TABLE>
<CAPTION>
Notes Payable to
the Order of: Amount of Note
---------------- --------------
<S> <C>
Assignor $_____________
Assignee $_____________
</TABLE>
3. The Assignee (a) represents and warrants that (i) it is duly and
legally authorized to enter into this Assignment and Acceptance, (ii) the
execution, delivery, and performance of this Assignment and Acceptance do not
conflict with any Government Mandate, the charter or by-laws of the Assignee,
or any Contract binding on the Assignee, (iii) all acts, conditions, and
things required to be done and performed and to have occurred prior to the
execution, delivery, and performance of this Assignment and Acceptance, and
to render the same the legal, valid, and binding obligation of the Assignee,
enforceable against it in accordance with its terms, have been done and
performed and have occurred in due and strict compliance with all applicable
Government Mandates; (b) confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 7.4 (a) and (b) thereof and such other documents
and information as it has deemed appropriate to make its own credit analysis
and decision to enter into this Assignment and Acceptance; (c) agrees that it
will,
-2-
<PAGE>
independently and without reliance upon the Assignor, the Agent or any other
Bank and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not
taking action under the Credit Agreement; (d) represents and warrants that it
is an Eligible Assignee; (e) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under the Credit
Agreement and the other Loan Documents as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
and (f) agrees that it will perform in accordance with their terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Bank.
4. The effective date for this Assignment and Acceptance shall be
________________, 19__ (the "EFFECTIVE DATE"). Following the execution of this
Assignment and Acceptance and if required, the consent of the Borrower hereto,
each party hereto shall deliver its duly executed counterpart hereof to the
Agent for acceptance by the Agent and recording in the Register by the Agent.
SCHEDULE 1 to the Credit Agreement shall thereupon be replaced as of the
Effective Date by the SCHEDULE 1 annexed hereto.
5. Upon such acceptance and recording, from and after the Effective Date,
(a) the Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of
a Bank thereunder, and (b) the Assignor shall, with respect to that portion of
its interest under the Credit Agreement assigned hereunder, relinquish its
rights and be released from its obligations under the Credit Agreement;
PROVIDED, HOWEVER, that the Assignor shall retain its rights to be indemnified
pursuant to Sections 5.8, 5.9, 5.11, 15 and 16 of the Credit Agreement with
respect to any claims or Proceedings arising prior to the Effective Date (and
without limiting any other rights of Assignee, Assignee shall also be entitled
to indemnity thereunder for such Proceedings).
6. Upon such acceptance of this Assignment and Acceptance by the Agent
and such recording, from and after the Effective Date, the Agent shall make all
payments in respect of the rights and interests assigned hereby (including
payments of principal, interest, fees, and other amounts) to the Assignee. The
Assignor and the Assignee shall make any appropriate adjustments in payments
for periods prior to the Effective Date by the Agent or with respect to the
making of this assignment directly between themselves.
-3-
<PAGE>
7. THIS ASSIGNMENT AND ACCEPTANCE IS INTENDED TO TAKE EFFECT AS A SEALED
INSTRUMENT TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE COMMONWEALTH OF MASSACHUSETTS (WITHOUT REFERENCE TO CONFLICT OF LAWS).
8. This Assignment and Acceptance may be executed in any number of
counterparts which shall together constitute but one and the same agreement.
IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused this Assignment and Acceptance to be executed on its behalf by its
officer thereunto duly authorized, as of the date first above written.
[THE ASSIGNOR]
By:______________________________________
Title:________________________________
[THE ASSIGNEE]
By:______________________________________
Title:________________________________
CONSENTED TO:
ALLIANCE CAPITAL MANAGEMENT L.P.
By: Alliance Capital Management
Corporation, General Partner
By:_________________________________
Title:___________________________
THE FIRST NATIONAL BANK OF BOSTON,
as Agent
By:_________________________________
Title:___________________________
-4-
<PAGE>
EXHIBIT I
[Letterhead: Seward & Kissel]
February 22, 1994
Addressed to Each of the Parties
Listed on the Attached Schedule 1
$100,000,000 Revolving Credit and Term Loan Agreement dated as of
February 14, 1994 among Alliance Capital Management L.P., the
Banks which are parties thereto and THE FIRST NATIONAL BANK OF
BOSTON AS AGENT
Ladies and Gentlemen:
We are acting as counsel for Alliance Capital Management L.P., a
Delaware limited partnership (the "Company"), in connection with the Revolving
Credit and Term Loan Agreement dated as of February 14, 1994 (the "Agreement")
entered into among the Company, each of the Banks which are parties thereto,
and The First National Bank of Boston, as Agent. This opinion is being
delivered pursuant to Section 10.6 of the Agreement.
Except as otherwise herein defined, each of the terms used in this
opinion which is defined in the Agreement is used herein as defined therein.
As counsel to the Company, we have examined and relied, as to factual
matters (but not as to any question of law), upon originals, or copies certified
to our satisfaction, of such records, documents, certificates of the Company and
of public officials and other instruments,
<PAGE>
February 22, 1994
Page 2
and made such other inquiries, as, in our judgment, are necessary or appropriate
to enable us to render the opinion expressed below. We have assumed the
genuineness of all signatures and the conformity to originals of all certified
copies. We have relied on the representations and warranties set forth in the
Agreement as to factual matters (but not as to any question of law). We have
also assumed that the information contained in certificates of public officials
which we have relied upon to render the opinion expressed below, and which
certificates are dated a date reasonably near the date hereof, is still true and
accurate as of the date hereof. We have further assumed, with your permission,
that each party to the Agreement, other than the Company and Alliance Capital
Management Corporation, the general partner of the Company (the "General
Partner"), is duly organized and validly existing, has full power and authority
to enter into and perform its obligations under the Agreement, and has duly
authorized, executed and delivered the Agreement, which Agreement constitutes
their legal, valid and binding contract and agreement.
Based on the foregoing, we are of the opinion that:
1. The Company is a limited partnership, duly organized and validly
existing under the laws of the State of Delaware, has the power and authority
and is duly authorized to enter into and perform the Agreement and to issue
the Notes thereunder, and is duly qualified and is in good standing as a
foreign partnership in the State of New York.
2. The General Partner is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, has
corporate power and authority and is duly authorized to act as general partner
of the Company and to execute and deliver the Agreement and the Notes on
behalf of the Company, and is duly qualified and in good standing as a foreign
corporation in the State of New York.
3. The Agreement has been duly authorized, executed and delivered by
the Company and constitutes the legal, valid and binding contract and
agreement of the Company enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
fraudulent transfer and similar laws affecting creditors' rights generally,
and general principles of equity (regardless of whether the application
<PAGE>
February 22, 1994
Page 3
of such principles in considered in a proceeding in equity or at law).
4. The Notes issued on the date hereof have been duly authorized,
executed and delivered by the Company and constitute, and any Note issued
hereafter to an assignee pursuant to Section 18 of the Agreement (assuming due
execution and delivery of the Note issued to the assignee, a legal, valid,
binding and enforceable assignment, compliance with all of the provisions of the
Agreement and no change in applicable law or circumstances, including without
limitation no change in the status of the assignee being in all relevant
respects the same as the status of the Banks which are originally parties to the
Agreement) will constitute, the legal, valid and binding obligations of the
Company enforceable in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent
transfer and other similar laws affecting creditors' rights generally, and
general principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
5. No approval or consent on the part of, or filing with, any
Federal or Delaware or New York State governmental body is necessary in
connection with the execution, delivery and performance of the Agreement or
the Notes (it being understood that no opinion is expressed with respect to
compliance with any Federal or State securities laws).
6. The execution, delivery and performance by the Company of the
Agreement and the Notes do not conflict with or result in any breach of any of
the provisions of, or constitute a default under, (a) the Agreement of Limited
Partnership or the Certificate of Limited Partnership of the Company, (b) the
Certificate of Incorporation or By-laws of the General Partner, (c) any of the
Note Agreements dated as of January 15, 1992, as amended, or, to our
knowledge, without having undertaken any investigation for purposes of this
opinion, any other agreement to which the Company is a party, except where the
conflict, breach or default would not be likely to have a Material Effect, or
(d) any Federal or Delaware or New York State law or regulation applicable to
the Company, the General Partner or their respective property.
<PAGE>
February 22, 1994
Page 4
7. The Company is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended. Alliance Distributors is
registered as a broker-dealer under the Securities Exchange Act of 1934, as
amended, and is a member in good standing of the National Association of
Securities Dealers, Inc. Neither the Company nor any of its Subsidiaries is a
"holding company" or a "subsidiary company" of a "holding company" as those
terms are defined in the Public Utility Holding Company Act of 1935, as amended.
The Company is not an "investment company", as that term is defined in the
Investment Company Act of 1940, as amended.
8. To our knowledge, without having undertaken any investigation for
purposes of this opinion, there is no Proceeding pending or threatened against
the Company, any of its Subsidiaries or the General Partner that questions the
validity of (a) the Agreement or the Notes, or (b) any Permits of the Borrower
or its Subsidiaries or any 12b-1 Fee plan or arrangement which is likely to have
a Material Effect.
We are members of the bar of the State of New York. This opinion is
limited to the laws of the State of New York , the Delaware Revised Uniform
Limited Partnership Act, the corporate laws of the State of Delaware and the
Federal laws of the United States of America. We have assumed in this opinion
that the laws of the Commonwealth of Massachusetts (by which the Agreement and
the Notes are stated to be governed) are the same as the laws of the State of
New York insofar as they relate to the enforceability of the Agreement and the
Notes.
This opinion is given only as of its date, and we have no obligation
to notify you of the effect of any change in law or circumstances which may
occur after the date hereof.
This opinion is addressed to you in connection with the closing under
the Agreement and may not be relied upon by you for any other purpose or
furnished to or relied upon by any other person for any purpose (other than
being (i) furnished to your regulators, auditors and legal counsel in connection
with the closing under the Agreement and (ii) furnished to and relied upon by a
subsequent assignee of the Agreement and a Note solely for the purpose of such
assignment, and subject in any case to the immediately
<PAGE>
February 22, 1994
Page 5
preceding paragraph and to the parenthetical assumptions in the paragraph
numbered 4 above) without our prior written consent.
Very truly yours,
/s/ Seward & Kissel
<PAGE>
February 22, 1994
Page 6
SCHEDULE 1
The First National Bank of Boston,
individually and as Agent
100 Federal Street
Boston, Massachusetts 02110
The Chase Manhattan Bank, N.A.
Insurance Division, Concourse Level
1285 Sixth Avenue
New York, New York 10019
The Bank of New York
One Wall Street
New York, New York 10286
Nationsbank of Georgia
Securities Industry Group - 21st Floor
600 Peachtree Street, NE
Atlanta, Georgia 30308-2213
Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, New York 10260-0060
<PAGE>
Page 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
--------------------------------
I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
LIMITED PARTNERSHIP OF "ALLIANCE CAPITAL MANAGEMENT L.P.", FILED IN THIS OFFICE
ON THE EIGHTEENTH DAY OF NOVEMBER, A.D. 1987, AT 2:30 O'CLOCK P.M.
/s/ WILLIAM T. QUILLEN
----------------------------------------
WILLIAM T. QUILLEN, SECRETARY OF STATE
2143943 8100 AUTHENTICATION: 7023258
944016549 DATE: 02-08-94
<PAGE>
ALLIANCE CAPITAL MANAGEMENT L.P.
CERTIFICATE OF LIMITED PARTNERSHIP
(pursuant to Section 17-201)
1. The name of the limited partnership is Alliance Capital
Management L.P. (the "Partnership").
2. The registered office of the Partnership is located in New Castle
County at 1209 Orange Street, Wilmington, Delaware 19801. The name of the
registered agent for service of process at such office is The Corporation Trust
Company.
3. The sole general partner of the Partnership is Alliance Capital
Management Corporation whose address is 1345 Avenue of the Americas, New York,
New York, 10105.
IN WITNESS WHEREOF, the undersigned has executed this certificate as
the General Partner of the Partnership as of this 18th day of November, 1987.
GENERAL PARTNER:
ALLIANCE CAPITAL MANAGEMENT
CORPORATION
By: /s/
---------------------------------
Executive Vice President
<PAGE>
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
--------------------------------
I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "ALLIANCE CAPITAL MANAGEMENT L.P", FILED IN THIS OFFICE ON THE
TWELFTH DAY OF DECEMBER, A.D. 1991, AT 1:32 O'CLOCK P.M.
/s/ WILLIAM T. QUILLEN
---------------------------------------
WILLIAM T. QUILLEN, SECRETARY OF STATE
2143943 8100 AUTHENTICATION: 7023259
944016549 DATE: 02-08-94
<PAGE>
12-12-91
ALLIANCE CAPITAL MANAGEMENT L.P.
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF LIMITED PARTNERSHIP
(PURSUANT TO SECTION 17-202)
1. The name of the limited partnership is Alliance Capital
Management L.P. (the "Partnership").
2. Alliance Capital Management Corporation is withdrawing as the
Partnership's general partner. The new general partner is Alliance GP
Incorporated whose address is 1345 Avenue of the Americas, New York, New York
10105.
3. The corporate name of Alliance GP Incorporated, the general
partner of the Partnership, has been amended to Alliance Capital Management
Corporation.
IN WITNESS WHEREOF, the undersigned has executed this certificate
as the General Partner of the Partnership as of this 12th day of December, 1991.
GENERAL PARTNER:
ALLIANCE CAPITAL MANAGEMENT
CORPORATION
By: /s/ DAVID R. BREWER
--------------------------------
Senior Vice President
<PAGE>
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
--------------------------------
I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION OF "ALLIANCE GP INCORPORATED", FILED IN THIS OFFICE ON THE FIFTH
DAY OF SEPTEMBER, A.D. 1991, AT 3 O'CLOCK P.M.
/s/ WILLIAM T. QUILLEN
--------------------------------------
WILLIAM T. QUILLEN, SECRETARY OF STATE
2272830 8100 AUTHENTICATION: 7023255
944016548 DATE: 02-08-94
<PAGE>
CERTIFICATE OF INCORPORATION
OF
ALLIANCE GP INCORPORATED
Pursuant to the General Corporation Law
of the State of Delaware
FIRST: The name of the Corporation is Alliance GP Incorporated (hereinafter
called the "Corporation").
SECOND: The location of the registered office of the Corporation in the
State of Delaware is 1209 Orange Street, in the City of Wilmington, County of
New Castle. The name of its registered agent at that address is The Corporation
Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH: The total number of shares of all classes of capital stock which
the Corporation shall have authority to issue is one thousand shares of Common
Stock of the par value of one cent ($.01) per share.
FIFTH: Election of directors need not be by written ballot unless the
By-Laws so provide.
SIXTH: In furtherance and not in limitation of the powers conferred by law,
the Board of Directors of the
<PAGE>
Corporation is expressly authorized:
(a) To make, alter, amend or repeal the By-Laws of the Corporation.
(b) To direct and determine the use and disposition of net profits or
net assets in excess of capital; to set apart out of any of the funds of
the Corporation available for dividends a reserve or reserves for any
proper purpose; and to abolish any such reserve in the manner in which it
was created.
(c) To establish bonus, profit-sharing, stock option, retirement or
other types of incentive or compensation plans for the employees (including
officers and directors) of the Corporation and its subsidiaries and to fix
the amount of the profits to be distributed or shared and to determine the
persons to participate in any such plans and the amounts of their
respective participations.
(d) From time to time to determine whether and to what extent, and at
what time and places and under what conditions and regulations, the
accounts and books of the Corporation (other than the stock ledger), or any
of them, shall be open to the inspection of the stockholders; and no
stockholder shall have any right to inspect any account or book or document
of the Corporation, except as conferred by statute or authorized by the
Board of Directors or by a resolution of the stockholders.
(e) To authorize, and cause to be executed mortgages and liens upon
the real and personal property of the Corporation.
SEVENTH: The name of the initial director of the Corporation who shall
serve until the first annual meeting of stockholders or until his successor is
duly chosen and qualifies is David R. Brewer, Jr. and his address is 1345 Avenue
of the Americas, New York, New York 10105.
2
<PAGE>
EIGHTH: A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived an improper
personal benefit. If the Delaware General Corporation Law is hereafter amended
to authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended. Any repeal or modification of this
Article EIGHTH by the stockholders of the Corporation shall not adversely affect
any right or protection of a director of the Corporation existing at the time of
such repeal or modification.
NINTH: Subject to Article EIGHTH, no person shall be liable to the
Corporation for any loss or damage suffered by it on account of any action taken
or omitted to be taken by him as a director or officer of the Corporation in
good
3
<PAGE>
faith, if such person (i) exercised or used the same degree of diligence, care
and skill as an ordinarily prudent man would have exercised or used under the
circumstances in the conduct of his own affairs, or (ii) took, or omitted to
take, such action in reliance upon advice of counsel for the Corporation, or
upon statements made or information furnished by officers or employees of the
Corporation which he had reasonable grounds to believe to be true, or upon a
financial statement of the Corporation prepared by an officer or employee of the
Corporation in charge of its accounts or certified by a public accountant or
firm of public accountants.
TENTH: The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation in the manner now
or hereafter prescribed by law, and all rights and powers conferred herein on
stockholders and directors are subject to this reserved power.
ELEVENTH: The name of the incorporator is Patricia A. Poglinco and her
mailing address is One Battery Park Plaza, New York, New York 10004.
4
<PAGE>
IN WITNESS WHEREOF, the undersigned, being the incorporator hereinbefore
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, does make this certificate this 5th
day of September, 1991.
/s/ PATRICIA A. POGLINCO
----------------------------------
Patricia A. Poglinco
5
<PAGE>
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
--------------------------------
I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "ALLIANCE GP INCORPORATED", CHANGING ITS NAME FROM "ALLIANCE GP
INCORPORATED" TO "ALLIANCE CAPITAL MANAGEMENT CORPORATION", FILED IN THIS
OFFICE ON THE TWELFTH DAY OF DECEMBER, A.D. 1991, AT 1:31 O'CLOCK P.M.
/s/ WILLIAM T. QUILLEN
---------------------------------------
WILLIAM T. QUILLEN, SECRETARY OF STATE
2272830 8100 AUTHENTICATION: 7023256
944016548 DATE: 02-08-94
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
* * * * *
Alliance GP Incorporated, a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of said corporation, by the unanimous
action of its members at a regular meeting adopted a resolution proposing and
declaring advisable the following amendment to the Certificate of Incorporation
of said corporation:
RESOLVED, that the Certificate of Incorporation of Alliance GP
Incorporated be amended by changing the First Article thereof so that,
as amended, said Article shall be and read as follows:
"The name of the Corporation is Alliance Capital Management
Corporation (hereinafter called the "Corporation")."
SECOND: That in lieu of a meeting and vote of the stockholder, the sole
stockholder has consented to said amendment in accordance with the provisions of
Section 228 of the General Corporation Law of the State of Delaware.
<PAGE>
THIRD: That the aforesaid amendment was duly adopted in accordance with the
applicable provisions of Section 242 and 228 of the General Corporation Law of
the State of Delaware.
IN WITNESS WHEREOF, said Alliance GP Incorporated has caused this certificate
to be signed by David R. Brewer, Jr., its Senior Vice President and attested by
Christine W. Manfre, its Assistant Secretary, this 12th day of December, 1991.
ALLIANCE GP INCORPORATED
By /s/ DAVID R. BREWER
--------------------------------------
Senior Vice President
ATTEST:
By /s/ CHRISTINE W. MANFRE
-------------------------------
Assistant Secretary
2
<PAGE>
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THAT "ALLIANCE CAPITAL MANAGEMENT L.P." IS DULY FORMED UNDER THE
LAWS OF THE STATE OF DELAWARE AND IS IN GOOD STANDING AND HAS A LEGAL EXISTENCE
NOT HAVING BEEN CANCELLED OR REVOKED SO FAR AS THE RECORDS OF THIS OFFICE SHOW
AND IS DULY AUTHORIZED TO TRANSACT BUSINESS.
THE FOLLOWING DOCUMENTS HAVE BEEN FILED:
CERTIFICATE OF LIMITED PARTNERSHIP, FILED THE EIGHTEENTH DAY OF NOVEMBER,
A.D. 1987, AT 2:30 O'CLOCK P.M.
CERTIFICATE OF AMENDMENT, FILED THE TWELFTH DAY OF DECEMBER, A.D. 1991, AT
1:32 O'CLOCK P.M.
AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CERTIFICATES ARE THE
ONLY CERTIFICATES ON RECORD OF THE AFORESAID LIMITED PARTNERSHIP.
AND I DO HEREBY FURTHER CERTIFY THAT THE ANNUAL TAXES HAVE BEEN PAID TO
DATE.
/s/ WILLIAM T. QUILLEN
--------------------------------------
WILLIAM T. QUILLEN, SECRETARY OF STATE
2143943 8310 AUTHENTICATION: 7023260
944016549 DATE: 02-08-94
<PAGE>
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THAT "ALLIANCE CAPITAL MANAGEMENT CORPORATION" IS DULY
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE AND IS IN GOOD STANDING AND
HAS A LEGAL CORPORATE EXISTENCE NOT HAVING BEEN CANCELLED OR DISSOLVED SO FAR AS
THE RECORDS OF THIS OFFICE SHOW AND IS DULY AUTHORIZED TO TRANSACT BUSINESS.
THE FOLLOWING DOCUMENTS HAVE BEEN FILED:
CERTIFICATE OF INCORPORATION, FILED THE FIFTH DAY OF SEPTEMBER, A.D. 1991,
AT 3 O'CLOCK P.M.
CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM "ALLIANCE GP INCORPORATED"
TO "ALLIANCE CAPITAL MANAGEMENT CORPORATION", FILED THE TWELFTH DAY OF DECEMBER,
A.D. 1991, AT 1:31 O'CLOCK P.M.
AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CERTIFICATES ARE THE
ONLY CERTIFICATES ON RECORD OF THE AFORESAID CORPORATION.
AND I DO FURTHER CERTIFY THAT THE ANNUAL REPORTS HAVE BEEN FILED TO DATE.
AND I DO HEREBY FURTHER CERTIFY THAT THE FRANCHISE TAXES
/s/ WILLIAM T. QUILLEN
----------------------------------------
WILLIAM T. QUILLEN, SECRETARY OF STATE
2272830 8310 AUTHENTICATION: 7023257
944016548 DATE: 02-08-94
<PAGE>
PAGE 2
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
--------------------------------
HAVE BEEN PAID TO DATE.
/s/ WILLIAM T. QUILLEN
----------------------------------------
WILLIAM T. QUILLEN, SECRETARY OF STATE
2272830 8310 AUTHENTICATION: 7023257
944016548 DATE: 02-08-94
SECRETARY OF STATE
199402090021
<PAGE>
STATE OF NEW YORK )
) SS:
DEPARTMENT OF STATE )
I HEREBY CERTIFY, THAT ALLIANCE CAPITAL MANAGEMENT L.P. A DELAWARE LIMITED
PARTNERSHIP, FILED AN APPLICATION FOR AUTHORITY OF LIMITED PARTNERSHIP PURSUANT
TO ARTICLE 8-A OF THE PARTNERSHIP LAW, ON 04/20/1988, AND SO FAR AS SHOWN BY THE
RECORDS OF THIS DEPARTMENT IS AUTHORIZED TO DO BUSINESS UNDER THE LAWS OF THE
STATE OF NEW YORK.
***
WITNESS MY HAND AND THE OFFICIAL SEAL
OF THE DEPARTMENT OF STATE AT THE CITY
OF ALBANY, THIS 08TH DAY OF FEBRUARY
ONE THOUSAND NINE HUNDRED AND
NINETY-FOUR.
SECRETARY OF STATE
199492090021
<PAGE>
STATE OF NEW YORK )
) SS:
DEPARTMENT OF STATE )
I HEREBY CERTIFY, THAT ALLIANCE GP INCORPORATED A DELAWARE CORPORATION, FILED
AN APPLICATION FOR AUTHORITY TO DO BUSINESS IN THE STATE OF NEW YORK ON
11/07/1991.
A CERTIFICATE CHANGING NAME TO ALLIANCE CAPITAL MANAGEMENT CORPORATION WAS FILED
WITH THIS OFFICE ON 12/16/1991.
THE STATEMENT OF ADDRESSES AND DIRECTORS IS PAST DUE.
I FURTHER CERTIFY THAT NO CERTIFICATE OF SURRENDER OF AUTHORITY HAS BEEN FILED,
AND SO FAR AS SHOWN BY THE RECORDS OF THIS DEPARTMENT, SUCH CORPORATION IS STILL
AUTHORIZED TO DO BUSINESS IN THE STATE OF NEW YORK.
***
WITNESS MY HAND AND THE OFFICIAL SEAL
OF THE DEPARTMENT OF STATE AT THE CITY
OF ALBANY, THIS 08TH DAY OF FEBRUARY
ONE THOUSAND NINE HUNDRED AND
NINETY-FOUR.
SECRETARY OF STATE
199402090022
<PAGE>
CONTRIBUTION AGREEMENT
CONTRIBUTION AGREEMENT, dated May 6, 1994, between Alliance Capital
Management L.P., a Delaware limited partnership ("Alliance"), and The Equitable
Life Assurance Society of the United States, a New York stock life insurance
company (the "Investor"). Capitalized terms not otherwise defined herein are
used as defined in the Agreement of Limited Partnership (As Amended and
Restated) of Alliance, dated as of November 19, 1987 (the "Partnership
Agreement").
The parties hereby agree as follows:
1. CASH CONTRIBUTIONS. Subject to and in accordance with the terms
hereof, in exchange for the Class B Limited Partnership Interest, (a) concurrent
with the execution of this Agreement, the Investor shall contribute to the
capital of Alliance $50 million in cash (the "Initial Contribution") and (b) at
any time prior to August 15, 1994, the Investor in its sole discretion, may make
one or more additional contributions to the capital of Alliance of up to an
aggregate of $50 million in cash (each, an "Additional Contribution"). The
Class B Limited Partnership Interest shall be convertible in accordance with the
terms and conditions of the Partnership Agreement into a number of Units (the
"Conversion Units") (rounded to the nearest whole number) equal to the amount of
the Initial Contribution and the amount of each Additional Contribution, if any,
divided in each case by the Unit Price applicable to such Initial Contribution
or Additional Contribution determined in accordance with Section 4.2(e) of the
Partnership Agreement.
2. CLOSING. (a) The closing with respect to the Initial
Contribution and each Additional Contribution (each, a "Contribution Closing")
shall take place on the date each such Contribution is made.
(b) Subject to the terms and conditions set forth herein:
(i) at each Contribution Closing, the Investor will deliver the
amount of the Initial Cash Contribution or an Additional Cash
Contribution, as the case may be, in cash
<PAGE>
to Alliance by wire transfer of immediately available funds to a bank
account designated by Alliance; and
(ii) at the Contribution Closing of the Initial Contribution,
Alliance shall issue the Class B Limited Partnership Interest to the
Investor and deliver to the Investor a certificate registered in the
name of the Investor representing the Class B Limited Partnership
Interest.
3. CONDITIONS TO EACH CONTRIBUTION CLOSING.
(a) The making of the Initial Contribution and any Additional
Contribution by the Investor and the obligations of Alliance and the Investor in
connection therewith shall, except as provided in Section 6, be subject to the
satisfaction to the parties hereto of all requirements applicable under the
Partnership Agreement, in the case of the Initial Contribution, to permit the
issuance of the Class B Limited Partnership Interest and any corresponding
Conversion Units and, in the case of any Additional Contributions, to permit the
issuance of any corresponding Conversion Units, including, without limitation,
in connection with the issuance of the Class B Limited Partnership Interest and
all Conversion Units, the issuance of a Tax Determination, an Assignment
Determination and a Limited Liability Determination.
(b) The representations and warranties of each of Alliance and the
Investor contained herein shall be true and correct in all material respects at
and as of the date of each Contribution Closing with the same effect as though
made on and as of the date of each Contribution Closing.
4. REPRESENTATIONS AND WARRANTIES OF ALLIANCE.
Alliance represents and warrants to the Investor as follows:
(a) Alliance is a limited partnership organized under the Delaware
Revised Uniform Limited Partnership Act, as amended (the "Delaware Act"),
validly existing and in good standing under the laws of the State of Delaware.
Alliance has the power and authority to execute and deliver this Agreement and
to perform its obligations hereunder. The execution and delivery of this
Agreement by Alliance, and the consummation of the transactions contemplated
2
<PAGE>
hereby, have been duly authorized by all requisite action by the General Partner
and Alliance. This Agreement constitutes the valid and legally binding
obligation of Alliance, enforceable against Alliance in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting creditors' rights generally and to general
principles of equity, regardless of whether enforcement is sought in a
proceeding in equity or at law.
(b) The Class B Limited Partnership Interest issued and any
Conversion Units to be issued pursuant to this Agreement have been duly
authorized and the Class B Limited Partnership Interest has been, and any
Conversion Units when issued pursuant to this Agreement will be, validly issued,
free and clear of any liens, encumbrances, equities or claims. Subject only to
the provisions of the Delaware Act, any other applicable law and the Partnership
Agreement, the Investor, as holder of the Class B Limited Partnership Interest
issued and any Conversion Units to be issued pursuant hereto, will have no
liability to Alliance or any of its creditors. Subject to Section 4(c), the
Class B Limited Partnership Interest and any Conversion Units may be freely
transferred by the Investor. The issuance pursuant to this Agreement of the
Class B Limited Partnership Interest and any Conversion Units is not subject to
preemptive rights of any partner in, or any Affiliate or creditor of, Alliance
or any other person. The issuance and delivery of the Class B Limited
Partnership Interest and any Conversion Units do not and will not conflict with
or breach any term or provisions of or constitute a default under the
Partnership Agreement or the certificate of limited partnership of Alliance, or
any other agreement or instrument to which Alliance is a party or by which any
of Alliance's properties is bound or any applicable law, rule, regulation,
judgment, order or decree of any government, governmental agency or
instrumentality or court, domestic or foreign, having jurisdiction over Alliance
or any of its properties. No consent, approval, authorization, waiver, permit,
grant, franchise, concession, agreement, license, exemption or order of,
registration, declaration or filing with ("Consent"), approval or authorization
or order of any nation or government, any state or other political subdivision
thereof, any governmental authority, agency, department, board, commission or
instrumentality and any tribunal or arbitrator of competent jurisdiction and any
self-regulatory organization ("Governmental Approval") is
3
<PAGE>
required for the valid authorization, issuance and delivery of the Class B
Limited Partnership Interest and any Conversion Units by Alliance pursuant to
this Agreement, except (i) the approval of the New York Stock Exchange (the
"NYSE") to the listing, upon notice of issuance, of the Conversion Units,
(ii) such Consents or Governmental Approvals, if any, as shall have been
obtained at the time of each Contribution Closing and (iii) the approval of the
Limited Partners and Unitholders as referred to in Section 6.
(c) Subject to and in reliance upon the representation given in
Section 5(c), the issuance of the Class B Limited Partnership Interest and any
Conversion Units by Alliance pursuant to this Agreement will be exempt from
registration under the Securities Act. The Conversion Units issued to the
Investor will be registerable under the Securities Act upon demand by the
Investor or any Corporate Affiliate of the General Partner subject to and in
accordance with the provisions of Section 6.11 (or any successor provisions) of
the Partnership Agreement.
5. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. The Investor
represents and warrants to Alliance as follows:
(a) The Investor is a stock life insurance company duly organized,
validly existing and in good standing under the laws of the State of New York.
The Investor has full power and authority to execute and deliver this Agreement
and to perform its obligations hereunder. The execution and delivery of this
Agreement by the Investor, and the consummation of the transactions contemplated
hereby, have been duly authorized by all requisite corporate action of the
Investor. This Agreement constitutes the valid and legally binding obligation
of the Investor, enforceable against the Investor in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, rehabilitation, fraudulent transfer, reorganization, moratorium and
similar laws relating to the creditors of insurance companies or the rights of
creditors generally and by general equitable principles.
(b) No Consent or Governmental Approval is required to be obtained by
or on behalf of the Investor or any Affiliate of the Investor in connection with
(i) the execution and delivery by the Investor of this Agreement,
4
<PAGE>
(ii) the performance of its obligations or the making of an Additional
Contribution hereunder and (iii) the consummation of the transactions
contemplated hereby except such Consents or Governmental Approvals, if any, as
shall have been obtained at the time of each Contribution Closing.
(c) The Investor is acquiring the Class B Limited Partnership
Interest and any Conversion Units for investment only and not with a view to any
distribution thereof. The Investor acknowledges that the Class B Limited
Partnership Interest and any Conversion Units have not been registered under the
Securities Act, and may not be transferred in the absence of such registration
requirements of the Securities Act. The Investor also acknowledges that any
certificate or certificates evidencing the Class B Limited Partnership Interest
or any Conversion Units issued to the Investor pursuant to this Agreement shall
carry a legend to such effect.
6. APPROVAL OF ALLIANCE UNITHOLDERS. The NYSE requires the approval
of the Unitholders of the issuance of the Conversion Units to the Investor as a
condition to the listing of the Conversion Units on the NYSE. Therefore,
Alliance agrees to proceed diligently to take whatever steps are necessary to
hold a meeting of Unitholders for the purpose of approving the issuance of the
Conversion Units; provided that Alliance may defer temporarily the preparation
and submission to the Securities and Exchange Commission of preliminary copies
of the proxy materials for such meeting until (i) such time as is mutually
agreeable to Alliance and the Investor or (ii) Alliance shall have received
written notice from the Investor directing Alliance to proceed with the
preparation and submission of such proxy materials. Alliance further agrees,
subject to the approval by Unitholders of the issuance of the Conversion Units,
to proceed diligently to obtain the approval of the NYSE of the listing of the
Conversion Units thereon.
7. BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.
8. ASSIGNMENT. This Agreement shall not be assignable by any party
hereto without the prior written consent of the other party hereto.
5
<PAGE>
9. GOVERNING LAW. This Agreement shall be governed in all respects,
including as to validity, interpretation and effect, by the internal laws of the
State of New York, without giving effect to the conflict of laws rules thereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
Alliance Capital
Management L.P.
By Alliance Capital
Management Corporation,
as General Partner
By: /s/ John D. Carifa
--------------------------
Name: John D. Carifa
Title: President
The Equitable Life Assurance
Society of the United States
By: /s/ J.M. de St. Paer
-------------------------
Name: J.M. de St. Paer
Title: Executive Vice
President and Chief
Financial Officer
6
<PAGE>
AMENDMENT OF AGREEMENT OF LIMITED PARTNERSHIP OF
ALLIANCE CAPITAL MANAGEMENT L.P. (AS AMENDED AND
RESTATED) PURSUANT TO SECTIONS 4.2(D) AND 17.1(E)
Alliance Capital Management Corporation, the general partner of
Alliance Capital Management L.P., a Delaware limited partnership (the
"Partnership"), hereby amends the Agreement of Limited Partnership of the
Partnership (As Amended And Restated) dated as of November 19, 1987 (the
"Partnership Agreement") pursuant to Sections 4.2(d) and 17.1(e) thereof as
follows, such amendment to the Partnership Agreement to be effective as of the
date hereof:
1. Article I of the Partnership Agreement is amended as follows:
(a) to insert the following definitions, each in alphabetical order
by reference to the first word thereof following the relevant prior definition
now in the Partnership Agreement or hereby added thereto:
"CLASS B LIMITED PARTNERSHIP INTEREST" shall mean the Class B Limited
Partnership Interest issued to ELAS in exchange for one or more
<PAGE>
Contributions in accordance with Section 4.2(e) and as set forth in
Section 4.12.
"CONVERSION EQUIVALENT" shall mean the Conversion Equivalent as
defined in Section 4.12(a).
"ELAS" means The Equitable Life Assurance Society of the United
States.
(b) the definition of "LIMITED PARTNER" is amended by inserting the
following sentence at the end thereof:
"The holder of the Class B Limited Partnership Interest will not,
however, be considered a Limited Partner for purposes of voting on any matter
that requires the approval of Limited Partners."
2. Section 4.9 is amended by inserting the following sentence at the
end thereof:
"Notwithstanding any other provision in this Section 4.9, in accordance
with Treasury Regulation Section 1.704-1(b)(2)(iv)(b), the
2
<PAGE>
Capital Account of ELAS with respect to the Class B Limited Partnership
Interest shall, with respect to each relevant Contribution, thereupon be
credited with an amount equal to the product of the applicable Conversion
Equivalent and the Capital Account of a Normal Public Unit."
3. Article IV is amended by adding the following new Section 4.12
immediately after Section 4.11:
"CLASS B LIMITED PARTNERSHIP INTEREST.
Notwithstanding any other provision of the Partnership Agreement to the
contrary, distributions, allocations and other matters pertinent to the Class B
Limited Partnership Interest, shall be governed by the following terms and
conditions:
(a) Partnership distributions and allocations shall be made with
respect to the Class B Limited Partnership Interest as if, as of each date
as of which determinations are made as to such distributions and
allocations, the Class B Limited Partnership Interest
3
<PAGE>
constituted the number of Limited Partnership Interests or Units, as
appropriate, that ELAS will receive upon the conversion of the Class B
Limited Partnership Interest determined with respect to each relevant
Contribution made by ELAS in accordance with Section 4.2(e) pursuant to the
formula set forth in Section 4.2(e)(each a "Conversion Equivalent").
(b) If at any time the Class B Limited Partnership Interest is
outstanding, the Units, Limited Partnership Interests, including the Class
A Limited Partnership Interest, and General Partnership Interest are
converted into equity interests of a New Entity pursuant to clause (z) of
the first sentence of Section 2.6, the holder of the Class B Limited
Partnership Interest shall receive an equity interest in such New Entity
having rights substantially similar to the rights embodied in the Class B
Limited Partnership Interest pursuant to this Section 4.12.
4
<PAGE>
(c) The Class B Limited Partnership Interest shall automatically
convert into the aggregate number of Limited Partnership Interests or Units
equal to the Conversion Equivalents upon the approval by the Limited
Partners and Unitholders of the issuance of the Limited Partnership
Interests or Units issuable upon such conversion of the Class B Limited
Partnership Interest. Upon the conversion of the Class B Limited
Partnership Interest, the Partnership shall issue to the holder of the
Class B Limited Partnership Interest an aggregate number of Limited
Partnership Interests or Units equal to the Conversion Equivalents in
exchange for the Class B Limited Partnership Interest. Immediately after
receipt of any Limited Partnership Interests pursuant to this Section
4.12(c), the holder of the Class B Limited Partnership Interest will
transfer all the Limited Partnership Interests issued to it by the
Partnership to the Assignor Limited Partner, the Partnership will issue a
certificate representing the Limited
5
<PAGE>
Partnership Interests so assigned to the Assignor Limited Partner, and the
Partnership and the Assignor Limited Partner will issue and deliver to the
holder of the Class B Limited Partnership Interest Units representing the
Limited Partnership Interests so assigned.
(d) The holder of the Class B Limited Partnership Interest will have
the same rights upon a liquidation of the Partnership as a Limited Partner
holding the aggregate number of Limited Partnership Interests equal to the
Conversion Equivalents."
4. The third sentence of Section 12.4(b) is modified to read in its
entirety as follows:
"Any holder (other than the Assignor Limited Partner) of Limited
Partnership Interests, other than the Class B Limited Partnership Interest,
may exchange any or all of such Limited Partnership Interests for
6
<PAGE>
corresponding Units by (A) delivering to the General Partner and the
Assignor Limited Partner such documents as may be reasonably required by
the General Partner and the Assignor Limited Partner and (B) paying such
reasonable fees and expenses as may be required with respect thereto by the
General Partner."
Dated: May 6, 1994
ALLIANCE CAPITAL MANAGEMENT
CORPORATION, in its capacities
as General Partner and
attorney-in-fact for the
Limited Partners and Unitholders
By:/s/ John D. Carifa
----------------------------
Name: John D. Carifa
Title: President
7
