SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C, 20549
____________________
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 14, 1994
____________________________________________________________________________
GFC FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-11011 86-0695381
____________________________________________________________________________
(State or Other Jurisdiction Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
DIAL CORPORATE CENTER, PHOENIX, ARIZONA 85077
____________________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 602/207-6900
__________________________
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
(b) Stock Purchase Agreement dated as of February 14, 1994 among GFC
Financial Corporation, Greyhound Financial Corporation, a wholly-
owned subsidiary of GFC Financial Corporation, and Fleet Financial
Group, Inc. for the purchase of Fleet Factors Corp.
(c) Fifth Amendment and Restatement, dated as of May 18, 1993, of
Credit Agreement dated as of May 31, 1976 among Greyhound
Financial Corporation, Bank of America National Trust and Savings
Association, Chemical Bank and Citibank, N.A., as agents, and the
financial institutions listed.
Any Schedules, Annex's and Exhibits to such Agreements not filed
herewith will be provided to the Commission upon request.
________
(a) previously filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
GFC FINANCIAL CORPORATION
(Registrant)
Dated: February 18, 1994 By /s/ Bruno A. Marszowski
----------------------------------------------
Bruno A. Marszowski, Vice President-Controller
Principal Financial Officer/Authorized Officer
STOCK PURCHASE AGREEMENT
AMONG
GFC FINANCIAL CORPORATION,
GREYHOUND FINANCIAL CORPORATION
AND
FLEET FINANCIAL GROUP, INC.
Dated as of February 14, 1994
TABLE OF CONTENTS
Page
ARTICLE I
PURCHASE AND SALE OF STOCK;
RETENTION OF CERTAIN LIABILITIES
1.1 Transfer of Stock . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Closing Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Retention of Certain Liabilities by Seller . . . . . . . . . . . . . 5
ARTICLE II
CLOSING
2.1 The Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Closing Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.3 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
3.1 Corporate Organization, Etc. . . . . . . . . . . . . . . . . . . . . 9
3.2 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.3 Ownership of Stock . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.4 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.5 Authorization, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 11
3.6 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.7 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . 12
3.8 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . 12
3.9 Compliance with Law; Governmental Authorizations . . . . . . . . . . 15
3.10 Proprietary Rights . . . . . . . . . . . . . . . . . . . . . . . . 16
3.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.12 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.13 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.14 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.15 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . 22
3.16 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . 22
3.17 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . 25
3.18 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.19 Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.20 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.21 Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.22 Intercompany Matters . . . . . . . . . . . . . . . . . . . . . . . 31
3.23 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . 31
3.24 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND GFC
4.1 Corporate Organization . . . . . . . . . . . . . . . . . . . . . . . 32
4.2 Authorization, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 32
4.3 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.4 Acquisition for Investment . . . . . . . . . . . . . . . . . . . . . 33
4.5 No Brokers or Other Fees . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE V
COVENANTS AND AGREEMENTS
5.1 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . 33
5.2 Additional Financial Statements . . . . . . . . . . . . . . . . . . 36
5.3 Access to Books, Records and Properties . . . . . . . . . . . . . . 36
5.4 Filings and Consents . . . . . . . . . . . . . . . . . . . . . . . . 37
5.5 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.6 Acquisition Proposals to the Company . . . . . . . . . . . . . . . . 43
5.7 Books, Records and Information . . . . . . . . . . . . . . . . . . . 43
5.8 Supplements to Disclosure Schedule; Notice and Cure . . . . . . . . 44
5.9 Covenant to Satisfy Conditions . . . . . . . . . . . . . . . . . . . 44
5.10 Employee Benefits and Employment . . . . . . . . . . . . . . . . . 44
5.11 Company Name . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.12 Covenant Not to Compete . . . . . . . . . . . . . . . . . . . . . . 47
5.13 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.14 Employment Agreement . . . . . . . . . . . . . . . . . . . . . . . 49
5.15 Certain Other Agreements . . . . . . . . . . . . . . . . . . . . . 49
5.16 Intercompany Obligations After the Audit Date . . . . . . . . . . . 49
5.17 Certain Appeal Bonds . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF SELLER
6.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . 49
6.2 Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.3 Corporate Documents . . . . . . . . . . . . . . . . . . . . . . . . 50
6.4 Officer s Certificate . . . . . . . . . . . . . . . . . . . . . . . 50
6.5 Injunctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.6 Intercompany Obligations . . . . . . . . . . . . . . . . . . . . . . 50
6.7 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.8 Governmental Filings and Consents; Third-Party Consents . . . . . . 50
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF BUYER
7.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . 51
7.2 Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.3 Corporate Documents . . . . . . . . . . . . . . . . . . . . . . . . 51
7.4 Officer s Certificate . . . . . . . . . . . . . . . . . . . . . . . 51
7.5 Injunctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.6 Termination of Tax Sharing Agreements . . . . . . . . . . . . . . . 51
7.7 Governmental Filings and Consents; Third-Party Consents . . . . . . 51
7.8 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.9 Employment Agreement . . . . . . . . . . . . . . . . . . . . . . . . 52
7.10 Resignations . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.11 Assumption and Indemnification Agreements . . . . . . . . . . . . . 52
7.12 Environmental Assessments . . . . . . . . . . . . . . . . . . . . . 52
7.13 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . 52
7.14 Intercompany Obligations . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE VIII
TERMINATION
8.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.2 Effect of Termination. . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.2 Survival of Representations and Warranties . . . . . . . . . . . . . 57
9.3 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE X
MISCELLANEOUS
10.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.2 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.4 No Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.5 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.7 Complete Agreement . . . . . . . . . . . . . . . . . . . . . . . . 61
10.8 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.9 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
10.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
10.11 No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . 62
10.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
TABLE OF ANNEXES
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annex A
Form of Instrument of Assumption and Indemnification . . . . . . . Annex B
Form of Opinions of Counsel for Buyer and GFC . . . . . . . . . . . Annex C
Form of Opinions of Counsel for Seller . . . . . . . . . . . . . . Annex D
<PAGE>
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT ( Agreement ) is made and entered
into as of February 14, 1994, by and among Fleet Financial Group, Inc., a
Rhode Island corporation ( Seller ), GFC Financial Corporation, a Delaware
corporation ( GFC ), and Greyhound Financial Corporation, a Delaware
corporation ( Buyer ). Capitalized terms used but not defined in this
Agreement shall have the meanings ascribed to such terms in Annex A hereto.
WHEREAS, Fleet Factors Corp., a Rhode Island corporation engaged
in the business of commercial lending and factoring (the Company ), has 100
issued and outstanding shares of common stock, par value $1.00 per share
(the Company Common Stock ), all of which are owned by Seller; and
WHEREAS, Buyer desires to purchase from Seller, and Seller
desires to sell to Buyer, all of the Company Common Stock, subject to the
terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual premises and
covenants, agreements, representations and warranties contained in this
Agreement, Seller and Buyer agree as follows:
ARTICLE I
PURCHASE AND SALE OF STOCK;
RETENTION OF CERTAIN LIABILITIES
1.1 Transfer of Stock. On the Closing Date (as defined in
Section 2.1 hereof) and subject to the terms and conditions set forth in
this Agreement, Seller will sell, assign, transfer and deliver to Buyer all
of the Company Common Stock, free and clear of all Encumbrances (as defined
in Annex A hereto).
1.2 Consideration. (a) On the Closing Date and subject to the
terms and conditions set forth in this Agreement, in reliance on the repre-
sentations, warranties, covenants and agreements of the parties contained
herein and in consideration of the sale, assignment, transfer and delivery
by Seller to Buyer of the Company Common Stock, Buyer will pay to Seller by
wire transfer of immediately available funds to a bank account designated by
Seller (which bank account will be so designated not less than two (2)
business days prior to the Closing (as defined in Section 2.1 hereof)) an
amount equal to one hundred fifty percent (150%) of the Shareholder s Equity
(determined as provided in Sections 1.3(b) and 1.3(d) hereof) of the Company
at and as of November 30, 1993 (the Purchase Price ).
(b) Within two (2) business days after the acceptance and
finality of the determination of such amount in accordance with the
provisions of Section 1.3(e) hereof, if the Adjusted Net Income (Loss) of
the Company (determined as provided in Section 1.3(c) hereof) for the period
beginning December 1, 1993 to and including the last day of that calendar
month which ends prior to the Closing Date (the Interim Period ) is a
positive number, the Company shall pay a cash dividend to Seller in an
amount equal to the Adjusted Net Income (Loss) of the Company for such
period, or, if the Adjusted Net Income (Loss) of the Company for the Interim
Period is a negative number, Seller shall contribute, without consideration
therefor, to the Company in cash, an amount equal to the Adjusted Net Income
(Loss) of the Company for such period. Such payment shall be made by Buyer
or Seller, as the case may be, by wire transfer of immediately available
funds to an account designated by Seller or Buyer, respectively.
1.3 Closing Audit. (a) Seller has engaged KPMG Peat Marwick
(the Auditor ) to provide the services set forth in this Agreement and will
cause the Auditor to conduct an audit of the books and records of the Compa-
ny to determine the Shareholder s Equity of the Company at and as of Decem-
ber 31, 1992 and November 30, 1993 (the latter date being referred to herein
as the Audit Date ) and the Adjusted Net Income (Loss) of the Company for
the one-year period ended December 31, 1992 and the eleven-month period
ended November 30, 1993 (collectively, the Closing Audit ). Seller shall
cause the Auditor to complete the Closing Audit as soon as practicable but
in no event later than February 14, 1994. The Closing Audit shall be con-
ducted in accordance with United States generally accepted auditing
standards, except to the extent set forth in this Section 1.3 or in Schedule
1.3 hereto. The Auditor shall have reasonable access to the books and
records (including workpapers) of the Company and of Seller and to all
appropriate employees, consultants and advisors of either, in each case
which reasonably relate to the performance of the Closing Audit and, as de-
scribed below, the review of the Adjusted Net Income (Loss) of the Company
for the Interim Period. From time to time prior to delivery of the Closing
Audit Report (as defined in Section 1.3(d) hereof), Seller, Buyer and its
accountants shall be entitled to discuss with the Auditor the status of the
Closing Audit and preliminary determinations of the Auditor with respect
thereto and to review and comment upon drafts thereof.
(b) The Shareholder s Equity of the Company at and as of a
particular date (the Shareholder s Equity ) shall be determined (i) in
accordance with United States generally accepted accounting principles
( GAAP ) but without regard to materiality, (ii) subtracting from such
resulting amount the increase in the book value of the Company attributable
to any extraordinary gains of the Company and the Company Subsidiaries as
reflected in the audited financial statements of the Company for such date,
and (iii) taking into account any adjustments required pursuant to Schedule
1.3 hereto.
(c) The Adjusted Net Income (Loss) of the Company for any
particular period shall be determined (i) in accordance with GAAP consistent
with the audited financial statements of the Company contained in the
Closing Audit Report and without regard to materiality (ii) after provision
for federal, state and local income taxes, and (iii) excluding extraordinary
gains of the Company and the Company Subsidiaries for such period.
(d) Promptly upon completion thereof, the Auditor shall
deliver simultaneously to the parties a copy of the Closing Audit, together
with its report thereon, and the Auditor s determination of the
Shareholder s Equity of the Company at and as of December 31, 1992 and
November 30, 1993 and the Adjusted Net Income (Loss) of the Company for the
one-year period ended December 31, 1992 and the eleven-month period ended
November 30, 1993 (the Closing Audit Report ). Copies of the workpapers
used in the preparation of the Closing Audit Report shall be delivered or
made fully available to Buyer no later than February 15, 1994. After
receipt of the Closing Audit Report, Buyer and Seller shall have seven (7)
business days to review the Closing Audit Report. Buyer, Seller and their
respective authorized representatives shall have reasonable access to the
employees of the Auditor, and Buyer and its authorized representatives shall
have access to all relevant books and records (including workpapers) and
employees of the Company and Seller, to the extent reasonably required to
complete their respective reviews of the Closing Audit Report. Unless Buyer
or Seller delivers written notice to the other party and the Auditor on or
prior to the seventh (7th) business day after delivery by the Auditor of the
Closing Audit Report, specifying in reasonable detail all disputed items and
the basis or bases therefor and that such party believes in good faith that
the aggregate effect of such disputed items could reasonably result in a
change in Shareholder's Equity of at least $1 million, the parties shall be
deemed to have accepted and agreed to the Closing Audit Report. If Buyer or
Seller notifies the Auditor and the other party in writing of an objection
or objections to the Closing Audit Report as provided above within such
seven (7) business days (the Preliminary Objection Notice ), Buyer and
Seller shall, until the tenth (10th) business day after delivery of the
Closing Audit Report, have the opportunity to provide written reports to the
Auditor supplementing the basis or bases for disputed items previously iden-
tified by such party to the Auditor or responding to the basis or bases set
forth by the other party for disputed items. A copy of any such written
report to the Auditor by either party shall simultaneously be provided by
such party to the other party. Based upon such written reports, the Auditor
shall make a final determination, within ten (10) business days after the
earlier to occur of receipt thereof from Buyer and Seller or expiration of
the ten (10) business day period in which such reports may be provided, of
the Shareholder s Equity (without regard to the $1 million threshold for
providing a Preliminary Objection Notice) and Adjusted Net Income (Loss) of
the Company at and as of such date and for such time period, respectively,
which determination shall be binding upon the parties; provided, however,
that in the event that either Buyer or Seller delivers to the other party
within five (5) business days after such determination a written notice of
its disagreement with such determination, the parties shall arbitrate such
matter in accordance with the procedures set forth in Section 9.3 hereof.
Buyer and Seller agree that in the event the Closing Audit Report does not
indicate discrepancies between the Company Financial Statements and the
Closing Audit Report in excess of the thresholds set forth in Section 8.1(c)
hereof, then the Closing shall occur in accordance with Section 2.1 hereof
(without regard to clause (iii) of such Section) prior to the finalization
of the Closing Audit Report as contemplated by this Section 1.3(d). In the
event the Closing occurs prior to completion and acceptance of the Closing
Audit Report pursuant to the immediately preceding sentence and, as a result
of the dispute procedures set forth in this Section 1.3(d), the actual
Purchase Price is determined to be greater or less than the Purchase Price
paid at Closing, a payment in the amount of such difference shall be made
within two (2) business days of such final determination by Buyer or Seller,
as the case may be, to the other party by wire transfer of immediately
available funds to an account designated by such other party. Notwith-
standing anything to the contrary contained in this Section 1.3(d), neither
Buyer nor Seller shall be entitled to dispute the adjustments reflected in
the Closing Audit Report with respect to the calculation of (i) pension
accruals or (ii) adjustments related to all intercompany management fees.
(e) Promptly after the Closing Date, but in no event later
than thirty (30) days thereafter, Buyer shall cause the Company to deliver
simultaneously to Buyer and Seller the Company's determination of the
Adjusted Net Income (Loss) of the Company for the period beginning on
December 1, 1993 to and including the last day of that calendar month which
ends immediately prior to Closing (the "Interim Period ), together with the
workpapers used in the preparation thereof. The Company shall also instruct
the Auditor to deliver at such time a certification of the Auditor stating
that, based solely upon its review of the workpapers of the Company used in
the preparation thereof and upon any other materials deemed necessary or
relevant by the Auditor in connection therewith, nothing has come to the
Auditor's attention indicating that such determination does not comply with
the provisions of Section 1.3(c) hereof (an Auditor s Review Certifica-
tion ). The procedures set forth in Section 1.3(d) hereof shall govern the
acceptance and finality of the determination of the Adjusted Net Income
(Loss) of the Company with respect to the Interim Period, except that the
disputed item threshold shall not be applicable.
(f) All fees and expenses relating to the work to be per-
formed by the Auditor hereunder shall be borne by Seller.
1.4 Retention of Certain Liabilities by Seller. Seller hereby
agrees that Seller and Seller s successors and assigns shall bear all
responsibility for all Claims (as defined in Section 9.1(a) hereof) that
GFC, Buyer, the Company and each Company Subsidiary may suffer, sustain,
incur or become subject to, arising out of, in connection with or due to any
and all acts or omissions prior to the Closing, whether known or unknown, of
every kind whatsoever (including, without limitation, Claims with respect to
those matters referred to in Section 3.14 of the Disclosure Schedule) other
than (i) liabilities reflected on the consolidated balance sheet of the
Company and the Company Subsidiaries at and as of November 30, 1993
contained in the Closing Audit Report, (ii) liabilities specifically identi-
fied and assumed by Buyer pursuant to this Agreement, (iii) claims for
refunds of customer credit balances which have been classified or treated as
income by the Company after the Closing (provided that Seller shall not be
liable to Buyer hereunder for claims for refunds brought by customers of the
Company for customer credit balances to the extent of the amount of customer
credit balances existing at and as of the Closing), (iv) Environmental
Claims (as defined in Section 3.16 hereof) except to the extent covered by
the representations and warranties contained herein; provided, however, that
Seller shall bear all responsibility for any and all Environmental Claims
with respect to all real property owned or leased by the Company or any
Company Subsidiary prior to Closing, (v) the first $350,000 of expenses of
retention of legal counsel, court fees and other legal costs and expenses
incurred in connection with conducting the defense of Claims relating solely
to loan portfolio account collection and foreclosure matters and bankruptcy
preference claims (collectively, Loan Portfolio Matters ) and of complying
with the provisions of Section 5.17 hereof in each of the three (3) twelve
(12) month periods immediately following the Closing Date, (vi) the first
$500,000 of costs and expenses incurred in connection with adverse judgments
or settlements on the part of the Company or any Company Subsidiary with re-
spect to Claims relating solely to Loan Portfolio Matters in each of the
four (4) twelve (12) month periods immediately following the Closing Date;
provided, that such $500,000 annual basket shall not apply with respect to
any finding of liability or settlement with respect to Claims insofar as
such Claims relate to (a) the violation of any federal, state, local or
foreign statute, rule, regulation, ordinance or code or, with respect to the
Company or any Company Subsidiary specifically, any order, judgment, writ,
injunction, decree or award entered by any federal, state, local or foreign
court, arbitrator or other forum of competent jurisdiction, or (b) the
enforceability, completeness and accuracy of documentation pertaining to any
such Loan Portfolio Matter; provided further, that any unapplied portion of
the $500,000 annual basket referred to above in any of the first three (3)
twelve (12) month periods immediately following the Closing Date shall be
available for application with respect to Claims relating solely to Loan
Portfolio Matters during any of the succeeding twelve (12) month periods
immediately following the Closing Date up to but not beyond the conclusion
of the fourth (4th) twelve (12) month period following the Closing Date;
provided further, however, that any unapplied portion of the $500,000 annual
basket referred to above in any of the first four (4) twelve (12) month
periods immediately following the Closing Date shall be available for
application with respect to Claims relating solely to Loan Portfolio Matters
after such time solely with respect to such Claims as to which a Buyer
Indemnified Party (as defined in Section 9.1(a) hereof) has received
reasonable notice prior to the end of such four (4) twelve month periods;
(vii) accounts payable of the Company and the Company Subsidiaries arising
after November 30, 1993 in the ordinary course of business consistent with
past practice of the Company and the Company Subsidiaries, including without
limitation salaries, rent, insurance and other obligations; provided, that
such amounts have been or will be recognized as expenses in the calculation
of the Adjusted Net Income (Loss) of the Company for the Interim Period;
provided further, that the recognition of such amounts has not constituted
or will not constitute a breach of any representation or warranty contained
in this Agreement; (viii) balances due as of the Closing Date to factored
and finance clients; and (ix) those obligations arising from acts or omis-
sions occurring after the Closing pursuant to any Contract (as defined in
Section 3.6 hereof) to which the Company or any Company Subsidiary is a
party as of the Closing Date (collectively, the Retained Liabilities ). To
more effectively consummate the contemplated transaction in accordance with
the intentions of the parties, at the Closing, Seller shall deliver to Buyer
an executed instrument of assumption and indemnification in the form
attached hereto as Annex B (the Instrument of Assumption and Indemnifica-
tion ).
ARTICLE II
CLOSING
2.1 The Closing. Subject to Section 8.1 hereof, the closing
(the Closing ) of the transactions contemplated by this Agreement shall
take place at the offices of Skadden, Arps, Slate, Meagher & Flom, 919
Third Avenue, New York, New York 10022 at 8:30 a.m., local time, on the
later of (i) February 14, 1994, (ii) the second business day following the
satisfaction or waiver of all of the conditions set forth in Article VI and
Article VII hereof, (iii) the second business day after finalization and
acceptance of the Closing Audit Report as contemplated by Section 1.3(e)
hereof, or (iv) at such other place and time as may be agreed upon by Seller
and Buyer (the Closing Date ).
2.2 Closing Deliveries. (a) Deliveries by Seller. At or prior
to the Closing, Seller shall deliver or cause to be delivered to Buyer the
following:
(i) certificates evidencing the Company Common
Stock free and clear of any Encumbrances, which certificates shall
be properly endorsed for transfer or accompanied by duly executed
stock powers, in either case executed in blank or in favor of
Buyer or its nominee as Buyer may have directed prior to the
Closing Date, and otherwise in a form acceptable for transfer on
the books of the Company;
(ii) copies of resolutions of the Board of
Directors of Seller, certified by the corporate secretary or
assistant secretary of Seller, authorizing the execution, delivery
and performance by Seller of this Agreement and the transactions
contemplated hereby as required by Section 7.3 hereof;
(iii) the Seller s certificate required by Section
7.4 hereof;
(iv) all books and records of the Company and each
Company Subsidiary, including each such company s corporate minute
book, seal and stock ledger book;
(v) instruments evidencing termination of the tax
sharing agreements as required by Section 7.6 hereof;
(vi) all licenses, permits, orders, consents,
approvals, registrations, authorizations, qualifications, filings
and waivers required to be obtained and delivered by Seller
pursuant to Section 7.7 hereof;
(vii) the opinions of counsel for Seller required
by Section 7.8 hereof;
(viii) the resignations of the members of the
Board of Directors and those officers of the Company and of each
Company Subsidiary that are also officers of Seller or any
affiliate (as prescribed by Rule 12b-2 of the regulations
promulgated pursuant to the Securities Exchange Act of 1934, as
amended (the Exchange Act )) (an Affiliate ) of Seller (other
than the Company or any Company Subsidiary) as required by Section
7.10 hereof;
(ix) the Assumption and Indemnification Agreement
as required by Sections 1.4 and 7.11 hereof; and
(x) all other previously undelivered documents re-
quired to be delivered by Seller to Buyer at or prior to the
Closing Date in connection with the transactions contemplated
hereby.
(b) Deliveries by Buyer. At or prior to the Closing, Buyer
shall deliver or cause to be delivered to Seller the following:
(i) the Purchase Price, by wire transfer of imme-
diately available funds, as provided in Section 1.2 hereof;
(ii) copies of resolutions of the Board of
Directors of Buyer, certified by the corporate secretary or
assistant secretary of Buyer, authorizing the execution, delivery
and performance by Buyer of this Agreement and the transactions
contemplated hereby as required by Section 6.3 hereof;
(iii) the Buyer s certificate required by Section
6.4 hereof;
(iv) the opinions of counsel for Buyer required by
Section 6.7 hereof; and
(v) all other previously undelivered documents
required to be delivered by Buyer to Seller at or prior to the
Closing Date in connection with the transactions contemplated
hereby.
2.3 Further Assurances. After the Closing, each party hereto
shall from time to time, at the request of the other party and without
further cost or expense to such other party, execute and deliver such other
instruments and take such other actions as such other party may reasonably
request to more effectively consummate the transactions contemplated hereby
and to vest in Buyer good and valid title to the Company Common Stock free
and clear of Encumbrances.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
3.1 Corporate Organization, Etc. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Rhode Island and has full corporate power and authority to conduct its
business as it is now being conducted and own and lease its properties,
including the Company Common Stock. The Company is a corporation duly orga-
nized, validly existing and in good standing under the laws of the State of
Rhode Island and has full corporate power and authority to carry on its
business as it is now being conducted and to own the properties and assets
it now owns and is duly qualified or otherwise authorized as a foreign
corporation to conduct the business conducted by it and is in good standing
in each jurisdiction in which such qualification or authorization is
required under applicable law, except jurisdictions in which the Company s
failure to be so qualified or otherwise authorized would not or could not
reasonably be expected to, individually or in the aggregate, result in an
adverse change of $350,000 or more in the business, condition (financial or
otherwise), assets, liabilities or results of operations (a Material
Adverse Effect ) of the Company and the Company Subsidiaries taken as a
whole. Section 3.1 of the Disclosure Schedule sets forth each jurisdiction
in which the Company is duly qualified or otherwise authorized as a foreign
corporation to conduct business. Seller has delivered to Buyer complete and
correct copies of the charter and by-laws of each of Seller, the Company and
each Company Subsidiary as presently in effect.
3.2 Capital Stock. The authorized capital stock of the Company
consists of 8,000 shares of common stock, $1.00 par value per share, of
which only the Company Common Stock is issued and outstanding, and no other
shares of any other class or series of capital stock are authorized, issued
or outstanding. All of the shares of Company Common Stock have been validly
issued and are fully paid, nonassessable and free of preemptive rights.
Except as set forth in Section 3.2 of the Disclosure Schedule, there are no
subscriptions, options, convertible or exchangeable securities or
instruments, warrants, calls, rights, contracts, commitments,
understandings, restrictions or arrangements relating to or providing for
the issuance, sale, purchase, redemption, transfer or voting of any shares
of Company Common Stock or other capital stock or ownership interests in the
Company.
3.3 Ownership of Stock. Seller has good, valid and marketable
title to the Company Common Stock free and clear of all Encumbrances, other
than the restrictions imposed by federal and state securities laws. Upon
consummation of the transactions contemplated hereby, Buyer will acquire
good and valid title to the Company Common Stock, free and clear of all
Encumbrances, other than the restrictions imposed by federal and state
securities laws.
3.4 Subsidiaries. Section 3.4 of the Disclosure Schedule sets
forth the name, jurisdiction of incorporation and capitalization of each
Company Subsidiary and each jurisdiction in which each Company Subsidiary is
duly qualified to conduct business. Except for security interests in
collateral consisting of capital stock or other equity securities of any
corporation (including, but not limited to, a cooperative corporation) or in
any partnership, joint venture, trust, unincorporated organization or any
other entity or as disclosed in Section 3.4 of the Disclosure Schedule,
neither the Company nor any Company Subsidiary owns, directly or indirectly,
any capital stock or other equity securities of any corporation or has any
direct or indirect equity or ownership interest in any partnership, joint
venture, corporation, trust, unincorporated organization, or any other
entity not listed in Section 3.4 of the Disclosure Schedule. All the out-
standing capital stock of each Company Subsidiary is owned directly or
indirectly by the Company (as set forth in Section 3.4 of the Disclosure
Schedule) free and clear of all Encumbrances, and is validly issued, fully
paid, nonassessable and free of preemptive rights. There are no subscrip-
tions, options, convertible or exchangeable securities or instruments, war-
rants, calls, rights, contracts, commitments, understandings, restrictions
or arrangements relating to or providing for the issuance, sale, purchase
redemption, transfer or voting of any shares of capital stock or other
ownership interests in any Company Subsidiary. Each Company Subsidiary is a
corporation duly organized, validly existing and in good standing under the
laws of its state of incorporation, has full corporate power and authority
to carry on its business as it is now being conducted and to own the
properties and assets it now owns, and is duly qualified or otherwise autho-
rized as a foreign corporation to conduct the business conducted by it and
is in good standing in each jurisdiction in which such qualification or
authorization is required under applicable law, except jurisdictions in
which the failure to be so qualified or otherwise authorized would not or
could not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect on the Company and the Company Subsidiaries taken
as a whole. On January 6, 1994, the Company dissolved Flamb Corporation, a
former Florida corporation and wholly owned subsidiary of the Company
( Flamb ). Immediately prior to such dissolution, Flamb was a shell
corporation with no assets or liabilities of any consequence. Neither the
Company nor any Company Subsidiary retains any liability as a result of the
prior ownership or operations of Flamb or as a result of its dissolution.
3.5 Authorization, Etc. Seller has full corporate power and
authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby. The Board of Directors of Seller has
authorized the execution and delivery by Seller of this Agreement and the
consummation by Seller of the transactions contemplated hereby and no
shareholder approval or other corporate proceedings on the part of Seller is
necessary to approve and authorize the execution and delivery by Seller of
this Agreement and the consummation by Seller of the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Seller. This Agreement constitutes a valid and binding
agreement of Seller, assuming the due execution of the Agreement by Buyer
and GFC, enforceable against Seller in accordance with its terms, except
that (a) such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
3.6 No Violation. The execution and delivery of this Agreement
by Seller and the consummation by Seller of the transactions contemplated
hereby will not (a) conflict with or result in a violation of any provision
of the charter or bylaws of Seller, the Company or any Company Subsidiary,
(b) except as specified in Section 3.6 of the Disclosure Schedule, conflict
with, violate, or constitute a breach or default (with or without notice or
lapse of time or both), or give rise to any right of termination,
cancellation or acceleration under or otherwise impair any contract, commit-
ment, Credit Arrangement (as defined in Section 3.12(b) hereof), policy,
indenture, mortgage, note, deed or other agreement of any nature, including,
without limitation, those specified in Section 3.12(a) of the Disclosure
Schedule (each a Contract ) but excluding any oral Contract involving loan
or financial commitments or obligations or advances under factoring
contracts equal to or less than $300,000 individually or $1,000,000 in the
aggregate, in each case as to which Seller, the Company or any Company
Subsidiary is a party or by which Seller, the Company or any Company Subsid-
iary is bound, or to which the assets or employees of the Company or any
Company Subsidiary are subject, which breach or default would or could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company and the Company Subsidiaries taken as a whole,
or interfere in any material way with the ability of Seller or Buyer to
consummate the transactions contemplated by this Agreement, (c) conflict
with or result in a violation by Seller, the Company or any Company
Subsidiary of any federal, state, local or foreign law, statute, rule,
regulation, ordinance or code or any order, judgment, writ, injunction,
decree or award entered by any federal, state, local or foreign court,
arbitrator or other forum of competent jurisdiction ( Laws or Law ),
(d) result in or give rise to the imposition of any Encumbrance, restriction
or charge on the business of the Company or any Company Subsidiary or on any
assets of the Company or the Company Subsidiaries, or (e) except as set
forth in Section 3.6 of the Disclosure Schedule, conflict with, violate or
constitute a breach or default (with or without notice or lapse of time or
both), or give rise to any right of termination, cancellation or accelera-
tion under, or otherwise impair, any license, permit, order, consent,
approval, registration, authorization, qualification or filing with or under
any federal, state, local or foreign laws and governmental or regulatory
bodies (collectively, Permits ).
3.7 Financial Statements. (a) Seller has heretofore delivered
to Buyer complete copies of (i) the consolidated balance sheets of the
Company at December 31, 1988, 1989, 1990, 1991 and 1992, November 30, 1992
and November 30, 1993, and (ii) the consolidated statements of income and
statements of retained earnings of the Company for each of the years ended
December 31, 1988, 1989, 1990, 1991 and 1992, and (iii) the consolidated
statement of income of the Company for the eleven-month period ended
November 30, 1993 (collectively, the Company Financial Statements ).
Seller has also heretofore delivered to Buyer complete copies of (i) the
consolidated balance sheet of the Company at September 30, 1993 and (ii) the
consolidated statement of income of the Company for the ten-month period
then ended (together, the Interim Company Financial Statements ).
(b) When finally prepared and delivered in accordance with
Section 1.3(e) hereof, the financial statements contained in the Closing
Audit Report (the Closing Audit Financial Statements ) will be prepared in
accordance with GAAP, will be true and correct in all material respects and
will fairly present the consolidated financial condition and results of
operation of the Company and the Company Subsidiaries at and as of the dates
and for the periods indicated therein. Subject to the parameters set forth
in the last sentence of Section 9.1(a), at and as of November 30, 1993,
neither the Company nor any Company Subsidiary had any material
indebtedness, obligation or liability of any kind (whether accrued,
absolute, contingent or otherwise, and whether due or to become due) which
will not be reflected in the Closing Audit Financial Statements.
3.8 Absence of Certain Changes. Except as set forth in Sec-
tion 3.8 of the Disclosure Schedule, since September 30, 1993 there has been
no change in the business, condition (financial or otherwise), assets,
liabilities or results of operations of the Company and the Company Subsid-
iaries which would or could reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on the Company and the Company
Subsidiaries taken as a whole. Except as and to the extent set forth in
Section 3.8 of the Disclosure Schedule (or any subsection thereof) and as
otherwise provided herein, since September 30, 1993:
(a) the business of the Company and the Company Subsidiaries
has been conducted only in the ordinary course and consistent with past
practices;
(b) there has been no change in the Permits of the Company
or any Company Subsidiary, except for changes which would not or could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company and the Company Subsidiaries taken as a whole;
(c) neither the Company nor any Company Subsidiary has lost
any factoring client or borrower or been advised that it will likely lose
any factoring client or borrower which would or could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on the
Company and the Company Subsidiaries taken as a whole;
(d) there has been no purchase of assets by the Company or
any Company Subsidiary, and no sale, assignment or transfer of any of the
assets of the Company or any Company Subsidiary (other than purchases of
assets from, or sales, assignments or transfers of assets to, non-Affiliates
(as defined in Section 2.2 hereof) of the Company or any of the Company
Subsidiaries except in the ordinary course of business and consistent with
past practices, or between or among the Company and any of the Company
Subsidiaries);
(e) except as reflected in the Closing Audit Report or in
Schedule 1.3 hereto, there has been no change in the financial reporting or
accounting methods or practices by the Company or any Company Subsidiary
(including without limitation any change with respect to establishment of
reserves for losses or the determination of non-accruing loans (including
without limitation incurred but not reported losses with respect to loan
losses or factoring losses) or any material change in depreciation or
amortization policies or rates adopted by it);
(f) neither the Company nor any Company Subsidiary has made
any change in any of its factoring, asset-based lending or tax or accounting
practices or policies;
(g) determination of nonaccruing loans and delinquency
reporting practices of the Company and Company Subsidiaries were conducted
consistent with past practices;
(h) neither the Company nor any Company Subsidiary has
discharged or satisfied any indebtedness, obligation or liability or
cancelled or compromised any claim or waived or released any right, except
for such discharges, satisfactions, cancellations, compromises, waivers, or
releases made in the ordinary course of business which would not or could
not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company and the Company Subsidiaries taken as
a whole;
(i) neither the Company nor any Company Subsidiary has made
any capital expenditures or any commitments therefor in excess of $100,000
individually or $200,000 in the aggregate;
(j) neither the Company nor any Company Subsidiary has
entered into or has proposed entering into any other transactions or
Contracts other than in the ordinary course of business consistent with past
practices;
(k) neither the Company nor any Company Subsidiary has (A)
suffered any extraordinary loss or extraordinary losses (as defined in
Opinion No. 30 of the Accounting Principles Board of the American Institute
of Certified Public Accountants) or (B) suffered any damage, destruction or
casualty loss without regard to coverage by insurance, which would or could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company and the Company Subsidiaries taken as a whole;
(l) except as set forth in Section 5.1(d) of the Disclosure
Schedule, neither the Company nor any Company Subsidiary has (A) made or
agreed to make any increase in the compensation payable or to become payable
to any employee, agent, consultant or other similar representative of the
Company or any Company Subsidiary, or made or agreed to make any increase in
any bonus or incentive compensation or commission plan or in any Plan (as
defined in Section 3.17 hereof) except in each case for any such increases
pursuant to agreements in existence on December 31, 1992 with respect to
such plans or for increases that were made in the ordinary course of
business consistent with past practice and that did not result in an
increase of more than 6% of the respective salary, wages or compensation of
any such person or entity, or (B) created any Plan or made any contribution,
amendment or modification to any Plan;
(m) neither the Company nor any Company Subsidiary failed
promptly to pay and discharge current liabilities, except where disputed in
good faith (each such disputed claim is listed in Section 3.8 (m) of the
Disclosure Schedule) or where such failure would not or could not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect on the Company and the Company Subsidiaries taken as a whole;
(n) except as specifically disclosed in the Company Finan-
cial Statements and as will be specifically disclosed in the Closing Audit
Report, neither of the Company nor any Company Subsidiary has entered into
any transaction or arrangement under which the Company or any Company Sub-
sidiary directly or indirectly paid, lent or advanced any amount to or for
the account of, or purchased, sold, transferred or leased any properties or
services to (A) Seller, (B) any officer or director of the Company, of any
Company Subsidiary, or of Seller or of any affiliate of Seller or (C) any
Affiliate of Seller or the Company, any Company Subsidiary or of any such
officer of director; each outstanding transaction and arrangement of the
type described in this Section 3.8(n), including each such outstanding
transaction and arrangement specifically disclosed in the Company Financial
Statements and each such outstanding transaction entered into on or prior to
September 30, 1993, is set forth and described in Section 3.8(n) of the
Disclosure Schedule; and
(o) neither the Company nor any Company Subsidiary has
agreed or committed to do any of the foregoing, except as specifically
contemplated by this Agreement.
3.9 Compliance with Law; Governmental Authorizations.
(a) Neither the Company nor any Company Subsidiary is in violation of any
applicable Law relating to or affecting the operation, conduct or ownership
of the property or businesses of the Company or any of the Company
Subsidiaries, except for any violation or violations which would not or
could not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect on the Company and the Company Subsidiaries taken
as a whole.
(b) Except to the extent set forth in Section 3.16 of the
Disclosure Schedule, set forth in Section 3.9 of the Disclosure Schedule is
a true and complete list of each material Permit held or used by or for the
benefit of the Company or any Company Subsidiary, containing the date of
issuance and scheduled expiration date of each Permit and a description of
the scope of each Permit. Except as set forth in Section 3.9 of the
Disclosure Schedule, (i) no proceeding is pending nor, to the best knowledge
of Seller, the Company and each Company Subsidiary (each, an Attributable
Person ) after due inquiry, is any proceeding threatened, in which any
Person is seeking to revoke or deny the renewal of any material Permit and
no Attributable Person has reasonable ground to believe that any material
Permit will not in the ordinary course be renewed upon its expiration or
that the transactions contemplated hereby will make it more difficult for
the Company or any Company Subsidiary to renew or obtain each material
Permit, (ii) each material Permit is in full force and effect without any
default thereunder by the Company or any Company Subsidiary and in the
aggregate are sufficient for the conduct of their business as currently
conducted by the Company and the Company Subsidiaries in all material
respects, and (iii) neither the Company nor any Company Subsidiary has
received notice of any claim or charge that the Company or any Company
Subsidiary has breached any material Permit.
3.10 Proprietary Rights. Section 3.10 of the Disclosure Sched-
ule contains an accurate and complete list of all of the domestic and
foreign letters patent, patent applications, computer programs and software,
patent licenses and know-how licenses, trade names, common law trademarks,
service marks, trademark registrations and applications, service mark
registrations and applications and copyright registrations and applications
of the Company and the Company Subsidiaries (the Intellectual Property )
other than any property rights (including, but not limited to, customer
lists or other intangible property) as to which the Company or any Company
Subsidiary only has a security interest pursuant to the applicable Uniform
Commercial Code. Unless otherwise indicated therein, the Company or the
applicable Company Subsidiary, as the case may be, owns the entire right,
title and interest in and to the Intellectual Property listed in Section
3.10 of the Disclosure Schedule, and their use thereof does not infringe
upon the rights of any Person nor, to the best knowledge of each
Attributable Person after due inquiry, has any Person asserted or alleged
that their use thereof infringes upon the rights of any Person. Except as
set forth in Section 3.10 of the Disclosure Schedule, none of the
Intellectual Property is subject to any outstanding order, decree, judge-
ment, stipulation, settlement or Encumbrance. Except as set forth in
Section 3.10 of the Disclosure Schedule, there are no suits, actions, pro-
ceedings or other adverse claims pending or, to the best knowledge of each
Attributable Person after due inquiry, threatened, affecting or with respect
to the Intellectual Property. Except as set forth in Section 3.10 of the
Disclosure Schedule, upon consummation of the transactions contemplated by
this Agreement, each of the Company and the Company Subsidiaries will be
entitled to continue to use all Intellectual Property listed in Section 3.10
of the Disclosure Schedule upon the same terms applicable to the Company s
and each of the Company Subsidiary s use of such Intellectual Property prior
to consummation of the transaction. The computer programs and software
listed in Section 3.10 of the Disclosure Schedule constitute all of the
computer programs and software used by the Company and the Company Subsid-
iaries and are sufficient for the conduct of their businesses as currently
conducted by the Company and Company Subsidiaries. Except as set forth in
Section 3.10 of the Disclosure Schedule, Seller and its Affiliates (other
than the Company and the Company Subsidiaries) have no right or title to or
interest in any Intellectual Property or any trade secrets and other
proprietary rights used in the business of the Company or any of the Company
Subsidiaries as their businesses have been conducted prior to the date
hereof.
3.11 Taxes. Except as set forth in Section 3.11 of the Disclo-
sure Schedule:
(a) Seller has filed as part of a consolidated return, has
caused the Company to file, or will file or cause to be filed on or prior to
the Closing Date, all federal, state, local and foreign Tax (as defined in
Section 3.11(g) hereof) returns and Tax reports that are required to be
filed by, or with respect to, the Company or any Company Subsidiary on or
prior to the Closing Date (taking into account any extension of time to file
granted to or on behalf of the Company) (collectively, the Tax Returns ).
At the time filed, such Tax Returns were, or will be when filed, true,
complete and correct in all material respects. Seller, the Company and each
Company Subsidiary has timely paid all Taxes shown as due on each such Tax
Return. The accruals and reserves reflected in the Company s financial
statements for the period ended on the Closing Date are adequate to cover
all Taxes of the Company and each Company Subsidiary accrued through such
date for that and any prior periods in accordance with GAAP. There are no
liens for Taxes upon the assets of the Company or any Company Subsidiary
except liens for Taxes not yet due. There are no outstanding deficiencies,
assessments or proceedings for the collection of Taxes against or involving
the Company or any Company Subsidiary or any of their respective assets
except as listed in Section 3.11 of the Disclosure Schedule. Except for
this Agreement, all Tax-sharing, Tax indemnity or Tax allocation agreements
or similar Contracts or arrangements with respect to or involving the
Company or any Company Subsidiary shall be terminated as to the Company and
each Company Subsidiary on or prior to the Closing Date, and after such
date, neither the Company nor any Company Subsidiary shall be bound thereby
or have any liability thereunder. All federal, state, local and foreign
Taxes due and payable by or with respect to the Company and each Company
Subsidiary have been, or prior to the Closing Date will be, paid. Except as
disclosed in Section 3.11 of the Disclosure Schedule (a) there are no
waivers in effect of the applicable statutory period of limitation for Taxes
of the Company or any Company Subsidiary for any taxable period, (b) no
deficiency assessment or proposed adjustment with respect to any Tax
liability of the Company or any Company Subsidiary for any Taxable period is
pending or, to the best knowledge of each Attributable person after due
inquiry, threatened, and (c) the statute of limitations for the collection
or assessment of federal income Taxes due from the Company and the Company
Subsidiaries for all periods prior to 1985 are closed.
(b) No election under any of Section 108, 168, 338, 441,
472, 1017, 1033, or 4977 of the Internal Revenue Code of 1986, as amended
(the Code ) (or any predecessor provisions) has been made or filed by or
with respect to the Company or any Company Subsidiary. No consent to the
application of Section 341(f)(2) of the Code (or any predecessor provision)
has been made or filed by or with respect to the Company or any Company
Subsidiary or any of its assets. None of the assets of the Company or any
Company Subsidiary is an asset or property that is or will be required to be
treated as being (i) owned by any individual, partnership, joint venture,
corporation, trust, unincorporated organization, government or any
department or agency thereof and any other entity (a Person ) (other than
the Company or the Company Subsidiaries) pursuant to the provisions of
Section 168(f)(8) of the Internal Revenue Code of 1954, as amended and in
effect immediately before the enactment of the Tax Reform Act of 1986, or
(ii) tax-exempt use property within the meaning of Section 168(h)(1) of the
Code.
(c) Neither the Company nor any Company Subsidiary has
agreed to or is required to make any adjustment pursuant to Section 481(a)
of the Code or under any similar provision relating to Subchapter L of the
Code (or any predecessor provisions) or any similar provisions of Law, and
there is no application pending with any governmental authority, domestic or
foreign, having jurisdiction over the assessment, determination, collection
or other imposition of Taxes (each, a Taxing Authority ) requesting permis-
sion for any changes in any accounting method of the Company or any Company
Subsidiary. Neither the United States Internal Revenue Service (including
any successor agency, the IRS ) nor any other Taxing Authority has proposed
any such adjustment or change in accounting method.
(d) For all Tax years through the taxable years ended Decem-
ber 31, 1992, the Company and the Company Subsidiaries have been included in
a consolidated federal income Tax Return which includes Seller. For the
1993 Tax year and the taxable period ending on the Closing Date, the Company
and the Company Subsidiaries will be included in the consolidated federal
income Tax Return which includes Seller.
(e) Section 3.11 of the Disclosure Schedule sets forth all
state, local and foreign consolidated, combined and unitary Tax Returns for
the 1992 Tax years filed by or with respect to the Company or any Company
Subsidiary.
(f) Seller is not a foreign person within the meaning of
Section 1445(b)(2) of the Code.
(g) Tax (including with correlative meaning, the terms
Taxes and Taxable ) means (i) any income, gross receipts, ad valorem,
premium, excise, value-added, sales, use, transfer, franchise, license,
severance, stamp, occupation, service, lease, withholding, employment,
payroll, premium, property or windfall profits tax, alternative or add-on
minimum tax, or other tax, fee or assessment, together with any interest and
any penalty, addition to tax or additional amount imposed by any
governmental authority responsible for the imposition of any such tax, with
respect to the Company or any Company Subsidiary and (ii) any liability of
the Company or any Company Subsidiaries for the payment of any amount of
the type described in clause (i) as a result of the Company or any Company
Subsidiary being a member of an affiliated or combined group with, or a
successor to, or transferee of, any other corporation at any time on or
prior to the Closing Date.
3.12 Contracts.
(a) Except for business brokerage commitments entered into
in the ordinary course of business consistent with past practice or as
set forth in Section 3.12(a) of the Disclosure Schedule, neither the
Company nor any Company Subsidiary has, participates in or is bound by or
subject to (i) any Contract that contains any severance, parachute or
similar payment liabilities or obligations, (ii) any employment,
consultation or similar Contract, (iii) any Contract relating to the
disposition or acquisition of the stock or assets of, or any interest in,
any business enterprise other than with respect to collateral sold in the
normal course of business consistent with past practice in amounts not to
exceed $25,000 individually or $500,000 in the aggregate in any twelve (12)
month period, (iv) any Contract relating to capital expenditures by the
Company or any of the Company Subsidiaries and involving or likely to
involve future payments which, together with future payments under all other
Contracts relating to the same capital project, exceeds $100,000 in any one
year or exceeds $500,000 in the aggregate and is not cancelable by the
Company or a Company Subsidiary without penalty within 30 days, (v) any
other Contract which involves payments by the Company or any of the Company
Subsidiaries of $100,000 or more and is not cancelable without penalty
within 30 days, (vi) any lease, sublease, installment purchase or similar
Contract for personal property calling for annualized payments with respect
to such personal property in excess of $100,000, (vii) any indebtedness for
borrowed money or any indebtedness evidenced by any promissory notes,
(viii) any indebtedness of whatsoever nature (including without limitation
open account indebtedness) to Seller or any Affiliate of Seller (other than
the Company or any Company Subsidiary), or any Contract with Seller or any
Affiliate of Seller (other than the Company or any Company Subsidiary),
(ix) any Contract containing any covenant limiting the freedom of the
Company or any Company Subsidiary to engage in any line of business or
compete with any Person or in any geographic area (other than as may be set
forth in the respective corporate charters of the Company or any Company
Subsidiary), (x) any Contract limiting the right of the Company or any
Company Subsidiary to pay dividends or make distributions, or (xi) any other
Contract which involves payments by the Company and/or any Company Subsid-
iary(ies) of $100,000 or more. Seller has previously delivered to Buyer
each Contract set forth in Section 3.12(a) of the Disclosure Schedule. Each
Contract set forth in Section 3.12(a) of the Disclosure Schedule (and each
other material Contract to which the Company or any of the Company
Subsidiaries is a party) is (A) valid, binding and enforceable in accordance
with its terms against the Company and the Company Subsidiaries, as
applicable, and, to the best knowledge of each Attributable Person after due
inquiry, is valid, binding and enforceable in accordance with its terms
against the other parties thereto, in each case except that such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors rights
generally and the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought,
and (B) except as otherwise noted in Section 3.12(a) of the Disclosure
Schedule, is in full force and effect without any default thereunder by the
Company or any Company Subsidiary or, to the best knowledge of each
Attributable Person after due inquiry, by any other party thereto, except to
the extent that such default or failure to be valid, binding and enforceable
would not or could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company and the Company
Subsidiaries taken as a whole. Except as otherwise set forth in Section
3.12(a) of the Disclosure Schedule, none of Seller, the Company or any
Company Subsidiary has received written notice of any claim or charge that
the Company or any Company Subsidiary has breached any Contract, including
those set forth in Section 3.12(a) of the Disclosure Schedule.
(b) Each currently existing factoring arrangement and each
currently outstanding loan or extension of credit by the Company and each
Company Subsidiary (each, a Credit Arrangement ) was solicited, originated
and serviced and currently exists in full compliance with all applicable
requirements of Law, except where the failure to so comply would not or
could not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect on the Company and the Company Subsidiaries taken
as a whole. Each note and instrument evidencing a Credit Arrangement and
each loan agreement, credit agreement and security instrument related to
each Credit Arrangement constitutes a valid, legal and binding obligation of
the obligor thereunder, enforceable in accordance with the terms thereof,
except where the failure thereof would not or could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect on the Company and Company Subsidiaries taken as a whole. Except as
set forth in Section 3.12(b) of the Disclosure Schedule, each Credit Ar-
rangement is documented to accurately reflect the terms of such Credit Ar-
rangement and there are no oral modifications or amendments or additional
agreements related to any Credit Arrangement that are not reflected in the
records (including in the general financial reporting, factoring and loan
administration systems of the Company) of the Company or any Company Subsid-
iary which established or services such Credit Arrangement. Except with
respect to counterclaims raised in connection with legal actions initiated
by the Company as set forth in Section 3.14 of the Disclosure Schedule, no
claims of defense as to the enforcement of any Credit Arrangement have been
asserted, nor would any act or omission on the part of the Company or any
Company Subsidiary give rise to any claim or right of rescission, set-off,
counterclaim or defense, except in each case where such modifications,
amendments, agreements, claims, defenses, acts or omissions would not or
could not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect on the Company and the Company Subsidiaries taken
as a whole. Seller does not make any representation or warranty to Buyer as
to the collectibility of amounts owing under any of the Credit Arrangements
to the extent that such failure or inability to collect arises out of the
insolvency or bankruptcy of customers or borrowers or the inability of
customers or borrowers to pay. Section 3.12(b) of the Disclosure Schedule
contains true and correct copies of (i) the 1992 and 1993 factoring client
annual volume summary (in the case of factoring arrangements), (ii) the
finance client summary for the month ended January 31, 1994, (iii) the
factoring client sales summary for the month ended December 31, 1993 and
(iv) the factoring client daily aging summary for the month ended December
31, 1993.
3.13 Insurance. (a) Section 3.13 of the Disclosure Schedule
contains an accurate and complete list of all liability, property, fidelity,
workers compensation, directors and officers liability and other policies
of insurance, bonds or surety arrangements that insure the business,
properties, employees, operations or affairs of the Company or any Company
Subsidiary or affect or relate to the ownership, use or operations of any of
the properties of any of the Company or any Company Subsidiary. Except as
set forth in Section 3.13 of the Disclosure Schedule, to the best knowledge
of each Attributable Person after due inquiry, since January 1, 1990 neither
the Company nor any Company Subsidiary has been denied any insurance
coverage which it has requested.
(b) Neither the Company nor any Company Subsidiary is in
default with respect to any provision of any insurance policy issued for its
benefit nor has the Company or any Company Subsidiary failed to give any
notice or present any claim thereunder in due or timely fashion or as
required by any of such insurance policies which would result in failure to
recover any material amount in full under such policies.
3.14 Litigation. Except as set forth in Sections 3.11 or 3.14
of the Disclosure Schedule, there is no claim, action, suit, inquiry,
proceeding, arbitration or investigation by or before any court or
governmental or other regulatory, Tax or administrative agency or
commission, arbitrator or other tribunal pending or, to the best knowledge
of each Attributable Person after due inquiry, threatened, against the
Company or any Company Subsidiary, where the amount sought to be recovered
is in excess of $100,000 (or is unspecified) or in which punitive or
multiple damages or injunctive relief is being sought. Except as set forth
in Section 3.14 of the Disclosure Schedule, none of Seller, the Company or
any Company Subsidiary has received any written, or, to the best knowledge
of each Attributable Person after due inquiry, any other, notice of any
claim or assertion of liability on the part of the Company or any Company
Subsidiary, the realization of which would or could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on the
Company and the Company Subsidiaries taken as a whole. Except as set forth
in Section 3.14 of the Disclosure Schedule, neither the Company nor any
Company Subsidiary has been the subject of any proceeding or, to the best
knowledge of each Attributable Person after due inquiry, investigation by or
before any regulatory authority with jurisdiction over the Company or any
Company Subsidiary relating to such company s business practices, from
January 1, 1992 through the date hereof.
3.15 Consents and Approvals. Except for the requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR
Act ) or as set forth in Section 3.15 of the Disclosure Schedule, no
consent, approval or authorization of, or notice to, or declaration, filing
or registration with, any governmental or regulatory authority or any other
Person is required to be made or obtained by Seller, the Company or any
Company Subsidiary, or any Affiliate thereof, in connection with the execu-
tion, delivery and performance of this Agreement by Seller or the consum-
mation by Seller of the transactions contemplated hereby.
3.16 Environmental Matters.
(a) Except as set forth in Section 3.16 of the Disclosure
Schedule, the Company and each Company Subsidiary is in compliance with all
applicable Environmental Laws (as defined in Section 3.16 (j) hereof), which
compliance includes, but is not limited to, the possession by the Company
Company and each Company Subsidiary of all Permits and other governmental
authorizations required under applicable Environmental Laws, and compliance
with the terms and conditions thereof, except for any noncompliance or the
the absence of any Permits that would not or could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect on the Company and the Company Subsidiaries taken as a whole. Except
as set forth in Section 3.16 of the Disclosure Schedule, neither the
Company nor any Company Subsidiary has received any communication (written
or oral), whether from a domestic or foreign governmental authority, citi-
zens group, employee or otherwise, that alleges that the Company or any
Company Subsidiary is not in compliance with applicable Environmental Laws.
All Permits and other domestic or foreign governmental authorizations
currently held or used by the Company or any Company Subsidiary pursuant to
Environmental Laws are identified in Section 3.16 of the Disclosure Sched-
ule.
(b) Except as set forth in Section 3.16 of the Disclosure
Schedule, there is no Environmental Claim (as defined in Section 3.16(h)
hereof) pending or threatened against the Company or any Company Subsidiary
or, to the best knowledge of each Attributable Person after due inquiry,
against any Person or entity whose liability for any Environmental Claim the
Company or any Company Subsidiary has or may have retained or assumed either
contractually or by operation of Law, except for any Environmental Claim or
Claims that would not or could not reasonably be expected to have, individu-
ally or in the aggregate, a Material Adverse Effect on the Company and the
Company Subsidiaries taken as a whole.
(c) Except as set forth in Section 3.16 of the Disclosure
Schedule, to the best knowledge of each Attributable Person after due inqui-
ry, there are no past or present actions, activities, circumstances, condi-
tions, events or incidents, including, without limitation, the release,
emission, discharge, presence or disposal of any Material of Environmental
Concern (as defined in Section 3.16(i) hereof), that could form the basis of
any Environmental Claim against the Company or any Company Subsidiary as a
result of the past or present ownership, or participation in the management
(as such phrase is used in Section 3.16(f) hereof), by the Company or any
Company Subsidiary (or predecessor to any of them) of any real property,
which Environmental Claim or Claims would or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the
Company and the Company Subsidiaries taken as a whole.
(d) Except as set forth in Section 3.16 of the Disclosure
Schedule, neither the Company nor any Company Subsidiary has released,
emitted, discharged or disposed of any Material of Environmental Concern at,
in, on, under, over or from any property owned or operated by the Company or
any Company Subsidiary, except where such release, emission, discharge or
disposal would not or could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect on the Company and the Compa-
ny Subsidiaries taken as a whole.
(e) Except as set forth in Section 3.16 of the Disclosure
Schedule, neither the Company nor any Company Subsidiary has engaged in
activities that could result in the Company or any Company Subsidiary
forfeiting a secured creditor exemption in any Environmental Claim brought
pursuant to the Comprehensive Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. Section 9601 et seq., or an analogous Law,
except where such forfeiture would not or could not reasonably be expected
to have individually or in the aggregate, a Material Adverse Effect on the
Company and the Company Subsidiaries taken as a whole.
(f) There exists no facility in which the Company or any
Company Subsidiary participates in or may be deemed to participate in the
management (as that term has been defined by the United States
Environmental Protection Agency in its recently vacated rule found at 40
C.F.R. 300.1100(c) (1993)) based exclusively upon acts or events which occur
prior to the Closing. In the event that Seller breaches or has breached the
representation set forth in the immediately preceding sentence, then each
reference to "Loan Property", the "Company" or any "Company Subsidiary" in
this Section 3.16 shall be deemed to include a reference to the property or
properties, the existence of and conduct with respect to which results in a
breach of the immediately preceding sentence.
(g) For purposes of this Agreement, Environmental Claim
shall mean any claim, action, cause of action, investigation conducted
pursuant to an order, directive or similar demand issued by a domestic or
foreign governmental authority or third party, demand, suit, order or notice
(written or oral) by any person or entity alleging potential liability
(including, without limitation, potential liability for or requirement to
incur investigatory costs, cleanup costs, governmental response costs, natu-
ral resources damages, property damages, personal injuries, or penalties)
arising out of, based on or resulting from (i) the presence, or release into
the environment, of any Material of Environmental Concern at any location,
whether or not owned or operated by the Company, any Company Subsidiary or
any Participation Facility or (ii) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law.
(h) For purposes of this Agreement, Environmental Laws
shall mean all Laws relating to pollution or protection of human health or
the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata), including, without
limitation, Laws relating to emissions, discharges, releases or threatened
releases of Materials of Environmental Concern, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern.
(i) For purposes of this Agreement, Materials of Envi-
ronmental Concern shall mean chemicals, pollutants, contaminants, wastes,
hazardous or toxic substances, radionuclides, petroleum and petroleum
products.
(j) For purposes of this Agreement, Loan Property means
any property in which the Company or any Company Subsidiary presently holds
a security interest. Section 3.16 of the Disclosure Schedule contains an
accurate and complete list of all Loan Properties.
3.17 Employee Benefit Plans.
(a) Section 3.17(a) of the Disclosure Schedule contains
a true and complete list or description of each bonus, deferred
compensation, incentive compensation, stock purchase, stock option,
severance or termination pay, hospitalization or other medical, life or
other insurance, supplemental unemployment benefits, profit-sharing,
pension, or retirement plan, program, agreement or arrangement, and each
other employee benefit plan, program, agreement or arrangement, sponsored,
maintained or contributed to or required to be contributed to by Seller, the
Company, any Company Subsidiary or by any trade or business, whether or not
incorporated (an ERISA Affiliate ), that together with the Company would be
deemed a single employer within the meaning of section 4001(b) of the
Employee Retirement Income Security Act of 1974, as amended, and the rules
and regulations promulgated thereunder ( ERISA ), for the benefit of any em-
ployee or former employee of the Company or any Company Subsidiary, whether
formal or informal and whether legally binding or not (the Plans ).
Section 3.17 of the Disclosure Schedule identifies each of the Plans that
is an employee welfare benefit plan or employee pension benefit plan, as
such terms are defined in sections 3(1) and 3(2) of ERISA (such plans being
hereinafter referred to collectively as the ERISA Plans ). Except as
disclosed in Section 3.17 of the Disclosure Schedule, neither Seller, the
Company, any Company Subsidiary nor any ERISA Affiliate has any formal plan
or commitment, whether legally binding or not, to create any additional Plan
or modify or change any existing Plan that would affect any employee or
terminated or retired employee of the Company or any Company Subsidiary and
is not required by Law.
(b) With respect to each of the Plans, Seller has heretofore
delivered to Buyer true and complete copies of each of the following
documents:
(i) a copy of the Plan (including all amendments
thereto);
(ii) a copy of the actuarial report, if required
under ERISA, with respect to each such Plan for the last three
years;
(iii) a copy of the most recent Summary Plan
Description ( SPD ), together with all Summaries of Material Modi-
fication issued with respect to such SPD, required under ERISA
with respect to such Plan, and all other material employee commu-
nications relating to such Plan;
(iv) all Contracts relating to the Plans with
respect to which the Company or any Company Subsidiary may have
any liability, including without limitation insurance contracts,
investment management agreements, subscription and participation
agreements and record keeping agreements; and
(v) the most recent determination letter received
from the IRS with respect to each Plan that is intended to be
qualified under Section 401 of the Code.
(c) No liability under Title IV of ERISA has been incurred
by Seller, the Company, any Company Subsidiary or any ERISA Affiliate since
the effective date of ERISA that has not been satisfied in full, and no
condition exists that presents a material risk to any such party of
incurring a liability under such Title, other than liability for premiums
due the Pension Benefit Guaranty Corporation ( PBGC ), which payments have
been or will be made when due. To the extent this representation applies to
sections 4064, 4069 or 4204 of Title IV of ERISA, it is made not only with
respect to the ERISA Plans but also with respect to any employee benefit
plan, program, agreement or arrangement subject to Title IV of ERISA to
which Seller, the Company, any Company Subsidiary or any ERISA Affiliate
made, or was required to make, contributions during the five (5)-year period
ending on the last day of the Company's most recent fiscal year.
(d) The PBGC has not instituted proceedings to terminate any
of the ERISA Plans and no condition exists that presents a material risk
that such proceedings will be instituted.
(e) With respect to each of the ERISA Plans that is subject
to Title IV of ERISA, the present value of accrued benefits under such Plan,
based upon the actuarial assumptions used for funding purposes in the most
recent actuarial report prepared by such Plan's actuary with respect to such
Plan, did not, as of its latest valuation date, exceed the then current
value of the assets of such Plan allocable to such accrued benefits.
(f) Neither the Company nor any Company Subsidiary, any of
the ERISA Plans, any trust created thereunder, nor any trustee or adminis-
trator thereof has engaged in a transaction or has taken or failed to take
any action in connection with which the Company or any Company Subsidiary
could be subject to either a civil penalty assessed pursuant to section 409
or 502(i) of ERISA or a tax imposed pursuant to section 4975, 4976 or 4980B
of the Code.
(g) Full payment has been made, or will be made in
accordance with section 404(a)(6) of the Code, of all amounts which Seller,
the Company, any Company Subsidiary or any ERISA Affiliate is required to
pay under the terms of each of the ERISA Plans and section 412 of the Code,
and all such amounts properly accrued through the Closing with respect to
the current plan year thereof will be paid, or be caused to be paid, by
Seller on or prior to the Closing or will be properly recorded on the
Closing Audit Report; and none of the ERISA Plans or any trust established
thereunder has incurred any accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the Code), whether or not waived, as
of the last day of the most recent fiscal year of each of the ERISA Plans
ended prior to the date of this Agreement.
(h) None of the ERISA plans is a multiemployer plan, as
such term is defined in section 3(37) of ERISA.
(i) Each of the Plans has been operated and administered in
all material respects in accordance with applicable Laws, including but not
limited to ERISA and the Code.
(j) Each of the ERISA Plans that is intended to be quali-
fied within the meaning of section 401(a) of the Code is so qualified or
will be so qualified by Seller within the applicable remedial amendment
period.
(k) Each of the ERISA Plans that is intended to satisfy the
requirements of section 501(c)(9) of the Code has so satisfied such require-
ments.
(l) No amounts payable under the Plans will fail to be
deductible for federal income tax purposes by virtue of section 280G of the
Code.
(m) No leased employee, as that term is defined in section
414(n) of the Code, performs services for the Company or any Company
Subsidiary.
(n) No Plan provides benefits, including without limitation
death or medical benefits (whether or not insured), with respect to current
or former employees after retirement or other termination of service (other
than (i) coverage mandated by applicable Law, (ii) death benefits or
retirement benefits under any employee pension benefit plan, as that term
is defined in section 3(2) of ERISA, (iii) deferred compensation benefits
accrued as liabilities on the Company Financial Statements and the books of
Seller, the Company, a Company Subsidiary or the ERISA Affiliates, or
(iv) benefits the full cost of which is borne by the current or former
employee (or his beneficiary).
(o) With respect to each Plan that is funded wholly or
partially through an insurance policy, there will be no liability of Seller,
the Company, any Company Subsidiary or an ERISA Affiliate, as of the Closing
Date, under any such insurance policy or ancillary agreement with respect to
such insurance policy in the nature of a retroactive rate adjustment, loss
sharing arrangement or other actual or contingent liability arising wholly
or partially out of events occurring prior to the Closing Date.
3.18 Labor Matters. (a) Section 3.18(a) of the Disclosure
Schedule sets forth a list containing the name, position, date of hire,
current base salary or wage rate and aggregate annual compensation
(including salary, wages, bonuses and commissions) for each full-time and
part-time employee of the Company and each Company Subsidiary. Section
3.18(a) of the Disclosure Schedule also sets forth the Company s and Company
Subsidiaries policy regarding holiday, accrued holiday, vacation and
accrued vacation, sick leave and long-service entitlement (if any), and
permitted time off due as compensation for additional time worked for each
full-time and part-time employee of the Company and each Company Subsidiary.
(b) Neither the Company nor any Company Subsidiary is party
to any labor or collective bargaining agreement and there are no labor or
collective bargaining agreements which pertain to employees of the Company
or any Company Subsidiary.
(c) No employees of the Company or any Company Subsidiary
are represented by any labor organization. No labor organization or group
of employees of the Company or any Company Subsidiary has made a pending
demand for recognition or certification, and there are no representation or
certification proceedings or petitions seeking a representation proceeding
presently pending or threatened to be brought or filed with the National
Labor Relations Board or any other labor relations tribunal or authority.
To the best knowledge of each Attributable Person after due inquiry, there
are no organizing activities involving the Company or any Company Subsidiary
pending with any labor organization or group of employees of the Company or
any Company Subsidiary.
(d) There are no strikes, work stoppages, slowdowns,
lockouts, material arbitrations or material grievances or other material
labor disputes pending or threatened against or involving the Company or any
Company Subsidiary. Except as disclosed in Section 3.18(d) of the Disclo-
sure Schedule, there are no unfair labor practice charges, grievances or
complaints pending or threatened by or on behalf of any employee or group of
employees of the Company or any Company Subsidiary which, if resolved
against the Company or such Company Subsidiary, as the case may be, would or
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company and the Company Subsidiaries taken as
a whole.
(e) Except as set forth in Section 3.18(e) of the Disclosure
Schedule, there are no complaints, charges or claims against the Company or
any Company Subsidiary pending or threatened to be brought or filed, with
the Company, any Company Subsidiary or any public or governmental authority,
arbitrator or court based on, arising out of, in connection with, or
otherwise relating to the failure to hire, employment or termination of
employment by the Company or any Company Subsidiary, of any individual.
(f) The Company and each Company Subsidiary is in compliance
with all Laws relating to the employment of labor, including all such Laws
relating to wages, hours, collective bargaining, discrimination, civil
rights, safety and health, workers compensation and the collection and
payment of withholding and/or social security, Medicare and similar Taxes
except for non-compliance which would not or could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect on the Company and the Company Subsidiaries taken as a whole.
(g) There has been no mass layoff or plant closing as
defined by the Worker Adjustment and Retraining Notification Act or any
similar state or local plant closing Law ( WARN ) prior to Closing.
(h) Copies of all policy manuals, handbooks, notices to
employees and related materials applicable to employees of the Company or
any Company Subsidiary have been provided by Seller to Buyer on or prior to
the date hereof.
(i) Section 3.18(i) of the Disclosure Schedule contains a
list of each employee of the Company and of each Company Subsidiary who is
on probation, subject to disciplinary action or participating in any
employee assistance or counseling program and a description of the nature of
and basis for such probation, disciplinary action or participation.
3.19 Bank Accounts. Section 3.19 of the Disclosure Schedule
sets forth a list of all bank and other financial institution accounts
maintained by the Company or any Company Subsidiary.
3.20 Real Property. Section 3.20 of the Disclosure Schedule
contains an accurate and complete list of all interests in real property and
buildings and structures of the Company and each Company Subsidiary, includ-
ing a brief description of each such parcel, the record title holder of the
owned property or the lessor of the leased real property, a list of the
deeds or leases and any other instruments under which such real property is
held (or which pertain to the title to such real property or the possession
or use thereof), the location thereof, the improvements thereon and all
Encumbrances which pertain to the interests of each of the Company and each
Company Subsidiary in such real property. Except as lien holder or secured
party or except as described in Section 3.20 of the Disclosure Schedule, the
Company and each Company Subsidiary, as the case may be, has good and
indefeasible title in fee simple to all of the real property and buildings
specified as owned by it in Section 3.20 of the Disclosure Schedule, owns
all leasehold estates and other rights purported to be granted by the leases
or other agreements listed therein and has such title or such leasehold
estate in all such listed real property and buildings as is required for the
conduct of its businesses, as presently conducted, in each case free and
clear of all Encumbrances, except:
(i) Liens for Taxes, easements or governmental
charges or levies if the same shall not at the time be delinquent
or thereafter can be paid without penalty, or are being contested
in good faith by appropriate proceedings and would not or could
not reasonably be expected to have, individually or in the aggre-
gate, a Material Adverse Effect on the Company and the Company
Subsidiaries taken as a whole;
(ii) such imperfections of title, if any, as do
not individually or in the aggregate materially detract from the
value or marketability of such real property as presently used or
materially interfere with such real property s present, or to the
best knowledge of each Attributable Person after due inquiry,
proposed, use; and
except as set forth in Section 3.20 to the Disclosure Schedule, all of the
buildings and structures to the extent owned or leased by the Company or any
Company Subsidiary are in good operating condition and repair, suitable for
the purposes for which they are being used and each has adequate rights of
ingress and egress for the operation of the businesses of the Company and
each Company Subsidiary in the ordinary course of business. All leases of
real property and improvements (if any) thereon which are listed in Section
3.20 of the Disclosure Schedule are in full force and effect according to
their terms and there are no outstanding defaults by the Company or any
Company Subsidiary (nor, to the best knowledge of each Attributable Person
after due inquiry, are any of the other parties thereto in default) thereun-
der, which default in either case would or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the
Company and the Company Subsidiaries taken as a whole. Except as set forth
in Section 3.20 of the Disclosure Schedule, upon consummation of the
transactions contemplated by this Agreement, each of the Company and the
Company Subsidiaries will be entitled to continue to use or possess all real
property currently owned or leased by them and used in their respective
businesses.
3.21 Personal Property. Section 3.21 of the Disclosure Schedule
sets forth a list of all personal property owned by the Company and each
Company Subsidiary and identifies and sets forth the tax basis for each item
of personal property with a book value equal to or greater than $25,000.
Except as indicated in Section 3.21 of the Disclosure Schedule, each of the
Company and the Company Subsidiaries has good and valid title to all
tangible personal property owned by it, free and clear of all Encumbrances,
except for those referred to in clause (i) or (ii) of Section 3.20 hereof.
All leases of tangible personal property which are material to the proper-
ties, business, operations, prospects or financial condition of each of the
Company and the Company Subsidiaries are in full force and effect according
to their terms and there are no outstanding defaults by the Company or any
Company Subsidiary (nor, to the best knowledge of each Attributable Person
after due inquiry, are any of the other parties thereto in default)
thereunder, which default in either case would or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect on the Company and the Company Subsidiaries taken as a whole.
3.22 Intercompany Matters. Except as set forth in Section 3.22
of the Disclosure Schedule, since January 1, 1993, Seller and Seller's
Affiliates have conducted their respective business relationships with the
Company and the Company Subsidiaries only in the ordinary course of business
and have not dealt with or entered into any Contracts with the Company or
any of the Company Subsidiaries on terms and conditions less favorable to
the Company or any of the Company Subsidiaries than the terms and provisions
with respect to similar dealings or Contracts with third parties. Except as
set forth in Section 3.22 of the Disclosure Schedule, since January 1, 1993,
neither Seller nor any of its Affiliates has provided or has caused to be
provided to the Company or any Company Subsidiary, any products, services,
equipment, facilities or similar items.
3.23 Brokers and Finders. No broker, finder, investment banker
or other Person is entitled to any brokerage, finder or other similar fee or
commission in connection with the transactions contemplated hereby based
upon arrangements made by or on behalf of Seller, the Company or any Company
Subsidiary.
3.24 Disclosure. No representation or warranty by Seller con-
tained in this Agreement and no statement contained in the Disclosure Sched-
ule or any certificate, instrument or other document delivered by or on
behalf of Seller to Buyer pursuant to this Agreement contains or will
contain any untrue statement of a material fact, or, to the best knowledge
of each Attributable Person after due inquiry, omits or will omit to state
any material fact necessary, in light of the circumstances under which it
was or will be made, to make the statements herein or therein not mis-
leading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND GFC
Buyer and GFC hereby represent and warrant to Seller as follows:
4.1 Corporate Organization. Each of Buyer and GFC is a corpora-
tion duly organized, validly existing and in good standing under the laws of
its respective state of incorporation.
4.2 Authorization, Etc. Each of Buyer and GFC has full corpo-
rate power and authority to execute and deliver this Agreement and to carry
out the transactions contemplated hereby. The Board of Directors of each of
Buyer and GFC has duly approved and authorized the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby,
and no shareholder approval or other corporate proceedings on the part of
Buyer or GFC are necessary to approve and authorize the execution and
delivery of this Agreement by Buyer and GFC and the consummation by Buyer
and GFC of the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by each of Buyer and GFC. This
Agreement constitutes a valid and binding obligation of each of Buyer and
GFC, assuming the due execution of the Agreement by Seller, enforceable
against each of Buyer and GFC in accordance with its terms, except that (a)
such enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any preceding
therefor may be brought.
4.3 No Violation. The execution and delivery of this Agreement
by Buyer and GFC will not (a) conflict with or result in a violation of any
provision of the charter or bylaws of either of Buyer or GFC, (b) conflict
with or result in a violation by Buyer or GFC of any Law, or (c), except as
set forth in Section 4.3 of the Disclosure Schedule or except for the
applicable requirements of the HSR Act, require any consent, approval or
authorization of, or notice to, or declaration, filing or registration with,
any governmental or regulatory authority or any other Person in connection
with the execution, delivery and performance of this Agreement by Buyer or
GFC or the consummation by Buyer or GFC of the transactions contemplated
hereby.
4.4 Acquisition for Investment. Buyer is acquiring the Company
Common Stock solely for its own account and not with a view to any distribu-
tion or other disposition of such stock or any part thereof, or interest
therein, except in accordance with the Securities Act of 1933, as amended
(the Securities Act ).
4.5 No Brokers or Other Fees. Except for fees payable to
Salomon Brothers Inc which will be paid by Buyer, no broker, finder, invest-
ment banker or other Person is entitled to any brokerage, finder or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of Buyer or GFC.
ARTICLE V
COVENANTS AND AGREEMENTS
5.1 Conduct of Business. Seller will conduct, and cause its
Affiliates to conduct, their respective business relationships with each of
the Company and each Company Subsidiary only in the ordinary course;
provided, however, that except as specifically provided for by the terms of
this Agreement, without the prior written consent of Buyer, in no event will
Seller permit, and in no event has Seller permitted since the Audit Date,
the Company or any Company Subsidiary to enter into any Contract or transac-
tion with Seller or any Affiliate of Seller on terms and conditions less
favorable to such company than the terms and conditions which could be
obtained by such company with respect to similar Contracts or transactions
with third parties. Seller further represents and covenants that, except
(i) as disclosed in Section 5.1 of the Disclosure Schedule or (ii) as con-
sented to by Buyer in writing, from and after the Audit Date and until the
Closing Date, Seller has and shall:
(a) use(d) reasonable efforts consistent with good business
judgment to: (i) preserve intact the present business organization of the
Company and the Company Subsidiaries, (ii) keep (kept) available the
services of the employees of the Company and each Company Subsidiary,
(iii) maintain(ed) in full force and effect all Permits of the Company and
the Company Subsidiaries and (iv) preserve(d) the present relationships of
the Company and the Company Subsidiaries with Persons having business
dealings with them;
(b) cause(d) the Company and the Company Subsidiaries to be
operated in the ordinary course of business consistent with prior practices;
(c) not permit(ted) the Company or any Company Subsidiary to
(i) issue or sell, or commit to issue or sell, any shares of capital stock
or other securities of the Company or any Company Subsidiary, any options,
warrants or commitments or rights of any kind with respect thereto or any
convertible or exchangeable securities, (ii) directly or indirectly
purchase, redeem or otherwise acquire or dispose of any shares of capital
stock or other securities of the Company or any Company Subsidiary,
(iii) except in accordance with past practices as described in Section 5.1
of the Disclosure Schedule or as specifically provided in this Agreement,
declare, set aside or pay, or commit to pay, any dividend or other distribu-
tion on the capital stock of the Company or any Company Subsidiary,
(iv) borrow or agree to borrow any funds or incur, whether directly or by
way of guarantee, any obligation for borrowed money, other than in the
ordinary course of business and consistent with past practices, (v) permit
any of the property or assets of the Company or any Company Subsidiary
(real, personal or mixed, tangible or intangible) to be subjected to any
Encumbrance or otherwise permit or allow the disposition of any property or
assets of the Company or any Company Subsidiary (real, personal or mixed,
tangible or intangible), other than in the ordinary course of business and
consistent with past practices, (vi) make any capital expenditure or execute
any lease, lease renewal or lease amendment or incur any commitment or
liability therefor, (vii) make or permit to be made any amendment to its
charter or bylaws, (viii) make any change in financial reporting or account-
ing methods or practices of the Company or any Company Subsidiary (including
without limitation any change with respect to establishment of reserves,
losses (including without limitation incurred but not reported losses) or
any change in depreciation or amortization policies or rates adopted by it),
except as required by Law or GAAP and as set forth in Section 5.1 of the
Disclosure Schedule and except to the extent required by the Closing Audit
or Schedule 1.3 hereto, (ix) knowingly waive or commit to waive any rights
the waiver of which would or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company
and the Company Subsidiaries taken as a whole, (x) make any change in any of
its factoring, asset-based lending or tax or accounting practices or
policies, (xi) effect any amendment, termination, waiver, disposal or lapse
of, or other failure to preserve, any material Permit of the Company or any
Company Subsidiary, or (xii) agree to do any of the foregoing;
(d) except as set forth in Section 5.1(d) of the Disclosure
Schedule or as specifically provided in this Agreement, cause(d) the Company
and the Company Subsidiaries not to (i) make or agree to make any increase
in the compensation payable or to become payable to any employee, agent,
consultant or other similar representative of the Company or any Company
Subsidiary, or make or agree to make any increase in any bonus or incentive
compensation or commission Plan, except in each case for any such increases
pursuant to agreements in existence on January 1, 1993 with respect to any
such Plan or for increases that were made in the ordinary course of business
consistent with past practices and that, since January 1, 1993, did not
result in an increase of more than 6% of the respective salary, wages or
compensation of any such Person, (ii) pay or agree to pay to any employee
welfare, pension, retirement, profit-sharing or similar payment or
arrangement for any personnel except pursuant to existing Plans and arrange-
ments described in Section 3.17 of the Disclosure Schedule, or (iii) enter
into any new employment, management or consulting agreement;
(e) cause(d) the Company and the Company Subsidiaries not to
add to or modify any of the Plans, arrangements or practices described in
Section 3.17 of the Disclosure Schedule which addition or modification would
affect any of the employees of the Company or the Company Subsidiaries other
than (i) contributions in accordance with the normal practices of the
Company and the Company Subsidiaries, (ii) the extension of coverage to any
other employees who become eligible in accordance with the terms thereof or
(iii) amendments or modifications reasonably necessary to comply with
applicable Law, in each case, other than in the normal course of business
consistent with past practice;
(f) maintain(ed) the books and records of the Company and
each Company Subsidiary;
(g) cause(d) the Company and the Company Subsidiaries not to
make any single loan in excess of $5 million or loans exceeding $20 million
in the aggregate, in each case without the prior written consent of Buyer;
(h) cause(d) the Company and the Company Subsidiaries not to
classify or treat as income customer credit balances in excess of $80,000
for each of the months ending December 31, 1993 and January 31 and Febru-
ary 28;
(i) cause(d) all reserves and other similar amounts
reflected in the books and records of the Company and each Company
Subsidiary to be established and reflected on a basis consistent with those
reserves and other similar amounts and reserving methods followed by the
Company or such Company Subsidiary at January 1, 1993 and maintain loan loss
reserves of the Company at not less than $6.4 million;
(j) maintain(ed) net nonperforming assets at a level not
greater than $15.0 million without a corresponding dollar-for-dollar
increase in loss reserves; and
(k) cause(d) the Company and each Company Subsidiary not to
participate in or take any action which may be deemed to constitute
participation in the management of any collateral comprised of an interest
in real property or from commencing foreclosure proceedings with respect to
or undertaking any other action to take possession of any collateral
comprised of an interest in real property.
5.2 Additional Financial Statements. As soon as is reasonably
practicable, Seller shall furnish to Buyer all monthly and quarterly
financial statements of the Company and the Company Subsidiaries prepared in
the ordinary course of Seller's and Company's business for each month and
all quarterly periods subsequent to September 30, 1993, which shall be
prepared on a basis consistent with the Company Financial Statements and
Interim Company Financial Statements, subject to normal year-end adjustments
and the absence of footnote disclosure.
5.3 Access to Books, Records and Properties.
(a) Seller agrees that from the date hereof through the
Closing Date, it will give or cause to be given (at no charge, cost or
expense to Buyer) to Buyer and its auditors and other representatives and
agents full access to all the premises, properties, books, records and
employees of the Company and each Company Subsidiary, and to the extent that
the same pertain to the Company or any Company Subsidiary, the premises,
properties, books and records of Seller and Seller s Affiliates, and to
cause their respective officers and employees to furnish to Buyer such
financial and operating data and other information with respect to the
properties and the conduct of the businesses of the Company and each Company
Subsidiary, and to the extent the same pertain to any Participation Facility
or Loan Property, the opportunity, at Buyer s expense, to conduct phase I
environmental assessments and to the extent Seller can provide access, the
premises, properties, books and records of each Participation Facility and
each Loan Property securing a non-performing Credit Arrangement, as Buyer
shall from time to time request; provided, however, that any such investi-
gation shall be conducted during normal business hours and in such manner as
not to interfere unreasonably with the operation of the businesses of Sell-
er, the Company, any Company Subsidiary, any Participation Facility or any
non-performing Loan Property.
(b) Except in accordance with Seller s record retention
policy (the Record Retention Policy ), a copy of which has previously been
provided to Buyer, Seller agrees not to destroy (or permit the Company or
any Company Subsidiary to destroy) at any time any files or records which
are referred to in this Section 5.3 without giving reasonable notice to
Buyer and within thirty (30) days of receipt of such notice Buyer may cause
to be delivered to it the records intended to be destroyed, at Buyer s
expense.
(c) Any investigation conducted by or on behalf of Buyer
pursuant to this Section 5.3 or otherwise shall not affect Buyer s right to
rely on the representations and warranties of Seller set forth herein.
5.4 Filings and Consents. (a) To the extent not already so
done, as soon as practicable after execution and delivery of this Agreement,
Buyer and Seller shall make all additional filings required under the HSR
Act relating to the transactions contemplated hereby. The parties hereto
will cooperate with each other with respect to obtaining, as promptly as
practicable, all necessary consents, approvals, authorizations and agree-
ments of, and the giving of all notices and make all other filings with, any
third parties, including governmental authorities, necessary to authorize,
approve or permit the consummation of the transactions contemplated hereby.
(b) Seller will take (and will cause each of the Company and
Company Subsidiaries to take), (i) all commercially reasonable steps neces-
sary or desirable, and proceed diligently and in good faith and use all
commercially reasonable efforts, to obtain as promptly as practicable the
approvals, authorizations and consents listed in Section 3.6 of the
Disclosure Schedule and (ii) provide such information and communications to
the Persons requiring such approvals, authorizations and consents as Buyer
or such Persons may reasonably request.
5.5 Tax Matters.
(a) Section 338 Elections and Forms. With respect to
Buyer s acquisition of the Company Common Stock hereunder, at Buyer s option
Seller and Buyer shall jointly make all available Section 338(h)(10) Elec-
tions (as defined in Section 5.5(k)(iv) hereof) in accordance with applica-
ble Tax Laws on a timely basis and as set forth herein. Seller and Buyer
will supply in advance to one another copies of all correspondence, filings
or communications (or memoranda setting forth the substance thereof) to be
sent or made by Buyer or Seller or their respective representatives to or
with the IRS relating to any Section 338 Elections (as defined in Section
5.5(k)(ii) hereof). Buyer and Seller agree to report the transfers under
this Agreement consistent with any Section 338(h)(10) Elections, and shall
take no position contrary thereto unless required to do so by applicable Tax
Laws pursuant to a determination (as described in Section 1313 of the
Code).
(b) Buyer shall be responsible for the preparation and
filing of all Section 338 Forms (as defined in Section 5.5(k) (i) hereof) in
accordance with applicable Tax Laws and the terms of this Agreement, and
Buyer shall deliver such forms and related documents to Seller at least
forty (40) days prior to the date such Section 338 Forms are required to be
filed under applicable Tax Laws for Seller s review and approval (such
approval not to be unreasonably withheld). If reasonably acceptable to
Seller in all respects, Seller shall execute and deliver to Buyer such docu-
ments or forms as are reasonably requested by Buyer and are required by any
Tax Laws to properly complete the Section 338 Forms, no more than twenty
(20) days after the date such documents or forms are requested by Buyer.
(c) If the Section 338(h)(10) Election is made, Seller and
Buyer will allocate the Modified Aggregate Deemed Sale Price, as computed
under applicable Treasury Regulations (or similar state law provisions),
among the Company s and the Company Subsidiaries assets for tax purposes in
accordance with Buyer s and Seller's joint reasonable determination of their
fair market values.
(d) Taxable Periods Ending On or Before the Closing Date.
Seller shall be liable for, shall pay and shall indemnify and hold Buyer and
the Company and Company Subsidiaries harmless against, all Taxes of the
Company and Company Subsidiaries for any taxable year or taxable period
ending on or before the Closing Date due or payable with respect to the
operations, assets or business of Seller, the Company and Company
Subsidiaries on or before the Closing Date, including any Taxes resulting
from the making of the Section 338 Elections and any liability for Taxes
pursuant to Treasury Regulation Section 1.1502 6, (or any similar provision
of Law), but only to the extent that the amount of such Taxes exceeds the
amount of Taxes currently payable that have been reserved for on the Audit
Date balance sheet included in the Closing Audit Report. Seller shall
determine the amount of taxable income of the Company and Company
Subsidiaries for the taxable year ending on the Closing Date on the basis of
its permanent records (including workpapers) in a manner consistent with
Treasury Regulation Section 1.1502-76(b)(4)(i) and (ii). Such determination
shall be subject to the dispute resolution procedures of subsection (j) of
this Section 5.5.
(e) Taxable Periods Commencing After the Closing Date.
Buyer shall be liable for, shall pay and shall indemnify and hold Seller or
any Affiliate harmless against, any and all Taxes of the Company and Company
Subsidiaries for any taxable year or taxable period commencing after the
Closing Date and for any Taxes accrued on the Audit Date balance sheet
included in the Closing Audit Report other than any Taxes resulting from
Section 338 Elections.
(f) Taxable Periods Commencing On or Before the Closing Date
and Ending After the Closing Date. Any Taxes for a taxable period beginning
on or before the Closing Date and ending after the Closing Date (the Clos-
ing Period ) with respect to the Company and Company Subsidiaries shall be
apportioned between Seller and Buyer based on the actual operations of the
Company and Company Subsidiaries during the portion of such period ending on
the Closing Date (the Pre-Closing Period ) and the portion of such period
beginning on the day following the Closing Date but with Seller bearing the
effect of all Section 338 Elections, and for purposes of subsections (d),
(e), and (g) of this Section 5.5, each portion of such period shall be
deemed to be a taxable period. With respect to any Taxes for the Closing
Period:
(i) at least thirty days prior to the due date for
the payment of Taxes with respect to the Closing Period, Buyer
shall present Seller with a schedule detailing the computation of
the Pre-Closing Period Tax;
(ii) twenty-five (25) days after Buyer presents
Seller with the schedule described in clause (i) above, Seller
shall pay the Company and Company Subsidiaries the amount of the
undisputed Pre-Closing Period Tax as computed by Buyer to the
extent such Taxes have not been reserved for on the Audit Date
balance sheet included in the Closing Audit Report, and Buyer
shall pay all other Taxes with respect to the Closing Period; and
(iii) in the event Seller disputes Buyer s compu-
tation of the Pre-Closing Period Tax or any of the payments de-
scribed in clause (ii) above, Seller shall not be required to pay
any disputed amount requested pending the resolution of such
dispute in accordance with subsection (j) of this Section 5.5. If
upon such resolution it is determined that any of such disputed
amount is payable to Buyer and such disputed amount payable to
Buyer has not been paid to Buyer as of the expiration of the
period described in clause (ii) above (the Due Date ), Seller
shall pay to Buyer, in addition to such disputed amount payable to
Buyer, interest computed thereon at the applicable federal rate
for large corporate underpayments (within the meaning of Section
6621 of the Code) in effect from time to time from the Due Date to
the date of payment.
(g) Refunds or Credits. Except as otherwise set forth in
this Agreement, any refunds or credits of Taxes, to the extent that such
refunds or credits are attributable to taxable periods ending on or before
the Closing Date and are in excess of those reflected on the Audit Date
balance sheet included in the Closing Audit Report, shall be for the account
of Seller, and, to the extent that such refunds or credits are attributable
to taxable periods beginning after the Closing Date or are reflected on the
Audit Date balance sheet included in the Closing Audit Report, such refunds
or credits shall be for the account of Buyer. To the extent that such
refunds or credits are attributable to Taxes for the Closing Period that are
described in Section 5.5(f), such refunds and credits shall be for the
account of the party who bears responsibility for such Taxes pursuant to
Section 5.5(f). Buyer shall cause the Company and Company Subsidiaries
promptly to forward to Seller or to reimburse Seller for any such refunds or
credits due Seller pursuant to this subsection (g) after receipt thereof by
any of Buyer, the Company or any Company Subsidiary of an aggregate of at
least $10,000 of such refunds or credits that are for the account of Seller
hereunder, and Seller shall promptly forward to Buyer or reimburse Buyer for
any refunds or credits due Buyer after receipt thereof by Seller of an
aggregate of at least $10,000 of such refunds or credits that are for the
account of Buyer hereunder; provided, however, that the refunding party
shall be entitled to deduct from the amount to be refunded all reasonable
costs and expenses incurred by such refunding party in obtaining such
refund, but such deduction shall not be included in calculating whether the
$10,000 refund and credit threshold noted above has been reached.
(h) Mutual Cooperation. As soon as practicable, but in any
event within fifteen (15) days after Seller s or Buyer s request, as the
case may be, Buyer shall deliver to Seller, or Seller shall deliver to
Buyer, as the case may be, such information and other data relating to the
Tax Returns and Taxes of the Company and Company Subsidiaries and shall make
available such knowledgeable employees of Seller, Buyer, the Company or
Company Subsidiaries or any of their Affiliates, as the case may be, as
Seller or Buyer, as the case may be, may reasonably request, including
providing the information and other data customarily required by Seller or
Buyer, as the case may be, to cause the completion and filing of all Tax
Returns for which it has responsibility or liability under this Agreement or
to respond to audits by any Taxing Authorities with respect to any Tax
Returns or Taxes for which it has any responsibility or liability under this
Agreement or to otherwise enable Seller or Buyer, as the case may be, to
satisfy its accounting or tax requirements. Notwithstanding Sections 5.3(b)
and 5.7 hereof, for a period of seven years from and after the Closing,
Buyer shall, and shall cause the Company and Company Subsidiaries to,
maintain and make available to Seller on Seller s reasonable request, and
Seller shall, and shall cause its Affiliates to, maintain and make available
to Buyer, on Buyer s reasonable request, copies of any and all information,
books and records referred to in this Section 5.5(h). After such seven-year
period, Seller, Buyer or the Company and Company Subsidiaries may dispose of
such information, books and records, provided that prior to such disposition
the other party hereto shall be offered the opportunity to take possession
of such information, books and records.
(i) Contests. Whenever any Taxing Authority asserts a
claim, makes an assessment, or otherwise disputes the amount of Taxes for
which Seller is or may be liable under this Agreement, Buyer shall promptly
inform Seller and Seller shall have the right to control any resulting
proceedings and to determine whether and when to settle any such claim,
assessment or dispute to the extent such proceedings or determinations would
materially affect the amount of Taxes for which Seller is liable under this
Agreement. Whenever any Taxing Authority asserts a claim, makes an assess-
ment or otherwise disputes the amount of taxes for which Buyer is liable
under this Agreement, Seller shall promptly inform Buyer, and Buyer shall
have the right to control any resulting proceedings and to determine whether
and when to settle any such claim, assessment or dispute to the extent such
proceedings would materially affect the amount of Taxes for which Buyer is
liable under this Agreement.
(j) Resolution of Disagreements between Seller and Buyer.
If Seller and Buyer disagree as to the amount of Taxes for which each is
liable under this Agreement, Seller and Buyer shall promptly consult each
other in an effort to resolve such dispute. If any such point of
disagreement cannot be resolved within fifteen (15) days of the date of
consultation, Seller and Buyer shall within ten (10) days after such 15-day
period jointly engage an auditor (other than the Auditor or Deloitte &
Touche) (the Tax Auditor ) to act as an arbitrator to resolve all points of
disagreement concerning tax accounting matters with respect to this Agree-
ment. If the parties cannot agree on the selection of a Tax Auditor within
such 10-day period, then the matter shall be resolved pursuant to Section
9.3, except that the arbitrator shall be an attorney or certified public
accountant proficient in relevant Tax matters. All fees and expenses
relating to the work performed by any Tax Auditor or arbitrator in
accordance with this Section 5.5(j) shall be borne equally by Seller and
Buyer, unless otherwise ordered by the Tax Auditor or arbitrator.
(k) Certain Definitions. For purposes of this Agreement,
the following terms shall have the following meanings:
(i) Section 338 Forms shall mean all returns,
documents, statements, and other forms that are required to be
submitted to any federal, state, county, or other local Taxing Au-
thority in connection with a Section 338(g) Election or a Section
338(h)(10) Election. Section 338 Forms shall include, without
limitation, any statement of section 338 election and United
States Internal Revenue Service Form 8023 (together with any
schedules or attachments thereto) that are required pursuant to
Treas. Reg. Section 1.338-1T or Treas. Reg. Section 1.338(h)(10)-
1T.
(ii) Section 338 Elections means both a Section
338(g) Election and a Section 338(h)(10) Election.
(iii) Section 338(g) Election means an election
described in Section 338(g) of the Code or deemed election
described in Section 338(e) of the Code with respect to Buyer s
acquisition of the Company Common Stock pursuant to this Agree-
ment. Section 338(g) Election shall also include any substan-
tially similar elections under a state or local statute corre-
sponding to federal Laws.
(iv) Section 338(h)(10) Election means an
election described in Section 338(h)(10) of the Code with respect
to Seller s sale of the Company Common Stock to Buyer pursuant to
this Agreement. Section 338(h)(10) Election shall also include
any substantially similar election under a state or local statute
corresponding to federal Laws.
(v) Tax Laws means the Code and any other Laws
relating to Taxes and any official administrative pronouncements
released thereunder.
(l) Notwithstanding any other provision of this Section 5.5,
Buyer or the Company shall pay to Seller with respect to the net income
earned by the Company and the Company Subsidiaries for the period February
1, 1994 to the Closing Date, which income shall not include any amount that
may be recognized as a result of the transactions contemplated by this
Agreement, (x) Hypothetical Federal Income Tax and (y) Actual State Income
Tax. Hypothetical Federal Income Tax shall be paid at the time of final
settlement of the Adjusted Net Income (Loss) of the Company for the Interim
Period as specified in Section 1.3(e) hereof, and Actual State Income Tax
shall be paid within two (2) business days after Buyer and Seller reasonably
agree to the amount thereof. For purposes of this subsection (i)
"Hypothetical Federal Income Tax" shall mean federal income tax payable by
Seller and its subsidiaries on the taxable income of the Company and its
subsidiaries at an assumed 35% rate if the Company and Company Subsidiaries
are included in the consolidated federal income tax return for the applica-
ble period as the common parent of an affiliated group (as defined in
Section 1504 of the Code) and (ii) "Actual State Income Tax" shall mean the
actual state tax liability the Seller must pay on behalf of the Company and
the Company Subsidiaries to a Taxing Authority for the applicable period.
5.6 Acquisition Proposals to the Company. Seller shall not, and
Seller shall cause the Company and the Company s employees, agents, and
representatives (including, without limitation, any investment banker,
attorney or accountant retained by or on behalf of Seller or any of Seller s
Affiliates) not to, initiate, solicit or encourage, directly or indirectly,
any inquiry or the making of any proposal with respect to a merger,
consolidation, share exchange or similar transaction involving the Company
or any Company Subsidiary, any purchase of all or any significant portion of
the assets of the Company or any Company Subsidiary or the sale of the
Company Common Stock or any equity interest in the Company or any Company
Subsidiary (an Acquisition Proposal ), or engage in any negotiations
concerning, or provide any confidential information or data to, or have any
discussions with, any person relating to an Acquisition Proposal. Seller
shall promptly inform Buyer of all Acquisition Proposals received by the
Company, any Company Subsidiary, Seller or any representative of any such
party after the date hereof and provide a copy of any correspondence or
other documentation received in connection therewith. Seller, the Company,
each Company Subsidiary and each such company's employees, agents and repre-
sentatives have terminated and discontinued all prior discussions and
negotiations relating to all Acquisition Proposals other than as
contemplated by this Agreement.
5.7 Books, Records and Information. Seller agrees that except
in accordance with the Record Retention Policy, all documents that are
retained by Seller after the Closing Date and that are related to the Compa-
ny or any Company Subsidiary shall be open for inspection by representatives
of Buyer at any time during regular business hours until such time as docu-
ments are destroyed (after not less than thirty (30) business days prior
notice to Buyer during which period Buyer shall have the opportunity to take
possession of such records) or possession thereof is given to Buyer and that
Buyer may during such period at its expense make such copies thereof as it
may reasonably request. Buyer agrees that except in accordance with Buyer s
record retention practices, all documents that are retained by Buyer after
the Closing Date and that are related solely to the operations of the
Company or any Company Subsidiary prior to the Closing Date shall be open
for inspection by representatives of Seller at any time during regular
business hours until such time as such documents are destroyed (after not
less than thirty (30) business days prior notice to Seller during which
period Seller shall have the opportunity to take possession of such records)
or possession thereof is given to Seller and that Seller may during such
period at its expense make such copies thereof as it may reasonably request.
5.8 Supplements to Disclosure Schedule; Notice and Cure.
(a) From time to time prior to the Closing, Seller and Buyer
will promptly supplement or amend the sections of the Disclosure Schedule
relating to their respective representations and warranties in this
Agreement with respect to any matter, condition or occurrence hereafter
arising which, if existing or occurring at the date of this Agreement, would
have been required to be set forth or described in their respective sections
of the Disclosure Schedule or would otherwise have been inconsistent with
their representations set forth in this Agreement. No supplement or amend-
ment by either party shall be deemed to cure (or affect the rights of any
party with respect to) any breach of any representation or warranty made in
this Agreement or have any effect for the purpose of determining
satisfaction of the conditions set forth in Articles VI or VII hereof.
(b) Seller and Buyer shall inform the other in writing of,
and contemporaneously with such notice will provide to the other true and
complete copies of all information and documents relating to, any event,
transaction or circumstance occurring after the date hereof that causes or
is reasonably likely to cause any of its covenants or agreements under this
Agreement to be breached or that renders or is reasonably likely to render
untrue any of its representations or warranties contained in this Agreement.
Seller and Buyer shall use commercially reasonable efforts to cure, before
the Closing, (a) any such breach or misrepresentation by it and (b) any
violation or breach of any of its representations, warranties, covenants or
agreements in this Agreement, whether occurring or arising before or after
the date hereof.
5.9 Covenant to Satisfy Conditions. Seller and Buyer agree to
use all reasonable efforts to assure that the conditions to the other
party s obligations hereunder set forth in Article VI and Article VII hereof
are satisfied, insofar as such matters are within the control of such party.
5.10 Employee Benefits and Employment.
(a) Except as otherwise provided in paragraph (c) of this
Section 5.10, the Company and Company Subsidiaries shall cease to partici-
pate in the Plans as of the Closing Date, and the Company and Company
Subsidiaries shall have no liability thereunder subsequent to such date.
Seller shall be liable for all obligations to employees, former employees,
participants, and their respective dependents and beneficiaries arising
under said Plans, including any obligations for severance under any
severance plan, policy or Contract, on or before the Closing Date or which
arise due to the sale of the Company Common Stock pursuant to the terms
hereof. Buyer shall be obligated to pay severance to any Employee (as
defined below) whose employment with the Company is terminated by the
Company other than for cause during the six-month period immediately
following the Closing. In the event that severance benefits payable under
the Buyer Plans (as defined below) for such six-month period to any
Employees who are terminated subsequent to the Closing is less in amount
than the severance benefits such Employees would have been entitled to under
the Plans, then Buyer shall cause the Company to supplement the amounts
payable under Buyer Plans to the extent necessary such that the total
severance benefits paid to each such Employee for such period equals the
amount which such Employees would have received under the Plans. There
shall be no transfer of assets from any Plan to Buyer or any employee
benefit plan maintained by Buyer, and Buyer shall have no right, title or
interest in or liability under any Plan except as otherwise provided in
paragraph (c) of this Section 5.10.
(b) Each employee of the Company and the Company
Subsidiaries on the Closing Date (each, an Employee ) shall be eligible for
participation in the employee welfare benefit plans and the employee
pension benefit plans, as such terms are defined in sections 3(1) and 3(2)
of ERISA, maintained by Buyer and as in effect from time to time (the Buyer
Plans ). The Employees shall be subject to any eligibility conditions con-
tained in the Buyer Plans, except that with respect to life, health and
dental plans, Employees participating in Seller medical plans immediately
prior to the Closing Date and not subject to the preexisting condition
exclusions of such plans shall not be subject to the preexisting condition
exclusions of such Buyer Plans. Each Employee shall receive full credit for
past service to the Company and the Company Subsidiaries for the purposes of
satisfying any eligibility requirements and vesting requirements of the
Buyer Plans and for purposes of determining employer contributions under
Buyer's Retiree Medical Insurance Plan (but not for benefit accrual or
calculation purposes under any plans other than Buyer's Retiree Medical
Insurance Plan) to the extent such service is recognized for such purpose
under the comparable Plan. Buyer shall give each Employee credit towards
the deductible on Buyer s medical and dental plans to the extent such pay-
ments were made to a comparable Plan by such Employee during 1994 for
expenses incurred during 1994. Buyer shall have no liability or obligation
under any employment, consulting or severance arrangements established by
Seller. Seller shall give Employees credit for their post-Closing service
with the Company and Company Subsidiaries under Buyer's Pension Plan for
vesting, but not for accruing additional benefits, and Buyer shall provide
appropriate employment information to allow Seller to do so.
(c) Seller shall amend its Savings Plan to permit Employees
of the Company and the Company Subsidiaries who are participants in Seller's
Savings Plan, in their discretion, and in accordance with Treas. Reg.
1.411(d)-4Q&A3(b) and other applicable law, to receive a distribution of
their account balances in such plan or to make a direct transfer thereof to
Buyer's Savings Plan. Seller shall offer to lend to any such Employee who
elects to make a direct rollover to Buyer's Savings Plan and whose account
is subject to an outstanding loan as of the Closing Date an amount equal to
the balance of such outstanding loan for a period of ninety (90) days after
such transfer, and Buyer shall make loans available from its Savings Plan
within said period to enable the Employee to repay Seller. Any shares of
Seller stock included in an account balance rolled over to Buyer's Savings
Plan shall be held in a separate investment account thereunder and may,
within two (2) years of the Closing Date, be transferred to another
investment option within Buyer's Savings Plan. Buyer and Seller agree to
cooperate as reasonably necessary to effectuate the provisions of this
Section 5.10(c).
(d) Seller shall continue to carry Employees on its payroll
and provide them with health and dental benefits in accordance with their
existing elections until the end of the month in which the Closing occurs,
at which time they shall be transferred to Buyer's payroll and health and
dental plans. For the period beginning with the Closing and ending with the
end of the month in which the Closing occurs, Buyer shall hold Seller harm-
less and reimburse it for (i) all payroll expenses, including, without
limiting the generality of the foregoing, wages, payroll taxes and worker's
compensation premiums with respect to the employment of Employees after the
Closing, and (ii) all liabilities and obligations of Seller for health and
dental benefits and administration expenses payable under Seller's plans
relating to health and dental services provided to Employees and their
dependents after the Closing.
5.11 Company Name. (a) From and after the Closing, Buyer, the
Company and the Company Subsidiaries shall not conduct business under the
name Fleet Factors Corp. or any other name incorporating the word Fleet;
nor shall Buyer use in any manner the Fleet logos or service marks currently
used by the Company and the Company Subsidiaries; provided, however, that
Buyer, the Company and the Company Subsidiaries shall be permitted to use
any such name, logos and service marks (i) in connection with collection and
legal proceedings involving Credit Arrangements established on or prior to
the Closing Date, (ii) in announcements of the transaction distributed to
current or former customers of the Company or any Company Subsidiary or
otherwise, (iii) on any document or other materials used in the operation of
the businesses of the Company and the Company Subsidiaries, including,
without limitation, sales material, forms of agreements, invoices,
letterhead and business cards in existence on the Closing Date, until deple-
tion, but in no event after the first anniversary of the Closing Date.
Notwithstanding the foregoing, Buyer shall not at any time be obligated
hereunder to amend Credit Arrangement documents (including financing state-
ments or similar documents) to alter the Company s name or any name under
which the Company conducts or has conducted business or otherwise. From and
after the Closing, Buyer, the Company and each Company Subsidiary shall have
the unrestricted right to use the name Ambassador Factors and the names
set forth in Section 5.11 of the Disclosure Schedule.
(b) From and after the Closing, Seller shall not, and shall
not permit Seller s Affiliates to, conduct business under or otherwise use
the names Ambassador or Ambassador Factors or any other name incorporat-
ing such words.
(c) Prior to the Closing, Seller shall cause the Company to
change the Company s name to Ambassador Factors Corp.
5.12 Covenant Not to Compete. (a) To more effectively transfer
and protect the business and goodwill of the Company and the Company Subsid-
iaries, Seller agrees that, for a period beginning immediately after the
Closing Date and ending on the third anniversary thereof, neither Seller nor
any current or future Affiliate of Seller will, without Buyer's prior
written consent (i) directly or indirectly own, manage, operate, participate
in, perform marketing, servicing or sales services for or otherwise carry on
in a business providing the services currently provided by the Company or
any Company Subsidiary in any state in the United States or (ii) directly or
indirectly solicit any current employee of Buyer, the Company or any Company
Subsidiary to pursue employment opportunities other than with Buyer, the
Company or any Company Subsidiary. Notwithstanding the foregoing clause
(i), Seller shall not be prohibited from (i) acquiring any bank or bank
holding company owning a factoring affiliate providing not more than 25% of
such acquired bank or bank holding company s revenue on a consolidated basis
in the year preceding such acquisition, (ii) acquiring any Person which
generated less than 25% of such Person s revenue by factoring accounts
receivable in any of the three years preceding such acquisition,
(iii) participating in asset-based financing transactions in the ordinary
course of business, (iv) participating in accounts receivable financing
transactions in the ordinary course of business, or (v) participating in
occasional factoring transactions entered into in connection with the
ordinary course of Seller s business. Notwithstanding the foregoing,
neither Seller nor Seller's Affiliates shall engage in activities otherwise
permitted by this Section 5.12 with existing or prospective customers of the
Company or any Company Subsidiary, all of which are identified in Section
5.12 of the Disclosure Schedule, or with any Employee, except for
participations with those two customers specifically designated in Section
5.12 of the Disclosure Schedule at levels not to exceed participation levels
as of the date of this Agreement.
(b) If, at the time of enforcement of this Section 5.12, a
court shall hold that the duration, scope or area restrictions stated herein
are unreasonable under circumstances then existing, Buyer and Seller agree
that the maximum duration, scope or area permissible under such
circumstances shall be substituted for the stated duration, scope or area,
it being agreed by the parties that the covenant set forth in the first
clause (i) above constitutes a separate and independent covenant with
respect to each state of the United States.
(c) Seller acknowledges that Buyer has no adequate remedy at
law and would be irreparably harmed were Seller to breach or threaten to
breach the provisions of this Section 5.12, and therefore agrees that in
addition to any other legal or equitable remedy it may have, the Company
shall be entitled to injunctive relief to prevent any breach or threatened
breach of this Section 5.12.
5.13 Confidentiality. Each party hereto will hold and will
cause its officers, directors, employees, consultants, advisors and other
agents to hold in strict confidence, unless compelled to disclose by
judicial or administrative process or, in the opinion of its counsel, by
other requirements of Law (collectively, Legal Requirements ), all
confidential documents and information concerning the other party furnished
it by such other party or its representatives in connection with the trans-
actions contemplated by this Agreement (except to the extent that such
information (i) is or was previously known by the party to which it was fur-
nished, (ii) is or becomes in the public domain through no fault of such
party, or (iii) is later lawfully acquired from other sources by the party
to which it was furnished), and each party will not release or disclose such
information to any other person, except its auditors, attorneys, financial
advisors and other consultants and advisors in connection with this
Agreement (unless compelled to so disclose by Legal Requirements) and shall
not use such information other than in connection with this Agreement or the
transactions contemplated hereby until after the Closing Date. If the
transactions contemplated by this Agreement are not consummated, such
confidence shall be maintained to the extent required above, and such infor-
mation shall not be used to the detriment of, or in relation to any
investment in, the other party and all such documents (including copies
thereof) shall be returned to the other party immediately upon the written
request of such other party. Each party shall be deemed to have satisfied
its obligation to hold confidential information concerning or supplied by
the other party if it exercises the same care as it takes to preserve con-
fidentiality for its own similar information.
5.14 Employment Agreement. Seller shall have the opportunity
prior to Closing to review the employment agreement required by Section 7.9
hereof (the Employment Agreement ).
5.15 Certain Other Obligations. Seller hereby agrees to perform
each obligation of Seller set forth in that certain letter agreement dated
November 29, 1993 by and among GFC, Seller, the Company and Mr. Howard
Rubin.
5.16 Intercompany Obligations After the Audit Date. All inter-
company liabilities other than intercompany debt as referred to in Section
6.6 hereof (including accrued management expenses, tax obligations and
accrued bonuses) outstanding as of the Closing Date with respect to the
Interim Period and owed by the Company or any Company Subsidiary to Seller
or any Seller Affiliate (other than the Company or any Company Subsidiary)
shall be paid to Seller at the time of the payment of the Adjusted Net
Income (Loss) of the Company for the Interim Period. An Auditor's Review
Certification shall be delivered with respect to the determination of such
amount.
5.17 Certain Appeal Bonds. GFC hereby agrees that promptly
after the Closing Date it will cause itself or the Company to be substituted
for, or will replace, Seller with respect to those three (3) appeal bonds
set forth in Section 3.12(a) of the Disclosure Schedule. Notwithstanding
anything to the contrary contained in this Agreement, all costs and expenses
and other Claims arising in connection with the provisions of the
immediately preceding sentence shall be applied against the $350,000 annual
threshold described in Section 1.4(v) hereof.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of Seller to consummate the transactions contem-
plated by this Agreement are subject, in the discretion of Seller, to the
fulfillment, at or prior to the Closing, of each of the following condi-
tions, unless waived in writing by Seller.
6.1 Representations and Warranties. The representations and
warranties made by Buyer in this Agreement shall be true and correct in all
material respects as of the date hereof and on and as of the Closing Date
with the same force and effect as though such representations and warranties
had been made on and as of the Closing Date.
6.2 Performance. Buyer shall have performed in all material
respects all of its obligations under this Agreement to be so performed by
Buyer on or prior to the Closing Date.
6.3 Corporate Documents. Seller shall have received from Buyer
resolutions adopted by the Board of Directors of Buyer approving this
Agreement and the transactions contemplated hereby, certified by Buyer s
corporate secretary or assistant secretary.
6.4 Officer s Certificate. Buyer shall have delivered to Seller
a certificate, dated the Closing Date and executed by an appropriate officer
of Buyer, certifying to the fulfillment of the conditions specified in Sec-
tions 6.1 and 6.2 hereof.
6.5 Injunctions. On the Closing Date, there shall be no injunc-
tion, writ, preliminary restraining order or other order in effect of any
nature issued by a court or governmental agency of competent jurisdiction
directing that the transactions provided for herein not be consummated, and
no proceeding seeking such action shall be pending or threatened.
6.6 Intercompany Obligations. Intercompany debt and accrued and
unpaid interest thereon outstanding as of the Closing Date and owed by the
Company or any Company Subsidiary to Seller or any Seller Affiliate (other
than the Company or any Company Subsidiary) (currently estimated to be ap-
proximately $180,000,000) shall have been refinanced by Buyer or a Buyer
Affiliate at the par value thereof plus accrued and unpaid interest.
6.7 Opinion of Counsel. Seller shall have received the opinions
of counsel for Buyer substantially in the forms attached hereto as Annex C.
6.8 Governmental Filings and Consents; Third-Party Consents.
All consents, approvals and waivers from governmental authorities or
agencies or other Persons necessary to permit Buyer and Seller to consummate
the transactions contemplated hereby shall have been obtained.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer to consummate the transactions contem-
plated by this Agreement are subject, in the discretion of Buyer, to the
fulfillment, at or prior to the Closing, of each of the following condi-
tions, unless waived in writing by Buyer.
7.1 Representations and Warranties. The representations and
warranties made by Seller in this Agreement shall be true and correct in all
material respects as of the date hereof and on and as of the Closing Date
with the same force and effect as though such representations and warranties
had been made on and as of the Closing Date.
7.2 Performance. Seller shall have performed in all material
respects all of its obligations under this Agreement to be so performed by
Seller on or prior to the Closing Date.
7.3 Corporate Documents. Buyer shall have received from Seller
resolutions adopted by the Board of Directors of Seller approving this
Agreement and the transactions contemplated hereby, certified by Seller s
corporate secretary or assistant secretary.
7.4 Officer s Certificate. Seller shall have delivered to Buyer
a certificate, dated the Closing Date and executed by Seller, certifying to
the fulfillment of the conditions specified in Sections 7.1 and 7.2 hereof.
7.5 Injunctions. On the Closing Date, there shall be no injunc-
tion, writ, preliminary restraining order or other order in effect of any
nature issued by a court or governmental agency of competent jurisdiction
directing that the transactions provided for herein not be consummated as
provided herein, and no proceeding seeking such action shall be pending or
threatened.
7.6 Termination of Tax Sharing Agreements. Buyer shall have
received instruments in form and substance satisfactory to Buyer,
terminating each Tax sharing Contract to which the Company or any Company
Subsidiary is a party.
7.7 Governmental Filings and Consents; Third-Party Consents.
All consents, approvals and waivers from governmental authorities or
agencies or, except with respect to that certain matter referred to in the
first item of Section 3.15 of the Disclosure Schedule, other Persons neces-
sary to permit Buyer and Seller to consummate the transactions contemplated
hereby shall have been obtained.
7.8 Opinion of Counsel. Buyer shall have received the opinions
of counsel for Seller substantially in the forms attached hereto as Annex D.
7.9 Employment Agreement. Buyer shall have received the Employ-
ment Agreement described in that certain letter agreement dated November 29,
1993 among Buyer, Seller, the Company and Mr. Howard Rubin, in form and sub-
stance satisfactory to Buyer and duly executed by Mr. Howard Rubin.
7.10 Resignations. Seller shall have delivered all required
resignations of officers and directors of the Company and each Company
Subsidiary as required by Section 2.2(a)(iv).
7.11 Assumption and Indemnification Agreement. Seller shall
have delivered to Buyer the Assumption and Indemnification Agreement in the
form of Annex B.
7.12 Environmental Assessments. Buyer shall have completed
Phase I environmental assessments of the property owned or leased by the
Company or any Company Subsidiaries, as well as the Participation Facilities
and non-Performing Loan Properties, in each case selected by Buyer with
results not inconsistent with Seller s representation set forth in Section
3.16 hereof.
7.13 Absence of Certain Changes. Subject to Section 8.1(f)
hereof, since the date hereof, there shall not have occurred and no facts or
circumstances shall have arisen or been discovered which would or could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company and the Company Subsidiaries taken as a whole.
7.14 Intercompany Obligations. All intercompany liabilities
other than intercompany debt as referred to in Section 6.6 hereof (including
accrued management expenses, tax obligations and accrued bonuses) outstand-
ing as of the Audit Date and owed by the Company or any Company Subsidiary
to Seller or any Seller Affiliate (other than the Company or any Company
Subsidiary) shall have been paid by the Company. Notwithstanding anything
to the contrary contained in this Agreement, including Section 1.4 hereof,
all intercompany liabilities which the Company is required to have paid or
caused to have been paid pursuant to this Section 7.14 shall, to the extent
not so paid, be deemed waived, discharged and forgiven prior to Closing, and
from and after the Closing, neither the Company nor any Company Subsidiary
shall have any obligation with respect thereto.
ARTICLE VIII
TERMINATION
8.1 Termination. This Agreement may be terminated and abandoned
at any time prior to Closing:
(a) by the mutual written consent of Seller and Buyer;
(b) by either Seller or Buyer in the event the Closing has
not occurred by April 1, 1994 (the Cut-Off Date ), unless the failure of
such consummation shall be due to the failure of the party seeking to
terminate this Agreement to fulfill any obligation under this Agreement;
provided, however, that in the event the Closing does not occur in
accordance with the last sentence of Section 1.3(e) hereof, the Cut-Off Date
shall be extended in order to finalize the Closing Audit Report (including
determination of the Shareholders Equity and Adjusted Net Income (Loss) of
the Company) as provided in the other provisions of Section 1.3(e) hereof,
but in no event shall the Cut-Off Date be extended beyond June 30, 1994;
(c) by Buyer or Seller in the event that the (x) Sharehold-
er s Equity of the Company as set forth in the Closing Audit Report differs
from the Shareholder s Equity of the Company as determined from the Company
Financial Statements as of November 30, 1993 by ten percent (10%) or more,
or (y) Adjusted Net Income (Loss) of the Company as set forth in the Closing
Audit Report differs from the Adjusted Net Income (Loss) of the Company as
determined from the Company Financial Statements for 1993 by twenty percent
(20%) or more;
(d) by either Seller or Buyer in the event any court of
competent jurisdiction or other federal, state or local governmental body
shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the transactions
contemplated hereby and such order, decree or ruling or other action shall
have become final and nonappealable after the affected party or parties have
made all reasonable efforts to contest and appeal the issuance of such
order, decree, ruling or other action;
(e) by Buyer or Seller if (i) the other party shall have
failed to comply in any material respect with any of the covenants or
agreements contained in this Agreement to be complied with by such other
party at or prior to such date of termination within five business days
following receipt by non-complying party of written notice of such failure
to comply or (ii) any representation or warranty of the other party shall
not be true in all material respects when made (provided such breach has not
be cured within five business days following receipt by the breaching party
of written notice of the breach) or on and as of the Closing Date, as if
made on and as of the Closing Date.
Notwithstanding the foregoing, but subject to Section 8.1(c), Buyer shall
have no right to terminate this Agreement based upon any increase in the
amount of non-performing loans held by the Company so long as the Company is
in compliance with Section 5.1(i) and (j).
8.2 Effect of Termination. In the event of any termination and
abandonment of this Agreement pursuant to this Article VIII, the terminating
party shall promptly give notice thereof to the other party and this Agree-
ment shall forthwith become void and have no effect and neither party to
this Agreement will have any liability to the other hereunder, except with
respect to any breach of any provisions of this Agreement.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification. (a) Seller agrees to indemnify, defend
and hold Buyer and Buyer s Affiliates including, after the Closing Date, the
Company and each Company Subsidiary and their respective directors,
officers, employees, agents, counsel and other representatives (each, a
Buyer Indemnified Party ), harmless from and against and in respect of:
(i) any and all losses, liabilities, Taxes, damages, deficiencies, demands,
claims, costs and expenses (including interest, penalties, fees and reason-
able attorneys and experts' fees and expenses incurred in connection with
any of the foregoing and in seeking indemnification hereunder) (collec-
tively, Claims ) that they may suffer, sustain, incur or become subject to,
arising out of, in connection with or due to any inaccuracy of any
representation or the breach of any warranty of Seller contained in this
Agreement (including the Disclosure Schedule), in each case without regard
to any materiality, or Material Adverse Effect or similar limitations,
thresholds or exceptions contained in such representations and warranties
and without regard to whether any such action giving rise to a Claim is
initiated prior to or after the Closing, provided, that Seller shall not be
required to indemnify a Buyer Indemnified Party for Claims under this clause
(i) unless and until the aggregate value of such Claims exceeds $250,000;
(ii) all Claims with respect to the breach of any covenant, undertaking or
other agreement of Seller contained in this Agreement; (iii) all Claims
relating to Retained Liabilities, even in the event that such obligations
and liabilities are or may be covered by representations or warranties; (iv)
all customer credit balances classified or treated as income prior to the
Closing; provided, however, that Seller shall not be liable for indemnifica-
tion pursuant to this Section 9.1(a)(iv) with respect to claims for refunds
brought by customers of the Company for customer credit balances to the
extent of the amount of customer credit balances existing at and as of the
Closing; and (v) all Claims with respect to the failure to obtain or make
any consent, approval, authorization, notice, declaration, filing or
registration set forth in Section 3.15 of the Disclosure Schedule. Notwith-
standing anything to the contrary contained in clause (i) of this Section
9.1, Seller shall not be required to indemnify a Buyer Indemnified Party for
any misstatement of any line item in the financial statements contained in
the Closing Audit Report if such misstatement related to the overstatement
of an asset line item by no more than $500,000 or if such misstatement
related to the understatement of a liability line item by no more than
$500,000, unless in either case any Attributable Person had knowledge before
Closing of such overstatement or understatement.
(b) Buyer agrees to indemnify, defend and hold Seller,
Seller s Affiliates and their respective directors, officers, employees,
agents, counsel and other representatives (each, a Seller Indemnified
Party ), harmless from and against and in respect of: (i) any and all
Claims that they may suffer, sustain, incur or become subject to arising out
of, in connection with or due to any inaccuracy of any representation or the
breach of any warranty of Buyer contained in this Agreement, in each case
without regard to any materiality, Material Adverse Effect or similar
limitations, thresholds or exceptions contained in such representations and
warranties and without regard to whether any such action giving rise to a
Claim is initiated prior to or after the Closing; provided, that Buyer shall
not be required to indemnify a Seller Indemnified Party under this clause
(i) unless and until the aggregate value of such Claims exceeds $250,000;
and (ii) all Claims with respect to the breach of any covenant, undertaking
or other agreement of Buyer contained in this Agreement.
(c) With respect to breaches of representations and warran-
ties only, the indemnification provided pursuant to Section 9.1(a) (i) and
Section 9.1(b) shall in each case be limited to the Purchase Price as
adjusted pursuant to Section 1.3(f) hereof (the Indemnity Limit ).
Neither Seller nor Buyer shall be liable for breaches of representations and
warranties for amounts in excess of the Indemnity Limit.
(d) Except as provided in Section 9.1(e), if there occurs an
event which a party asserts is an indemnifiable event pursuant to Section
9.1(a) or 9.1(b), the Buyer Indemnified Party or, as the case may be, the
Seller Indemnified Party (each an Indemnified Party ) shall notify the
other party obligated to provide indemnification (the Indemnifying Party )
promptly; provided, that the failure to give prompt notice shall not relieve
the Indemnifying Party of its obligations hereunder except to the extent
that such failure actually prejudices the Indemnifying Party hereunder. If
such event involves the commencement of any action or proceeding by a third
person, the Indemnified Party will give such Indemnifying Party prompt
written notice of the commencement of such action or proceeding; provided,
however, that the failure to provide prompt notice as provided herein will
not relieve the Indemnifying Party of its obligations hereunder except to
the extent that such failure actually prejudices the Indemnifying Party
hereunder. In case any such action shall be brought against any Indemnified
Party and it shall notify the Indemnifying Party of the commencement
thereof, the Indemnifying Party shall be entitled to participate therein
and, to the extent that it shall elect to do so in writing within 10 days
after such notice, to assume the defense thereof, at its sole cost and
expense, with counsel reasonably satisfactory to the Indemnified Party
(provided that the Indemnifying Party first agrees in writing to pay the
full amount of indemnification with respect to such action to the
Indemnified Party, and further provided that Seller shall not be entitled to
assume the defense of any action brought against any Indemnified Party
identified in Section 9.1(a) by any federal, state, local or foreign govern-
mental agency or authority). After notice from the Indemnifying Party to
the Indemnified Party of such election so to assume the defense thereof, the
Indemnified Party shall have the right to retain its own separate counsel,
but the fees and expenses of such counsel shall be at the Indemnified
Party s expense unless (a) the Indemnifying Party and the Indemnified Party
shall have agreed to the contrary, (b) the Indemnifying Party has failed
within a reasonable time to retain counsel reasonably satisfactory to the
Indemnified Party, or (c) the named party in any such proceeding (including
any impleaded parties) include both the Indemnified Party and the
Indemnifying Party and representation of both parties by the same counsel
could be inappropriate due to actual or potential differing interests
between them. In any matter described above where the Indemnified Party has
obtained counsel to represent it in addition to counsel obtained by the
Indemnifying Party, counsel selected by the Indemnifying Party shall be
required to cooperate fully with counsel selected by the Indemnified Party
in such matter. So long as the Indemnifying Party is defending in good
faith any claim for which indemnification is sought, the Indemnifying Party
shall not be liable for any claim settled without its consent, which consent
may not be unreasonable withheld.
(e) (i) In the event of a Claim by a third Person relating
to Loan Portfolio Matters, which Claim could reasonably be likely to relate
to pre-Closing periods, the Buyer Indemnified Party shall give Seller prompt
written notice of such Claim (whether such Claim involves the commencement
of an action or proceeding, a counterclaim or otherwise); provided, however,
that the failure to provide prompt notice as provided herein will not
relieve Seller of its obligations hereunder except to the extent that such
failure actually prejudices Seller hereunder. Notwithstanding the
provisions of Section 9.1(d) hereof, the Buyer Indemnified Party shall be
entitled to conduct the defense of any such Claim with counsel reasonably
satisfactory to Seller. The defense of any such Claim shall be at the sole
cost and expense of Seller, subject to the provisions of Section 1.4(v)
hereof. Seller shall have the right to participate in the defense of any
such Claim and to retain its own separate counsel with respect thereto (and
to assume the defense of any such Claim in the event that the Buyer
Indemnified Party has failed within a reasonable time to retain counsel
reasonably satisfactory to Seller), but the fees and expenses of such
counsel shall be borne by the Indemnifying Party, subject to the provisions
of Section 1.4 hereof. In any matter described above where Seller has
obtained counsel to represent it in addition to counsel obtained by the
Buyer Indemnified Party, counsel selected by the Buyer Indemnified Party
shall be required to cooperate fully with counsel selected by Seller.
(ii) Subject to Section 1.4(vi) hereof, in the event of
an adverse judgment or settlement on the part of a Buyer Indemnified Party
with respect to Claims referred to in the first sentence of Section 9.1(e)
hereof, the Buyer Indemnified Party and Seller promptly shall negotiate in
good faith their respective shares of the cost and expense of such resulting
liability or settlement based on the extent to which the liability or
settlement relates to a Retained Liability(ies). No such settlement shall
be effected by any party without the prior written consent of the other
party, which consent will not be unreasonably withheld. Seller shall not be
entitled to assert inadequate representation as a defense to the sharing of
any such liability or settlement, and neither party shall be entitled to
call into question the validity of any finding by the relevant court,
arbitrator or other forum of competent jurisdiction as a defense to the
sharing of any such liability. In the event the parties do not agree how to
share the costs and expenses of any such liability or settlement within
sixty (60) days thereof, then the parties shall promptly, but in no event
later than thirty (30) business days after the end of such sixty (60) day
period, submit such matter for determination by a court of competent
jurisdiction. The parties hereby irrevocably submit to the exclusive
jurisdiction and venue of the state and federal courts located in New York,
New York. THE PARTIES EXPRESSLY WAIVE THEIR RIGHTS TO A TRIAL BY JURY.
9.2 Survival of Representations and Warranties. The repre-
sentations and warranties of Seller and Buyer contained in this Agreement or
in any instrument delivered pursuant hereto shall survive the Closing Date
and shall remain in full force and effect thereafter until two years after
the Closing Date; provided, however, that the representations and warranties
contained in Section 3.3, the third sentence of Section 3.4, and Section
3.16 shall survive indefinitely without limitation and the representations
and warranties contained in Sections 3.11 and 3.17 shall survive until the
applicable statutes of limitations have run. No action or proceeding may be
brought with respect to any Claims based on the breach of a representation
or warranty unless written notice thereof, setting forth in reasonable
detail each such Claim, shall have been delivered to the Seller or Buyer, as
the case may be, prior to the expiration of the applicable periods set forth
above.
9.3 Arbitration.
(a) All controversies or Claims arising among
the parties, including without limitation claims arising out of or relating
to this Agreement, the subject matter hereof, any other Contract among such
Persons, and the arbitrability of any Claim, but excluding those matters
that are governed by Sections 5.5(j) and 9.1(e) hereof, shall be settled by
arbitration as provided below. The arbitration and all preliminary proceed-
ings related thereto shall be conducted in accordance with such rules as may
be agreed upon by the parties, or, failing agreement on such rules, in
accordance with the Rules for Commercial Arbitration of the American
Arbitration Association ( AAA ), as amended from time to time and as
modified by this Agreement. The dispute shall be presented to a single
arbitrator sitting in New York City.
(b) The arbitrator shall be selected jointly by the parties
within fifteen (15) days after demand for arbitration is made by a party.
If the parties are unable to agree on an arbitrator within that period, then
any party may request that the AAA select the arbitrator. The arbitrator
shall possess substantive legal experience in the principal issues in
dispute.
(c) Any discovery permitted shall be limited to information
directly relevant to the controversy or Claim in arbitration. In the event
of discovery disputes, the arbitrator is directed to issue such orders as
are appropriate to limit discovery in accordance with the foregoing and as
are reasonable in light of the issues in dispute, the amount in controversy,
and other relevant considerations. To the extent the parties are unable to
agree on the scope of discovery, the arbitrator shall require the party
seeking discovery on an issue to present the legal and factual basis for the
Claim and shall permit the party opposing discovery to respond. The
arbitrator shall permit discovery on an issue only if the arbitrator
concludes that there is a reasonable and good faith basis in Law and in fact
for bringing such allegations and that the discovery appears likely to
present substantive evidence regarding that Claim. The arbitrator may
permit limited discovery to permit investigation of some of the Claims or to
determine whether a Claim has sufficient basis in law or in fact to warrant
further discovery, but shall issue appropriate orders to restrict the scope
of such discovery. The federal or state rules or procedure and evidence
shall not apply to the arbitration proceedings, including without limitation
the rules of discovery. The arbitrator shall consider claims of privilege,
work product and other restrictions on discovery as appear to be warranted.
(d) The arbitrator shall award the prevailing party its
attorneys and experts fees and disbursements incurred in resolving the
dispute and shall award double costs and expenses or other sanctions to the
extent the arbitrator finds any Claim advanced in the proceedings to be
frivolous or without a good faith basis in fact and in law when such Claim
was first presented for arbitration.
(e) Except as may otherwise be agreed in writing by the
parties or as ordered by the arbitrator upon substantial justification
shown, the hearing for the dispute shall be held within ninety (90) days of
submission of the dispute to arbitration. The arbitrator shall render its
final award within thirty (30) days following conclusion of the hearing and
any required post-hearing briefing or other proceedings ordered by the
arbitrator. The arbitrator shall state the factual and legal basis for the
award. The decision of the arbitrator shall be final and binding, except as
provided in the Federal Arbitration Act, 9 U.S.C. Section 1, et seq., and
except for errors of law based on the findings of fact. Final judgment
may be entered upon such an award in any court of competent jurisdiction,
but entry of such judgment shall not be required to make such award
effective. The parties hereby irrevocably submit to the exclusive
jurisdiction and venue of the state and federal courts located in New York,
New York. THE PARTIES EXPRESSLY WAIVE THEIR RIGHTS TO A TRIAL BY JURY.
ARTICLE X
MISCELLANEOUS
10.1 Fees and Expenses. Each of the parties shall bear its own
expenses in connection with the negotiation and consummation of the transac-
tions contemplated by this Agreement except as expressly provided by any
other provision of this Agreement.
10.2 Governing Law. This Agreement shall be construed under and
governed by the laws of the State of New York without giving effect to the
conflicts of laws provisions thereof.
10.3 Amendment. This Agreement may not be amended, modified or
supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
10.4 No Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by either party
hereto without the prior written consent of the other party; provided,
however, that Buyer shall be entitled to assign any of its rights, interests
or obligations hereunder to any of its Affiliates (provided that in the
event of any such assignment Buyer shall remain liable for all obligations
of Buyer set forth herein).
10.5 Waiver. Any of the terms or conditions of this Agreement
which may be lawfully waived may be waived in writing at any time by the
party which is entitled to the benefits thereof. Any waiver of any of the
provisions of this Agreement by any party hereto shall be binding only if
set forth in an instrument in writing signed on behalf of such party. No
failure to enforce any provision of this Agreement shall be deemed to or
shall constitute a waiver of such provision and no waiver of any of the
provisions of this Agreement shall be deemed to or shall constitute a waiver
of any other provision hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.
10.6 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given by delivery,
by telecopier or by mail (registered or certified by mail, postage prepaid,
return receipt requested) to the respective parties as follows:
(a) If to Buyer or GFC by telecopier or mail:
Greyhound Financial Corporation
Dial Tower
Dial Corporate Center
Phoenix, Arizona 85077-1159
Attention: William J. Hallinan
Telecopy: (602) 207-4099
If to Buyer or GFC by hand:
Greyhound Financial Corporation
1850 N. Central Avenue, Suite 1159
Phoenix, Arizona 85077-1159
Attention: William J. Hallinan
Telecopy: (602) 207-4099
with a copy to:
Skadden, Arps, Slate, Meagher & Flom
333 West Wacker Drive
Chicago, Illinois 60606
Attention: Gary P. Cullen
Telecopy: (312) 407-0411
(b) If to Seller:
Fleet Financial Group, Inc.
50 Kennedy Plaza
Providence, RI 02903
Attention: Terrence P. Laughlin
Telecopy: (401) 278-5801
with a copy to:
Edwards & Angell
2800 Hospital Trust Tower
Providence, RI 02903
Attention: V. Duncan Johnson
Telecopy: (401) 276-6611
or to such other address as any party hereto may, from time to time,
designate in a written notice given in like manner.
10.7 Complete Agreement. This Agreement and the other documents
and writings referred to herein or delivered pursuant hereto contain the
entire understanding of the parties with respect to the subject matter
hereof. There are no restrictions, agreements, promises, warranties,
covenants or undertakings other than those expressly set forth in such docu-
ments with respect to the subject matter hereof. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
10.8 Publicity. No publication, press release or public
announcement of any nature shall be issued pertaining to this Agreement or
the transactions contemplated hereby without the prior consent of the other
party hereto (which shall not be unreasonably withheld) or except as
required by applicable Law or by obligations pursuant to any listing
agreement with any securities exchange or any securities exchange
regulation, in which case the party proposing to issue such publication or
press release or make such announcement shall use reasonable efforts to
consult with the other party before issuing any such publication or press
release.
10.9 Headings. The headings contained in this Agreement are for
reference only and shall not affect in any way the meaning or interpretation
of this Agreement.
10.10 Severability. Any provision of this Agreement which is
invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity, illegality,
or unenforceability, without affecting in any way the remaining provisions
hereof in such jurisdiction or rendering that or any other provision of this
Agreement invalid, illegal or unenforceable in any other jurisdiction.
10.11 No Third Party Beneficiaries. Except for Section 9.1,
which is intended to benefit and to be enforceable by any party referred to
therein as entitled to indemnification thereunder, nothing in this
Agreement, expressed or implied, is intended to confer on any person other
than the parties hereto or their respective successors and permitted
assigns, any rights, remedies, obligations or liabilities under or by reason
of this Agreement. This Agreement shall inure to the benefit of and be
enforceable against each the successors and assigns of each party hereto.
10.12 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same
agreement and each of which shall be deemed an original.
IN WITNESS WHEREOF, Buyer and Seller have caused this Agreement to
be executed by their duly authorized officers as of the day and year first
above written.
GFC FINANCIAL CORPORATION
By
-------------------------------------
Name:
Title:
GREYHOUND FINANCIAL
CORPORATION
By
-------------------------------------
Name:
Title:
FLEET FINANCIAL GROUP, INC.
By
-------------------------------------
Name:
Title:
<PAGE>
ANNEX A
DEFINITIONS
Defined Terms. As used in this Agreement, the terms below shall
have the following meanings, except as otherwise expressly provided or
unless the context otherwise requires.
Company Subsidiary means (a) any corporation of which an
aggregate of more than 50% of the outstanding capital stock having ordinary
voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the time, capital stock of any
other class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time,
directly or indirectly, owned legally or beneficially by the Company and/or
one or more Company Subsidiaries, (b) any partnership in which the Company
and/or one or more Company Subsidiaries shall have an interest (whether in
the form of voting or participation in profits or capital contribution) of
more than 50% and (c) any other corporation or entity a majority of whose
shares, interests, participation, equity securities or other equivalents
however designated having ordinary voting power to elect a majority of the
board of directors (or comparable governing body) of such entity is at the
time, directly or indirectly, owned legally or beneficially by the Company
and/or one or more Company Subsidiaries.
due inquiry includes, among other things, making inquiry of the
appropriate Persons having access to relevant facts and documents and review
of the appropriate files, books and records of the Company, Company
Subsidiaries and any Participation Facility, as applicable.
Encumbrances means any lien, option, transfer or other restric-
tion, claim, charge, easement, mortgage, pledge, security interest, lease,
right-of-way, voting trust or other voting agreement, call or other encum-
brance, or any conditional sale agreement, title retention agreement or
other agreement to give or to refrain from giving any of the foregoing.
Other Defined Terms. As used in this Agreement, the terms below
have the meanings defined for such terms in the Sections set forth below:
Terms Section
Acquisition Proposal 5.6
Actual State Income Tax 5.3
Adjusted Net Income (Loss) 1.3
Affiliate 2.2
Agreement Preamble
Allocation Agreement 5.7
Assumption and Indemnification
Agreement 1.4
Attributable Person 3.9
Audit Date 1.3
Auditor 1.3
Auditor s Review Certification 1.3
Buyer Preamble
Buyer Benefits 5.7
Buyer Plans 5.10
Buyer s Appraisal 5.7
Charges 5.7
Claims 9.1
Closing 2.1
Closing Audit 1.3
Closing Audit Financial Statements 3.7
Closing Audit Report 1.3
Closing Date 2.1
Closing Period 5.7
Code 3.11
Company Preamble
Company Common Stock Preamble
Company Financial Statement 3.7
Contract 3.6
Credit Arrangement 3.12
Cut-Off Date 8.1
Due Date 5.7
Employee 5.10
Employment Agreement 5.14
Environmental Claim 3.16
Environmental Laws 3.16
ERISA 3.17
ERISA Affiliate 3.17
ERISA Plans 3.17
Exchange Act 2.2
First Interim Period 1.2
Flamb 3.4
GAAP 1.3
GFC Preamble
HSR Act 3.15
Hypothetical Federal Income Tax 5.3
Indemnified Party 9.1
Indemnifying Party 9.1
Indemnity Limited 9.1
Intellectual Property 3.10
Interim Company Financial Statements 3.7
IRS 3.11
Laws 3.6
Legal Requirements 5.14
Loan Property 3.16
Material Adverse Effect 3.1
Materials of Environmental Concern 3.16
Participation Facility 3.16
Permits 3.6
Person 3.11
Plans 3.17
PBGC 3.17
Pre-Closing Period 5.5
Preliminary Objection Notice 1.3
Purchase Price 1.2
Record Retention Policy 5.3
Retained Liabilities 1.4
Second Interim Period 1.3
Section 338 Elections 5.5
Section 338 Forms 5.5
Section 338(g) Elections 5.5
Section 338(h)(10) Elections 5.5
Securities Act 4.4
Seller Preamble
Shareholder s Equity 1.3
SPD 3.17
Tax Auditor 5.5
Tax Laws 5.7
Tax, Taxable, Taxes 3.11
Taxing Authority 5.7
Tax Returns 3.11
WARN 3.18
GREYHOUND FINANCIAL CORPORATION
FIFTH AMENDMENT AND RESTATEMENT
Dated as of May 18, 1993
of
CREDIT AGREEMENT
Dated as of May 31, 1976
Bank of America National Trust and Savings Association,
Chemical Bank and Citibank, N.A., as Agents
Citibank, N.A., as Administrative Agent
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I Definitions . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . 1
ARTICLE II Amount and Terms of the Credit . . . . . . . . . . 8
SECTION 2.01. The Advances . . . . . . . . . . . . . . . . . 8
SECTION 2.02. The Advance Accounts . . . . . . . . . . . . . 9
SECTION 2.03. Prepayments of Debit Balances . . . . . . . . 9
SECTION 2.04. Making the Advances . . . . . . . . . . . . . 10
SECTION 2.05. Interest . . . . . . . . . . . . . . . . . . . 12
SECTION 2.06. Additional Interest on Eurodollar
Advances . . . . . . . . . . . . . . . . . . . 13
SECTION 2.07. Interest Rate Determination . . . . . . . . . 13
SECTION 2.08. Repayment . . . . . . . . . . . . . . . . . . 14
SECTION 2.09. Increased Costs . . . . . . . . . . . . . . . 14
SECTION 2.10. Facility Fee . . . . . . . . . . . . . . . . . 14
SECTION 2.11. Reduction of the Commitments . . . . . . . . . 15
SECTION 2.12. Payments and Computations . . . . . . . . . . 15
SECTION 2.13. Compensation . . . . . . . . . . . . . . . . . 16
SECTION 2.14. Taxes . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.15. Sharing of Payments, Etc . . . . . . . . . . . 17
SECTION 2.16. Status of Prior Agreement . . . . . . . . . . 17
SECTION 2.17. Extension of Commitments . . . . . . . . . . . 18
ARTICLE III Representations and Warranties . . . . . . . . . . 18
SECTION 3.01. Representations and Warranties of the
Company . . . . . . . . . . . . . . . . . . . 18
ARTICLE IV Covenants . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.01. Affirmative Covenants . . . . . . . . . . . . 20
SECTION 4.02. Negative Covenants . . . . . . . . . . . . . . 22
ARTICLE V Conditions of Lending . . . . . . . . . . . . . . . . . 26
SECTION 5.01. Conditions Precedent to Effectiveness . . . . 26
SECTION 5.02. Conditions Precedent to Each Advance . . . . . 26
SECTION 5.03. Conditions Precedent to Certain
Borrowings . . . . . . . . . . . . . . . . . . 27
ARTICLE VI Events of Default . . . . . . . . . . . . . . . . . 27
SECTION 6.01. Events of Default . . . . . . . . . . . . . . 27
ARTICLE VII The Administrative Agent, Agents and Co-Agents . . 29
SECTION 7.01. Authorization and Action . . . . . . . . . . . 29
SECTION 7.02. Agents' Reliance, Etc . . . . . . . . . . . . 29
SECTION 7.03. Citibank, BofA , Chemical, any Co-Agent
and Their Affiliates . . . . . . . . . . . . . 30
SECTION 7.04. Lender Credit Decision . . . . . . . . . . . . 30
SECTION 7.05. Indemnification . . . . . . . . . . . . . . . 30
SECTION 7.06. Successor Agent . . . . . . . . . . . . . . . 30
ARTICLE VIII Miscellaneous . . . . . . . . . . . . . . . . . . . . . 31
SECTION 8.01. No Waiver; Amendments . . . . . . . . . . . . 31
SECTION 8.02. New Lenders . . . . . . . . . . . . . . . . . 31
SECTION 8.03. Notices, Etc . . . . . . . . . . . . . . . . . 31
SECTION 8.04 Assignments, Participations, Etc. . . . . . . 32
SECTION 8.05. Costs, Expenses and Taxes . . . . . . . . . . 34
SECTION 8.06. Right of Set-off . . . . . . . . . . . . . . . 34
SECTION 8.07. Accounting Terms . . . . . . . . . . . . . . . 34
SECTION 8.08. Effectiveness of Action by, or Consent
of,
Lenders . . . . . . . . . . . . . . . . . . . 35
SECTION 8.09. Several Obligations . . . . . . . . . . . . . 35
SECTION 8.10. Binding Effect . . . . . . . . . . . . . . . . 35
SECTION 8.11 Severability of Provisions . . . . . . . . . . 35
SECTION 8.12 Descriptive Headings . . . . . . . . . . . . . 35
SECTION 8.13. Governing Law . . . . . . . . . . . . . . . . 35
SECTION 8.14. Execution in Counterparts . . . . . . . . . . 35
SECTION 8.15. Waiver of Trial by Jury . . . . . . . . . . . 35
EXHIBIT A Form of Notice of Borrowing . . . . . . . . . . . . . . A-1
EXHIBIT B Section 4.01(a) Certificate . . . . . . . . . . . . . . B-1
EXHIBIT C Assignment and Acceptance . . . . . . . . . . . . . . . C-1
EXHIBIT D Form of Opinion of W. J. Hallinan, Esq. . . . . . . . . D-1
EXHIBIT E Form of Extension Request . . . . . . . . . . . . . . . E-1
EXHIBIT F Form of Promissory Note . . . . . . . . . . . . . . . . F-1
SCHEDULE 1 Lending Offices
SCHEDULE 2 Exceptions to General Limits on Exposure
<PAGE>
FIFTH AMENDMENT AND RESTATEMENT
Dated as of May 18, 1993 of
CREDIT AGREEMENT
Dated as of May 31, 1976,
as Heretofore Amended
GREYHOUND FINANCIAL CORPORATION (formerly Greyhound Leasing &
Financial Corporation), a Delaware corporation (herein called the
"Company"), the undersigned lenders (together with each lender which becomes
a Lender hereunder pursuant to Sections 8.02 and 8.04, collectively the
"Lenders"), the undersigned Co-Agents, BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, a national banking association, CHEMICAL BANK, a New
York banking corporation, and CITIBANK, N.A., a national banking
association, individually and as agents (the "Agents") for the Lenders
hereunder, and CITIBANK, N.A., a national banking association, as
administrative agent (the "Administrative Agent") for the Lenders hereunder,
agree that the Credit Agreement, dated as of May 31, 1976, as heretofore
amended, among the Company, the Lenders and the Administrative Agent, is
hereby restated and amended to read in its entirety as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be
equally applicable to the singular and plural forms of the terms defined):
"Advance Accounts" has the meaning assigned to that term in
Section 2.02.
"Advance" shall mean an advance by a Lender to the Company
pursuant to Article II, and refers to a Base Rate Advance or a
Eurodollar Advance (each of which shall be a "Type" of Advance).
"Applicable Lending Office" shall mean, with respect to each
Lender, (i) such Lender's Domestic Lending Office in the case of a
Base Rate Advance and (ii) such Lender's Eurodollar Lending Office
in the case of a Eurodollar Advance.
"Assignment and Acceptance" has the meaning assigned to that
term in Section 8.04.
"Base Rate" shall mean, for any period (including any
Interest Period or portion thereof), a fluctuating interest rate
per annum as shall be in effect from time to time which rate per
annum shall at all times be equal to the sum of (i) the highest
of:
(a) The rate of interest announced publicly by Citibank
in New York, New York from time to time as Citibank's base
rate; or
(b) the sum of (A) 1/2 of one percent plus (B) the rate
obtained by dividing (x) the latest three-week moving average
of secondary market morning offering rates in the United
States for three-month certificates of deposit of major
United States money market banks (such three-week moving
average being determined weekly by Citibank on the basis of
such rates reported by certificate of deposit dealers to and
published by the Federal Reserve Bank of New York or, if such
publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank, in either
case adjusted to the nearest 1/4 of one percent or, if there
is no nearest 1/4 of one percent, to the next higher 1/4 of
one percent), by (y) a percentage equal to 100% minus the
average of the daily percentages specified during such three-
week period by the Board of Governors of the Federal Reserve
System for determining the maximum reserve requirement
(including, but not limited to, any marginal reserve
requirements for Citibank in respect of liabilities
consisting of or including (among other liabilities) three-
month nonpersonal time deposits of at least $100,000), plus
(C) the average during such three-week period of the daily
net annual assessment rates estimated in good faith by
Citibank for determining the current annual assessment
payable by Citibank to the Federal Deposit Insurance
Corporation for insuring three-month deposits in the United
States; or
(c) 1/2 of one percent above the Federal Funds Rate,
plus (ii) the applicable Margin; provided that the Base Rate shall
at no time exceed the maximum rate permitted by law. Each change
in the Base Rate shall take effect simultaneously with the
corresponding change in the applicable rate described above in
clause (a), (b) or clause (c) and any change in the applicable
Margin.
"Base Rate Advance" shall mean an Advance to which the Base
Rate is or is proposed to be applicable.
"Base Rate Advance Account" has the meaning assigned to that
term in Section 2.02.
"BofA" shall mean Bank of America National Trust and Savings
Association, a national banking association.
"Borrowing" shall mean a borrowing consisting of Advances of
the same Type and Interest Period made on the same day by the
Lenders.
"Business Day" shall mean any day of the year on which banks
are not required or authorized to close in New York, New York or
Los Angeles, California, and, if the applicable Business Day
relates to any Eurodollar Advance, a day of the year on which
dealings are carried on in the London interbank market.
"Capital Stock" shall mean, with respect to any corporation,
common stock and preferred stock of any class or classes (however
designated).
"Carrying Value" shall mean the sum of (i) Receivables plus
(ii) the residual value (as determined pursuant to the relevant
leases) of all equipment of the Company and the Subsidiaries under
lease, less Unearned Income.
"Chemical" shall mean Chemical Bank, a New York banking
corporation.
"Citibank" shall mean Citibank, N.A., a national banking
association.
"Commercial Paper" shall mean instruments for the payment of
money which mature within 270 days from the date of issue, are
commonly known as commercial paper and are of a character
customarily traded in the money market.
"Commitment" has the meaning assigned to that term in Section
2.01.
"Commitment Reallocation Event" means the occurrence, or
proposed occurrence, of (i) the non-ratable termination of any
Lender's Commitment pursuant to Section 2.11(b), (ii) any
extension of the Termination Date pursuant to Section 2.17 as to
less than all of the Lenders, or (iii) the addition of a New
Lender pursuant to Section 8.02.
"Consolidated Net Income" for any period shall mean the
amount of net income (or net loss) of the Company and the
Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP; provided, however, that Consolidated Net
Income shall not include (i) any net income (or net loss) of a
Subsidiary for any period during which it was not a Subsidiary,
(ii) any net income (or net loss) of any business, properties or
assets acquired (by way of merger, consolidation, purchase or
otherwise) by the Company or any Subsidiary for any period prior
to the acquisition thereof, or (iii) the equity of the Company or
any Subsidiary in the undistributed earnings of any entity other
than a Subsidiary.
"Debit Balance" has the meaning assigned to that term in
Section 2.02.
"Domestic Lending Office" shall mean, with respect to any
Lender, the office of such Lender specified as its "Domestic
Lending Office" on Schedule 1 hereto or such other office of such
Lender as such Lender may from time to time specify to the Company
and the Administrative Agent.
"Effective Date" shall mean May 19, 1993; provided all of the
conditions in Section 5.01 shall have been satisfied or waived on
or before such date.
"Eligible Assignee" means any financial institution or entity
engaged in the business of extending revolving credit and having
consolidated assets of $500,000,000 or more; excluding, however,
any insurance companies or commercial finance companies.
"Environmental Laws" shall mean any and all federal, state,
local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or other governmental
restrictions applicable to the Company or any Subsidiary relating
to the environment or to emissions, discharges or releases of
pollutants, contaminants, petroleum or petroleum products,
chemicals or industrial, toxic or hazardous substances or wastes
into the environment including, without limitation, ambient air,
surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants,
petroleum or petroleum products, chemicals or industrial, toxic or
hazardous substances or wastes or the clean-up or other
remediation thereof.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"ERISA Affiliate", as applied to any Person, shall mean any
trade or business (whether or not incorporated) which is a member
of a group of which that Person is a member and which is under
common control within the meaning of Section 414(b) and (c) of the
Internal Revenue Code of 1986, as amended.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Eurodollar Advance" shall mean an Advance to which the
Eurodollar Rate is or is proposed to be applicable.
"Eurodollar Advance Account" has the meaning assigned to that
term in Section 2.02.
"Eurodollar Lending Office" shall mean, with respect to each
Lender, the office of such Lender specified as its "Eurodollar
Lending Office" on Schedule 1 hereto or such other office of such
Lender as such Lender may from time to time specify to the Company
and the Administrative Agent.
"Eurodollar Rate" shall mean, in respect of any Interest
Period or portion thereof for any Eurodollar Advance, the sum of
the applicable LIBO Rate and the Margin applicable to such
Interest Period or portion thereof.
"Eurodollar Reserve Percentage" of any Lender for the
Interest Period for any Eurodollar Advance shall mean the reserve
percentage applicable during such Interest Period under
regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or if more than one such percentage
shall be so applicable, the daily average of such percentages for
those days in such Interest Period during which any such
percentage shall be so applicable) for determining the maximum
reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for such
Lender with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities having a term equal to such
Interest Period.
"Event of Default" has the meaning assigned to that term in
Section 6.01.
"Exposure" shall mean the aggregate Carrying Value of all
transactions in respect of any Person which is a customer of the
Company or any Subsidiary, any subsidiary of such Person or any
other Person, the obligations of which are guaranteed by a Person
that is a customer of the Company or such Subsidiary.
"Extension Request" shall mean a Request for Extension
delivered by the Company to the Lenders to request an extension of
the Termination Date in accordance with the provisions of Section
2.17, in substantially the form of Exhibit E hereto.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period 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 which is a Business Day, the average of the
quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board, or any analogous opinions, statements
or pronouncements of any successor thereto, which are applicable
in the United States to the circumstances as of the date of
determination.
"GFC Financial" shall mean GFC Financial Corporation, a
Delaware corporation.
"Greyhound European Financial Group" shall mean Greyhound
Financial & Leasing Corporation AG, a Switzerland corporation,
Greyhound Financial Services Limited, a United Kingdom
corporation, and their subsidiaries.
"Guaranty", as applied to any Person, shall mean any direct
or indirect liability, contingent or otherwise, of that Person
with respect to any obligation of another including, without
limitation, the endorsement (otherwise than for collection or
deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of
the obligation of another. The amount of any Guaranty shall be
equal to the amount of the obligation so guaranteed or otherwise
supported.
"Indebtedness", as applied to any Person, shall mean (i) all
indebtedness for borrowed money which is properly classified as a
liability on a balance sheet in conformity with GAAP, (ii) that
portion of obligations with respect to capital leases which is
properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing
obligations for borrowed money, except, in any case, unfunded
lines of credit, and (iv) any obligation owed for all or any part
of the deferred purchase price of property or services which
purchase price is (A) due more than six months from the date of
incurrence of the obligation in respect thereof, or (B) evidenced
by a note or similar written instrument, excluding, in any case,
indebtedness secured by equipment or property where the recourse
of the payee of such indebtedness is limited to the lessor's
interest in leases thereof, the rents and other amounts due
thereunder and such equipment or property.
"Interest Period" has the meaning assigned to that term in
Section 2.05(b).
"Level" means Level 1, Level 2, Level 3, Level 4, Level 5 or
Level 6, as the case may be.
"Level 1" shall mean the Company has a rating on its Long-
term Debt equal to or greater than A- from S&P or A3 from Moody's.
"Level 2" shall mean the Company has a rating on its Long-
term Debt equal to BBB+ from S&P or Baa1 from Moody's.
"Level 3" shall mean the Company has a rating on its Long-
term Debt equal to BBB from S&P or Baa2 from Moody's.
"Level 4" shall mean the Company has a rating on its Long-
term Debt equal to BBB- from S&P or Baa3 from Moody's.
"Level 5" shall mean the Company has a rating on its
Commercial Paper below A2 from S&P or P2 from Moody's.
"Level 6" shall mean the Company has a rating on its Long-
term Debt below BBB- from S&P or Baa3 from Moody's.
"Lien" shall mean any lien, mortgage, charge, claim, security
interest, pledge, hypothecation, right of another under any
conditional sale or other title retention agreement, or any other
encumbrance affecting title to property. Without limiting the
generality of the foregoing, the sale of property used or useful
in the business of the seller with the intention of retaining the
use thereof under a lease, or any other comparable arrangement
commonly referred to as a "sale and leaseback", shall be deemed to
create a Lien on such property.
"LIBO Rate" shall mean, for any Interest Period for a
Eurodollar Advance comprising part of the same Borrowing, an
interest rate per annum equal to the average (rounded upward to
the nearest whole multiple of 1/16 of 1% per annum, if such
average is not such a multiple) of the rate per annum at which
deposits in United States dollars are offered by the principal
office of each of the Reference Banks in London, England, to prime
banks in the London interbank market at 11:00 A.M. (London time)
two Business Days prior to the first day of such Interest Period
for a period equal to such Interest Period and in an amount
substantially equal to the amount of such Eurodollar Advance
comprising part of such Borrowing to be outstanding during such
Interest Period from such Reference Bank. The LIBO Rate for the
Interest Period for each Eurodollar Advance comprising part of the
same Borrowing shall be determined by the Administrative Agent on
the basis of applicable rates furnished to and received by the
Administrative Agent from the Reference Banks two Business Days
before the first day of such Interest Period, subject, however, to
the provisions of Section 2.06.
"Long-term Debt" shall mean senior, unsecured, public
long-term debt securities of the Company.
"Majority Lenders" shall mean at any time Lenders holding at
least 66-2/3% of the then aggregate unpaid principal amount of the
Debit Balances held by Lenders or, if no such principal amount is
then outstanding, Lenders having at least 66-2/3% of the Total
Commitments.
"Margin" shall mean with respect to any day in any Interest
Period in relation to any Advance, the percentages set forth in
Table A below, with respect to determinations of the Base Rate, or
Table B below, with respect to determinations of the Eurodollar
Rate:
Table A
Base Rate Margins
(in basis points)
Outstanding Advances as Percentage of Commitments
Less than 33 1/3% to More than
Rating Level 33 1/3% 66 2/3% 66 2/3%
------------ --------- ---------- ---------
Level 1 -20.00 -20.00 -20.00
Level 2 -25.00 -25.00 -25.00
Level 3 -31.25 -31.25 -31.25
Level 4 -37.50 -12.50 12.50
Level 5 -12.50 12.50 37.50
Level 6 -18.75 6.25 31.25
Table B
Eurodollar Margins
(in basis points)
Outstanding Advances as Percentage of Commitments
Less than 33 1/3% to More than
Rating Level 33 1/3% 66 2/3% 66 2/3%
------------ --------- ---------- ---------
Level 1 42.50 67.50 80.00
Level 2 43.75 68.75 87.50
Level 3 43.75 68.75 93.75
Level 4 62.50 87.50 112.50
Level 5 87.50 112.50 137.50
Level 6 81.25 106.25 131.25
The applicable Margin shall be adjusted daily to reflect changes in the
outstanding principal amount of the Advances (determined for any day as
of the close of business) and the rating Level applicable to
outstanding debt of the Company in accordance with Section 2.07.
"Moody's" shall mean Moody's Investors Service, Inc.
"New Lender" shall have the meaning assigned to that term in
Section 8.02.
"Notice of Borrowing" has the meaning specified in Section 2.04.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established under ERISA or any successor thereto under ERISA.
"Person" shall mean an individual, corporation, partnership, joint
venture, trust or unincorporated organization, any nation, state or
government or political subdivision thereof or any agency of such
nation, state, government or political subdivision.
"Plan" shall mean an employee benefit plan (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA)
maintained for employees of the Company or any of its ERISA Affiliates
and covered by Title IV of ERISA.
"Receivables" shall mean the sum of (i) the aggregate amounts then
due or to become due to the Company and the Subsidiaries under all
contracts receivable and equipment leases then in effect, less all
lease rental deposits received by the Company and the Subsidiaries
under such leases and (ii) the aggregate amounts paid or payable by the
Company and the Subsidiaries for equipment not yet delivered, provided
there is then in effect a written agreement (not subject to any
assignment, lien, security interest or other encumbrance) to lease or
obtain financing for such equipment from the Company or the
Subsidiaries upon delivery, but only to the extent that the agreed-upon
rentals or payments by the customer for such equipment cover such
amounts.
"Reference Banks" shall mean Citibank, BofA, Chemical, National
Westminster Bank USA and Bank of Montreal.
"S&P" shall mean Standard & Poor's Corporation.
"Secured Indebtedness" shall mean all Senior Indebtedness and
Subordinated Indebtedness secured by any Lien (including the Lien of a
conditional vendor) upon or with respect to any of the property or
assets of the Company or the Subsidiaries, including, for purposes of
Section 4.02(b) of this Agreement, obligations incurred in transactions
in which the Company is the lessee and sublessor of the property
securing such obligations.
"Senior Indebtedness" shall mean all Indebtedness of the Company
and the Subsidiaries, and including any direct or contingent liability
in connection with the assumption or Guaranty of, or undertaking with
respect to, the obligations of any Person other than the Company or the
Subsidiaries, but excluding Subordinated Indebtedness.
"Stockholders' Equity" shall mean the excess of (a) the assets of
the Company and its consolidated subsidiaries over (b) the sum of
liabilities (including without limitation as liabilities all deferred
items) plus preferred stock plus minority interests, in each case for
the Company and its consolidated subsidiaries, computed in accordance
with GAAP.
"Subordinated Indebtedness" shall mean Indebtedness of the Company
which is issued and outstanding on the date hereof or issued after the
date hereof which is, in the sole opinion of the Majority Lenders,
subordinated by its terms in right of payment to all Indebtedness
hereunder, on terms satisfactory to the Majority Lenders.
"Subsidiaries" shall mean corporations of which the Company shall
directly or indirectly own 51% of the outstanding capital stock, other
than directors' qualifying shares.
"Surviving Corporation" has the meaning assigned to that term in
Section 4.02(f).
"Tangible Net Worth" shall mean Stockholders' Equity less all
assets of the Company and consolidated subsidiaries that would be
classified as intangible assets under GAAP.
"Termination Date" shall mean May 31, 1996; provided, however,
that, if any Lender has consented to an Extension Request in accordance
with Section 2.17, the Termination Date as to such Lender shall be
automatically extended for one year; provided, however, that,
notwithstanding any other provisions of this Agreement to the contrary,
the Termination Date shall occur upon the earlier termination in whole
of the Commitments pursuant to Section 2.11 or 6.01.
"Termination Event" shall mean (i) a "Reportable Event" described
in Section 4043 of ERISA and the regulations issued thereunder (other
than a "Reportable Event" not subject to the provision for 30-day
notice to the PBGC under such regulations), or (ii) the withdrawal of
the Company or any of its ERISA Affiliates from a Plan during a plan
year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, or (iii) the filing of a notice of intent to
terminate a Plan or the treatment of a Plan amendment as a termination
under Section 4041 of ERISA, or (iv) the institution of proceedings to
terminate a Plan by the PBGC, or (v) any other event or condition which
constitutes grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or (vi) the
imposition of a lien pursuant to Section 412(n) of the Internal Revenue
Code of 1986, as amended.
"Total Commitments" shall mean, at the time for any determination
thereof, the aggregate of the Commitments of the Lenders.
"Unearned Income" shall mean those amounts carried on the books of
the Company and its Subsidiaries from time to time of the type
identified as "unearned income" in the audit report, certified by
Deloitte & Touche, of the Company and its Subsidiaries for the year
ended December 31, 1992.
ARTICLE II
Amount and Terms of the Credit
SECTION 2.01. The Advances.
(a) Each Lender severally agrees, on the terms and conditions
hereinafter set forth, to make Advances to the Company from time to time on
any Business Day during the period from the date hereof to but excluding the
Termination Date, as in effect for such Lender, in an aggregate principal
amount at any one time outstanding not to exceed the amount set opposite
such Lender's name on the signature pages hereof, as such amount may be
reduced pursuant to Section 2.11 (such Lender's "Commitment"). The
aggregate of all Commitments hereunder on the Effective Date is
$700,000,000. Within the limits of each Lender's Commitment, the Company
may from time to time borrow, repay pursuant to Section 2.08 or prepay
pursuant to Section 2.03, and reborrow under this Section 2.01.
(b) Each Borrowing shall be (i) in the case of a Base Rate
Advance, in an aggregate principal amount of not less than $5,000,000 or, if
greater, in an aggregate principal amount which is an integral multiple of
$500,000, and (ii) in the case of a Eurodollar Advance, in an aggregate
principal amount of not less than $15,000,000 or, if greater, an aggregate
principal amount which is an integral multiple of $500,000 (except that any
Borrowing consisting of Base Rate Advances may be in an aggregate principal
amount equal to the unused portion of the Total Commitments) and shall
consist of Advances of the same Type and Interest Period, in each case made
on the same day simultaneously by the Lenders ratably according to their
respective Commitments.
SECTION 2.02. The Advance Accounts. The Administrative Agent
will maintain two separate accounts, the "Base Rate Advance Account" and the
"Eurodollar Advance Account" (such accounts to be collectively called the
"Advance Accounts") for each Lender on the books of the Administrative Agent
each of which shall be in the name of the Company and of such Lender in
which, respectively, (i) the amount of each Base Rate Advance made by such
Lender shall be debited on the date such Base Rate Advance is made available
to the Company or on the date such Base Rate Advance is deemed to arise
pursuant to Section 2.05(b)(i), (ii) the amount of each Eurodollar Advance
made by such Lender shall be debited on the date such Eurodollar Advance is
made available to the Company, (iii) each payment to such Lender in respect
of principal of a Base Rate Advance shall be credited on the date on which
payment is received, and (iv) each payment (including a payment deemed to
have been received pursuant to Section 2.05(b)(i)) to such Lender in respect
of a Eurodollar Advance shall be credited on the date on which payment is
received. The "Debit Balance" as of any date for a Lender in its Base Rate
Advance Account or its Eurodollar Advance Account shall be the amount equal
to the excess, if any, of all debit entries over all credit entries recorded
pursuant to this Agreement in such Advance Account in the name of such
Lender (as set forth in the Register described in Section 8.04(d)) up to and
including any date of determination thereof; provided, however that the
failure of the Administrative Agent or a Lender to make an entry in any
Advance Account shall not limit or otherwise affect the obligation of the
Company hereunder with respect to payments of principal of or interest on
the Advances.
SECTION 2.03. Prepayments of Debit Balances.
(a) The Company shall have no right to prepay any principal
amount of any Advances other than as provided in this subsection (a). The
Company may, upon at least one Business Day's notice to the Administrative
Agent in the case of Base Rate Advances and at least three Business Days'
notice to the Administrative Agent in the case of Eurodollar Advances
stating the proposed date and the aggregate principal amount of the
prepayment, and if such notice is given the Company shall, prepay the
outstanding principal amounts of the Advances comprising part of the same
Borrowing in whole or ratably in part; provided, however, that (x) each
partial prepayment shall be in an aggregate principal amount not less than
$5,000,000 and integral multiples of $1,000,000 in excess thereof and
(y) the Company shall pay all accrued interest to the date of such
prepayment on the portion of any Advance being prepaid and shall, in the
case of any such prepayment of any Eurodollar Advance, be obligated to
reimburse the Lenders in respect thereof pursuant to Section 2.13. Base
Rate Advances may be prepaid without premium or penalty.
(b)(i) The Lenders may require prepayment of the Advances and
termination of the Commitments in the manner set forth in subsection
(b)(ii) below, upon the occurrence (or, as set forth in subsection
(b)(ii) below, the proposed occurrence) of either of the following
events (the events described in clauses (x) or (y) are sometimes
hereinafter referred to as a "Change of Control"):
(x) any Person or two or more Persons acting in concert
shall have acquired beneficial ownership or the right to acquire
beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange
Act of 1934), directly or indirectly, of securities of GFC
Financial or the Company (or other securities convertible into
such securities) representing 25% or more of the combined voting
power of all securities of GFC Financial or the Company entitled
to vote in the election of directors, other than securities having
such power only by reason of the happening of a contingency
("Share Acquisition"); or
(y) individuals who either (1) have been directors of GFC
Financial or the Company for the prior 24-month period or (2) were
nominated or elected by directors in office during such period
(but prior to any Share Acquisition) shall cease for any reason to
constitute a majority of the board of directors of GFC Financial
or the Company.
(ii) The Company shall give prompt written notice to each
Lender ("Company Notice") of any proposed or actual Change of Control
as follows: (x) if the Company has knowledge of and the board of
directors consents to (or does not oppose) a proposed Change of
Control, the Company shall notify the Lenders of such Change of Control
not more than 60 days nor less than 30 days prior to the consummation
of the Change of Control and (y) with respect to a Change of Control to
which the Company's board of directors does not consent and opposes,
the Company shall notify the Lenders of such Change of Control
immediately after the Company receives notice of such Change of
Control. For a period of 90 days following receipt of the Company
Notice by each Lender, each Lender shall have the right by written
notice to the Company ("Lender Notice") to terminate its Commitment and
to require the Company to prepay in whole, but not in part, without
premium or penalty, all Advances of such Lender, with accrued interest
and fees to the date of such prepayment on the amount of such Advances
prepaid. The date of prepayment and termination of any Commitments
following the Company's receipt of any Lender Notices shall be
determined by the Company and shall not be less than 60 or more than 90
days after the date of receipt by the Company of the first Lender
Notice. The Company agrees to make such prepayment if so required.
SECTION 2.04. Making the Advances.
(a) Each Borrowing shall be made on notice given not later than
(i) 11:00 A.M. (New York City time) in the case of a Borrowing which is to
consist of Base Rate Advances, on the Business Day of such Borrowing and
(ii) 12:00 Noon (New York City time) in the case of a Borrowing which is to
consist of Eurodollar Advances, on the third Business Day prior to such
Borrowing from the Company to the Administrative Agent (which shall give
prompt notice thereof to each Lender). Each such notice (a "Notice of
Borrowing") shall be by telex or telecopy facsimile, confirmed immediately
in writing, in substantially the form of Exhibit A hereto and shall specify
(i) the date of such Borrowing, which shall be a Business Day, (ii) the Type
of Advances comprising such Borrowing, (iii) the aggregate amount of the
proposed Borrowing, and (iv) the Interest Period for the Advances to be made
as part of such Borrowing. Each Lender through its Applicable Lending
Office shall, before (x) in the case of a Borrowing which is to consist of a
Base Rate Advance, 1:00 P.M. (New York City time), and (y) in the case of a
Borrowing which is to consist of a Eurodollar Advance, 12:00 Noon (New York
City time) on the date of such Borrowing, make available to the
Administrative Agent at its address provided for in Section 8.03 such
Lender's ratable portion of such Borrowing in same day funds. Upon
fulfillment of the applicable conditions set forth in Article V and after
receipt by the Administrative Agent of such funds, the Administrative Agent
will make such funds available to the Company at the Administrative Agent's
aforesaid address.
(b) Anything in subsection (a) above to the contrary
notwithstanding,
(i) if any Lender shall notify (which notice shall, if given in
relation to a proposed Borrowing, be given at least one Business Day
before the date of the proposed Borrowing) the Administrative Agent
that the introduction of or any change in or in the interpretation of
any law or regulation makes it unlawful, or that any central bank or
other governmental authority asserts that it is unlawful, for such
Lender or its Eurodollar Lending Office to perform its obligations
hereunder to make Eurodollar Advances or to fund or maintain Eurodollar
Advances hereunder, the Commitment of such Lender to make Eurodollar
Advances shall forthwith be suspended until the Administrative Agent
shall notify the Company that such Lender has determined that the
circumstances causing such suspension no longer exist and such Lender's
then outstanding Eurodollar Advances, if any, shall be converted to
Base Rate Advances; to the extent that such affected Eurodollar
Advances become Base Rate Advances, all payments of principal that
would have been otherwise applied to such Eurodollar Advances shall be
applied instead to such Lender's Base Rate Advances; provided that if
Majority Lenders are subject to the same illegality or assertion of
illegality, then the right of the Company to select Eurodollar Advances
for such Borrowing or any subsequent Borrowing shall forthwith be
suspended until the Administrative Agent shall notify the Company that
the circumstances causing such suspension no longer exist, and each
Advance comprising such Borrowing shall be converted to a Base Rate
Advance;
(ii) if fewer than two Reference Banks furnish timely information
to the Administrative Agent pursuant to Section 2.07 for determining
the LIBO Rate for Eurodollar Advances comprising any requested
Borrowing, the right of the Company to select Eurodollar Advances for
such Borrowing or any subsequent Borrowing shall be suspended until the
Administrative Agent shall notify the Company and the Lenders that the
circumstances causing such suspension no longer exist, and each Advance
comprising such Borrowing shall be converted to a Base Rate Advance;
and
(iii) if the Majority Lenders shall, at least one Business Day
before the date of any requested Borrowing, notify the Administrative
Agent that the LIBO Rate for Eurodollar Advances comprising such
Borrowing will not adequately reflect the cost to such Majority Lenders
of making or funding their respective Eurodollar Advances for such
Borrowing, the right of the Company to select Eurodollar Advances for
such Borrowing or any subsequent Borrowing shall be suspended until the
Administrative Agent shall notify the Company and the Lenders that the
circumstances causing such suspension no longer exist, and each Advance
comprising such Borrowing shall be converted to a Base Rate Advance.
(c) Each Notice of Borrowing shall be irrevocable and binding on
the Company and, in respect of a Borrowing consisting of Eurodollar Advances
specified in any such notice, the Company shall, in accordance with Section
2.13, indemnify each Lender against any loss or expense incurred by such
Lender as a result of any failure to fulfill on or before the date specified
for such Borrowing the applicable conditions set forth in Article V,
including, without limitation, any loss (including loss of anticipated
profits) or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund the Advance to be
made by such Lender as part of such Borrowing when such Advance, as a result
of such failure, is not made on such date.
(d) Unless the Administrative Agent shall have been notified by a
Lender before 12:00 Noon (New York City time) on the Business Day of the
making of a Base Rate Advance and 11:00 A.M. (New York City time) one
Business Day prior to the date of the making of any Eurodollar Advance that
such Lender does not intend to make available to the Administrative Agent
such Lender's portion of the Advances to be made on such date, the
Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on the date for the making of such
Advances and the Administrative Agent may, in reliance upon such assumption,
make available to the Company a corresponding amount. If such portion is
not in fact made available to the Administrative Agent by such Lender and
the Administrative Agent shall have made such portion available to the
Company as aforesaid, the Administrative Agent shall be entitled to recover
such portion on demand from such Lender, which demand shall be made in a
reasonably prompt manner. If such Lender does not pay such amount forthwith
upon the Administrative Agent's demand therefor, the Administrative Agent
shall promptly notify the Company and the Company shall repay such
corresponding amount to the Administrative Agent. The Administrative Agent
shall also be entitled to recover from such Lender or the Company, as the
case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the
Administrative Agent to the Company to the date such corresponding amount is
recovered by the Administrative Agent, at (i) in the case of the Company,
the interest rate applicable at the time to Advances comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate.
Nothing herein shall be deemed to relieve any Lender from its obligation to
fulfill its Commitment hereunder or to prejudice any rights which the
Company may have against any Lender as a result of any default by such
Lender hereunder.
(e) The failure of any Lender to make the Advance to be made by
it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the Advance to be made by such other Lender on the date of
any Borrowing.
SECTION 2.05. Interest.
(a) The Company shall pay interest on the Debit Balance (i) in
each Base Rate Advance Account at the Base Rate and (ii) in each Eurodollar
Advance Account at the Eurodollar Rate until the final payment in full
thereof as herein provided. Interest in respect of Debit Balances in Base
Rate Advance Accounts shall be payable on the last day of each Interest
Period and, in the case of each Interest Period of greater than 30 days
duration, on each day which occurs every 30 days from the first day of such
Interest Period and interest in respect of Debit Balances in Eurodollar
Advance Accounts shall be payable on the last day of each Interest Period
and, in the case of each Interest Period of greater than three months
duration, on each day which occurs during such Interest Period every three
months from the first day of such Interest Period. Interest in respect of
any Debit Balance in any Advance Account, with respect to any Lender, shall
also be payable on the Termination Date for such Lender and upon prepayment
of any Advance to the extent accrued on the amount so prepaid. Overdue
principal and, to the extent permitted by law, overdue interest in respect
of each Advance and all other overdue amounts owing hereunder shall, except
in the case of a Eurodollar Advance, bear interest for each day such amount
is overdue at a rate per annum equal to 2% per annum in excess of the Base
Rate in effect from time to time and shall in the case of a Eurodollar
Advance bear interest for each day such amount is overdue at a rate per
annum equal to (A) during the Interest Period applicable to such Eurodollar
Advance, the greater of (x) 2% per annum above the Base Rate in effect from
time to time and (y) 2% per annum above the rate per annum required to be
paid on such amount immediately prior to the date on which such amount
became due and (B) after the expiration of such Interest Period, 2% per
annum above the Base Rate in effect from time to time. In no event shall
interest payable hereunder to any Lender exceed the maximum rate of interest
payable to such Lender under applicable law.
(b) For each Base Rate Advance or Eurodollar Advance the Company
shall select an interest period (each such period being an "Interest
Period") to be applicable to such Advance. The Interest Period for each
Base Rate Advance or Eurodollar Advance shall begin on the last day of the
immediately preceding Interest Period, if any. The duration of each
Interest Period shall be (i) in the case of a Base Rate Advance, 30 or 60
days (or such shorter period as shall extend to and end on the Termination
Date for any Lender) and (ii) in the case of a Eurodollar Advance, one, two,
three or six months, in each case as the Company may select upon notice
received by the Administrative Agent (y) not later than 11:00 A.M. on the
first Business Day of such Interest Period, in the case of a Base Rate
Advance, or (z) at least three Business Days, in the case of a Eurodollar
Advance, prior to the first day of such Interest Period; provided, however,
that:
(i) if the Company fails to select the duration of any Interest
Period, on the day immediately following the last day of the then
current Interest Period for such Advance the Company shall be deemed to
have requested a Base Rate Advance in the amount of such Advance with
an Interest Period of 30 days, and if (A) the representations and
warranties contained in Section 3.01 hereof (excluding those contained
in paragraphs (e) and (f) thereof) are true and accurate, (B) no event
has occurred or is continuing or would result from the Borrowing of
such Base Rate Advance which constitutes an Event of Default hereunder
or which would constitute such an Event of Default but for the
requirement that notice be given or time elapse or both and (C) no
Commitment Reallocation Event is to occur on the last day of the then
current Interest Period, the Advance Accounts of the Lenders for which
such Advance is outstanding shall be deemed to have been paid in the
amount of such Advance and the Base Rate Advance Accounts of such
Lenders shall be deemed debited in the amount of such Base Rate
Advance;
(ii) Interest Periods commencing on the same date for
Advances comprising part of the same Borrowing shall be of the same
duration;
(iii) the Company may not select any Interest Period in
respect of Advances which ends after the Termination Date then in
effect for any Lender; and
(iv) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day; provided, in the case of any Interest Period for a
Eurodollar Advance, that if such extension would cause the last day of
such Interest Period to occur in the next following calendar month, the
last day of such Interest Period shall occur on the next preceding
Business Day.
The Administrative Agent shall promptly advise each Lender by telex or
telecopy facsimile of each Interest Period selected by the Company.
SECTION 2.06. Additional Interest on Eurodollar Advances. The
Company shall pay to each Lender, so long as such Lender shall be required
under regulations of the Board of Governors of the Federal Reserve System to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities, additional interest on the unpaid
principal amount of each Eurodollar Advance of such Lender, from the date of
such Advance until maturity of such Advance, at an interest rate per annum
equal at all times during the Interest Period for such Advance to the
remainder obtained by subtracting (i) the LIBO Rate for such Interest Period
from (ii) the rate obtained by dividing such LIBO Rate referred to in clause
(i) above by that percentage equal to 100% minus the Eurodollar Reserve
Percentage of such Lender for such Interest Period, payable on each date on
which interest is payable on such Advance. Such additional interest shall
be determined by such Lender and notified to the Company through the
Administrative Agent.
SECTION 2.07. Interest Rate Determination.
(a) Each Reference Bank agrees to furnish to the Administrative
Agent timely information for the purpose of determining each LIBO Rate.
Subject to the provisions of Section 2.04(b)(ii), if any one or more of the
Reference Banks shall not furnish such timely information to the
Administrative Agent for determination of any such interest rate, the
Administrative Agent shall determine such interest rate on the basis of
timely information furnished by the remaining Reference Banks.
(b) The Administrative Agent shall give prompt notice to the
Company and the Lenders of the applicable interest rate determined by the
Administrative Agent for purposes of this Agreement and, if requested by any
Lender, the applicable rate, if any, furnished by each Reference Bank for
determining the applicable interest rate.
(c) The Margin applicable to each interest rate shall be
determined by the Administrative Agent on the basis of timely information
furnished to it by the Company, Moody's or S&P with respect to the rating on
Long-term Debt or Commercial Paper; any change in the Margin shall be
effective on the earlier of the date on which such rating change is publicly
announced or on the date written confirmation of a change in the rating on
Long-term Debt or Commercial Paper is sent to the Company by either Moody's
or S&P. For purposes of determining the appropriate Level and Margin, if
the Company's rating satisfies the criteria in two Levels the applicable
Level shall be the one with the higher number and lower rating of the two.
SECTION 2.08. Repayment.
(a) Except as provided in Section 2.05(b)(i), the Company shall
repay the unpaid principal amount of each Advance made by each Lender on the
last day of the Interest Period for such Advance, and the Company shall
repay the unpaid principal amount of all Advances made by any Lender,
together with all accrued and unpaid interest thereon and any other amount
due hereunder to such Lender, on the Termination Date as in effect for such
Lender.
(b) On the later of each date when any reduction in the Lenders'
Commitment is made by the Company pursuant to Section 2.11(a) or the last
day of the current Interest Periods for the Advances to be repaid, the
Company shall repay the Advances in an amount equal to the excess, if any,
of (x) the aggregate principal amount of the Advances outstanding on such
date over (y) the Total Commitments as reduced on such date pursuant to
Section 2.11(a).
(c) On the date when any Lender's Commitment is terminated
pursuant to Section 2.11, the Company shall repay the amount of all Advances
owing to such Lender.
SECTION 2.09. Increased Costs. If, due to (i) the
introduction of or any change (other than any change by way of imposition or
increase of reserve requirements referred to in Section 2.06) in or in the
interpretation of any law or regulation, (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law) or (iii) the imposition,
modification or application of any capital adequacy or similar requirement
(A) against assets (funded or contingent) of, or credit or commitments to
extend credit extended by, any Lender or (B) otherwise applicable to the
obligations of any Lender under this Agreement, there shall be any increase
in the cost to any Lender of agreeing to make or making, funding or
maintaining Advances or Debit Balances (or, in the case of any capital
adequacy or similar requirement, having the effect of reducing the rate of
return on such Lender's capital or increasing the amount of capital
required or expected to be maintained by such Lender or any corporation
controlling the Lender, taking into consideration such Lender's policies
with respect to capital adequacy), which such Lender is not otherwise
compensated for by other provisions of this Agreement, then the Company
shall from time to time, upon demand by such Lender (with a copy of such
demand to the Administrative Agent), pay to the Administrative Agent for
account of such Lender additional amounts sufficient to indemnify such
Lender against such increased cost (or reduced rate of return or increased
amount of capital, to the extent such Lender reasonably determines such
reduction or increase to be allocable to the maintenance of the Agreement).
A certificate as to the amount of such increased cost (providing an
explanation thereof and the calculation thereof, all in reasonable detail,
and using reasonable averaging and attribution methods), submitted to the
Company (with a copy to the Administrative Agent) by such Lender shall,
absent manifest error, be conclusive and binding for all purposes.
SECTION 2.10. Facility Fee. The Company agrees to pay to the
Administrative Agent for the account of each Lender a facility fee on the
daily amount of such Lender's Commitment (determined without regard to the
amount of Advances outstanding thereunder and after giving effect to any
reduction thereof pursuant to Section 2.11) from the date hereof (in the
case of each Lender party hereto as of the Effective Date) or from the
effective date specified in the applicable Assignment and Acceptance (in the
case of any Lender becoming a Lender after the Effective Date), until the
Termination Date, as in effect for such Lender, payable in arrears on the
last day of each March, June, September and December during the term of such
Lender's Commitment, commencing June 30, 1993, and on any such Termination
Date, at the rate of: with respect to each day that (i) the Company's
rating on Long-term Debt is Level 1, .20% per annum, (ii) the Company's
rating on Long-term Debt is Level 2, .25% per annum, (iii) the Company's
rating on Long-term Debt is Level 3, .3125% per annum, (iv) the Company's
rating on Long-term Debt is Level 4 or the Company's rating on Commercial
Paper is Level 5, .375% per annum, or (v) the Company's rating on Long-term
Debt is Level 6, .4375% per annum. If any change in the rating by S&P or
Moody's shall result in a change in the Level, the change in the facility
fee shall be effective on the earlier of the date on which such rating
change is publicly announced or on the date written confirmation of such
ratings is sent to the Company by either Moody's or S&P. If the Company's
rating satisfies the criteria in two Levels, the applicable Level shall be
the one with the higher number and lower rating of the two Levels.
SECTION 2.11. Reduction of the Commitments.
(a) The Company may, upon at least five Business Days' notice to
the Administrative Agent, terminate in whole or reduce ratably in part the
respective unused Commitments of the Lenders; provided that each partial
reduction shall be in an aggregate amount of not less than $5,000,000 or, if
greater, in an aggregate amount which is an integral multiple of $1,000,000.
(b) At any time, if no event has occurred and is continuing which
constitutes an Event of Default or which would constitute an Event of
Default but for the requirement that notice be given or time elapse or both,
the Company may, with the consent of the Administrative Agent (which consent
shall not be unreasonably withheld), terminate the Commitment of any one of
the Lenders (each an "Old Lender") upon at least five business days' notice
to the Administrative Agent and the Old Lender, and, effective upon the date
of termination of the entire Commitment of, and repayment of all amounts
hereunder owing to, the Old Lender, may replace that Lender with a New
Lender pursuant to the provisions of Section 8.02; provided however, that,
as to outstanding Eurodollar Advances, a Commitment may be terminated only
at the end of an Interest Period such that the Commitment of an Old Lender
may be terminated in stages, a portion terminating as specified by the
Company in its notice and the remainder, equal to the outstanding Eurodollar
Advances, terminating at the end of the relevant Interest Period or Interest
Periods.
SECTION 2.12. Payments and Computations.
(a) The Company shall make each payment hereunder not later than
12:00 Noon (New York City time) on the day when due in United States dollars
to the Administrative Agent in same day funds at the Administrative Agent's
address provided for in Section 8.03. The Administrative Agent will
promptly thereafter make appropriate distribution of like funds to the
Lenders for the account of their respective Applicable Lending Offices.
(b) The Company hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made when due hereunder, to charge
from time to time against any or all of the Company's accounts with such
Lender any amount so due.
(c) All computations of interest in respect of Eurodollar
Advances and interest pursuant to Section 2.06 shall be made on the basis of
a year of 360 days, and all computations of facility fees and of interest in
respect of Base Rate Advances shall be made on the basis of a year of 365 or
366 days, as the case may be, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period
for which such interest or facility fees are payable. Each determination by
the Administrative Agent (or, in the case of Section 2.06, by a Lender) of
an interest rate hereunder shall, absent manifest error, be conclusive and
binding for all purposes.
(d) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or facility fee, as the
case may be; provided, however, if such extension would cause a payment in
respect of Eurodollar Advances to be made in the next following calendar
month, such payment shall be made on the next preceding Business Day.
(e) Unless the Administrative Agent shall have received notice
from the Company prior to the date on which any payment is due to the
Lenders hereunder that the Company will not make such payment in full, the
Administrative Agent may assume that the Company has made such payment in
full to the Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due such Lender.
If and to the extent the Company shall not have so made such payment in full
to the Administrative Agent, each Lender shall repay to the Administrative
Agent forthwith on demand such amount distributed to such Lender together
with interest thereon, for each day from the date such amount is distributed
to such Lender until the date such Lender repays such amount to the
Administrative Agent, at the rate per annum equal to the rate customarily
used by member banks of the Federal Reserve System to settle net balances
due each other.
SECTION 2.13. Compensation.
The Company shall compensate each Lender, upon written request by
that Lender (which request shall be submitted to the Company (with a copy to
the Administrative Agent) and shall set forth in reasonable detail the
calculation of such amounts requested, which shall be based upon a method of
determination selected in good faith) for all losses, reasonable expenses
and liabilities (including, without limitation, any interest paid by that
Lender to lenders of funds borrowed by it to make or carry its Eurodollar
Advances and any loss sustained by that Lender in connection with re-
employment of such funds), which that Lender may sustain: (i) if for any
reason (including without limitation the circumstances set forth in Section
2.04(c) but other than a default by that Lender) a borrowing of any
Eurodollar Rate Advance does not occur on a date specified therefor in a
Notice of Borrowing, (ii) if any repayment of any of its Eurodollar Advances
occurs on a date which is not the last day of any Interest Period, or (iii)
as a consequence of any other default by the Company to repay its Eurodollar
Advances when required by the terms of this Agreement; it being agreed and
understood that each Lender shall use its reasonable efforts to mitigate any
such loss or expense.
SECTION 2.14. Taxes.
(a) Any and all payments by the Company hereunder shall be made,
in accordance with Section 2.12, free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding (1) in the
case of each Lender and the Administrative Agent, taxes imposed on its net
income, and franchise taxes imposed on it, by the jurisdiction under the
laws of which such Lender or the Administrative Agent (as the case may be)
is organized or any political subdivision thereof, (2) in the case of each
Lender, taxes imposed on its net income and franchise taxes imposed on it by
the jurisdiction of such Lender's Applicable Lending Office or any political
subdivision thereof and (3) in the case of each Lender and the
Administrative Agent, any taxes imposed by the United States by means of
withholding at the source if and to the extent that such taxes shall be in
effect and shall be applicable, on the date hereof, to payments to be made
to the Administrative Agent or such Lender's Applicable Lending Office (all
taxes, levies, imposts, deductions, charges, withholdings and liabilities,
other than those excluded pursuant to the preceding clauses (1), (2) and
(3), being hereinafter referred to as "Taxes"). If the Company shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender or the Administrative Agent, (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.14) such Lender or the Administrative Agent (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Company shall make such deductions and (iii)
the Company shall pay the full amount deducted to the relevant taxing
authority or other authority in accordance with applicable law.
(b) In addition, the Company agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement (hereinafter referred to as "Other Taxes").
(c) The Company will indemnify each Lender and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.14) paid by such Lender or the Administrative
Agent (as the case may be) or any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made within 30 days from the date such Lender or
the Administrative Agent (as the case may be) makes written demand therefor.
Each Lender agrees to provide reasonably prompt notice to the Administrative
Agent and the Company of any imposition of Taxes or Other Taxes against such
Lender; provided that failure to give such notice shall not affect such
Lender's right to indemnification hereunder. Each Lender agrees it will
promptly upon request by the Company furnish to the Company such evidence as
is reasonably available to such Lender as to the payment of the relevant
Taxes or Other Taxes, and that it will, if requested by the Company,
cooperate to the extent reasonable under the circumstances with the Company
in its efforts to obtain a refund or similar release in respect of such
payment.
(d) Within 30 days after the date of any payment of Taxes, the
Company will furnish to the Administrative Agent upon request of any Lender
transmitted through the Administrative Agent, at its address referred to in
Section 8.03, the original or a certified copy of a receipt evidencing
payment thereof. If no Taxes are payable in respect of any payment
hereunder, the Company will furnish to the Administrative Agent upon request
of any Lender transmitted through the Administrative Agent, at such address,
a certificate from each appropriate taxing authority, or an opinion of
counsel acceptable to the Administrative Agent, in either case stating that
such payment is exempt from or not subject to Taxes.
(e) Without prejudice to the survival of any other agreement of
the Company hereunder, the agreements and obligations of the Company
contained in this Section 2.14 shall survive the payment in full of
principal and interest hereunder.
SECTION 2.15. Sharing of Payments, Etc. If any Lender shall
obtain any payment (whether voluntarily, involuntarily, through the exercise
of any right of set-off, or otherwise) on account of any Debit Balance in
any of its Advance Accounts (other than pursuant to Section 2.06, 2.09,
2.11(b), 2.13 or 2.14) in excess of its ratable share of payments on account
of Debit Balances of the same type obtained by all the Lenders in the same
category, such Lender shall forthwith purchase from such other Lenders such
participations in such Debit Balances as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them,
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, the purchase shall be
rescinded and the purchase price restored to the extent of such recovery,
but without interest. The Company agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.15 may, to the
fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully
as if such Lender were the direct creditor of the Company in the amount of
such participation.
SECTION 2.16. Status of Prior Agreement. The Company, the
Administrative Agent and each Lender agree that the rights of each (if any)
under the Fourth Amendment and Restatement dated as of March 18, 1992 of the
Credit Agreement dated as of May 31, 1976, as amended by the First Amendment
dated as of October 5, 1992, shall (except, as to outstanding Advances,
commitment fees and interest accrued to the date of this Agreement, and
rights to indemnification and reimbursement of costs and expenses arising
prior to the date hereof which shall be governed by the provisions of such
Fourth Amendment and Restatement) cease and terminate as of the date of this
Agreement and the rights of each such party shall be governed by this
Agreement on and after such date.
SECTION 2.17. Extension of Commitments. At any time at not
more than twenty- seven (27) months nor less than ninety (90) days prior to
the Termination Date applicable to all or any Lenders, the Company may, at
its option, deliver to each Lender that has not theretofore rejected any
Extension Request delivered pursuant to this Section 2.17 a signed copy of
an Extension Request requesting an extension of such Termination Date to a
date one year after such Termination Date. Each Lender shall have the
right, in its sole discretion, to consent or not consent to any such
Extension Request and, if such Lender so consents, such Lender shall deliver
its consent to such Extension Request to the Company within forty-five (45)
days of the date of the Extension Request (with a copy to the Administrative
Agent). Any Lender that fails to consent to any Extension Request within
such forty-five-day period shall be deemed to have rejected such Extension
Request. If the Company shall not have received, within such forty-five-day
period, consents to such Extension Request from the Majority Lenders
(determined for purposes of this Section 2.17 by disregarding any Lender
which has theretofore rejected any Extension Request), the Company may elect
either (i) to withdraw the Extension Request by promptly notifying the
Administrative Agent and the Lenders originally receiving the Extension
Request by telephone, telex or telecopy facsimile of such withdrawal or (ii)
to proceed with such Extension Request by immediately notifying each Lender
which consented to the Extension Request and the Administrative Agent by
telephone, telex or telecopy facsimile, of the fact that the Majority
Lenders have not consented to the Extension Request and that the Company
nonetheless desires such extension, and any such Lender may, within five (5)
Business Days of its receipt of such notice from the Company, by telephone,
telex or telecopy facsimile notice to the Company and the Administrative
Agent, withdraw its consent to such Extension Request. If the Company
withdraws any Extension Request, such Extension Request shall thereafter be
disregarded for all purposes, including the determination of whether any
Lender has rejected an Extension Request. In the event any Lenders finally
consent to any Extension Request, the Termination Date to be extended
pursuant to such request shall be extended for one year but only as to such
consenting Lenders.
No Interest Period shall extend beyond any Termination Date,
regardless of any Lender's consent to any extension thereof. The
Commitment of any Lender rejecting an Extension Request with respect to a
Termination Date shall expire on such Termination Date, and the Company
shall pay all Advances of such Lender, and all other amounts due hereunder
to such Lender, in full on such Termination Date.
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Company.
The Company represents and warrants as follows:
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and each
of the Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. The
Company and each of the Subsidiaries have the corporate power,
authority and legal right to own and operate the assets and properties
and conduct the business now, and proposed to be, owned, operated and
conducted by it. All necessary consents, licenses, permits, approvals
or authorizations of, exemptions by, notices and reports to,
registrations, filings and declarations with, and any other act by or
in respect of, any Person requisite for such ownership, operation and
conduct have been obtained or performed except such of the foregoing
the failure to obtain or perform which would not, in the aggregate,
have a material adverse effect on the business, operations, assets or
financial or other condition of the Company and the Subsidiaries taken
as a whole. The Company and each of the Subsidiaries are duly
qualified as a foreign corporation and in good standing under the laws
of each jurisdiction where its ownership or leasing of property or
conduct of business requires such qualification and where the failure
to be so qualified or in good standing would, in the aggregate, have a
material adverse effect on the business, operations, assets or
financial or other condition of the Company and the Subsidiaries taken
as a whole.
(b) The Company has full corporate power, corporate authority and
legal right to execute and deliver this Agreement, to borrow hereunder
and to perform and observe the terms and provisions hereof.
(c) The execution and delivery and performance by the Company of
this Agreement have been duly authorized by all necessary corporate
action, require no governmental registrations or filings or approvals
and do not violate or contravene any law or any order of any court or
governmental agency or any indenture, agreement or other instrument to
which the Company is a party or by which it or any of its properties
may be bound.
(d) This Agreement is a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by bankruptcy,
insolvency and reorganization laws and other similar laws governing the
enforcement of lessors' or creditors' rights and by the effects of
specific performance, injunctive relief and other equitable remedies.
(e) There is no action, suit or proceeding at law or in equity or
by or before any court, governmental agency or arbitrator now pending
or to the knowledge of the Company threatened against or affecting the
Company or the Subsidiaries or its or their properties which might
reasonably be expected to materially adversely affect the financial
condition or operations of the Company and its consolidated
subsidiaries, taken as a whole, or purports to affect the legality,
validity or enforceability of this Agreement or the Company's ability
to repay any Advances hereunder.
(f) The consolidated balance sheets of the Company and its
consolidated subsidiaries as at December 31, 1991 and December 31,
1992, and the related consolidated statements of earnings and surplus
for the years then ended, certified by Deloitte & Touche, independent
public accountants, copies of which have been furnished to each Lender,
are complete and correct in all material respects and fairly set forth
the consolidated financial condition of the Company and its
consolidated subsidiaries as at such dates and the consolidated results
of operations of the Company and its consolidated subsidiaries for the
periods ended on such dates, all in accordance with GAAP applied on a
consistent basis, and since December 31, 1992, there has been no
material adverse change in such condition or operations which has not
been disclosed in writing to the Lenders prior to the date of this
Agreement.
(g) No proceeds of any Advance will be used to acquire any
security of a class which is registered pursuant to Section 12 of the
Securities Exchange Act of 1934.
(h) The Company is not engaged principally, or as one of its
important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal Reserve
System), and no proceeds of any Advance will be used to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock, or in any manner which might
cause such Advance or the application of such proceeds to violate (or
require any regulatory filing under) Regulation G, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System,
in each case as in effect on the date or dates of such Advance and such
use of proceeds.
(i) The Company and its ERISA Affiliates are in substantial
compliance with ERISA, none of the Company or any of its ERISA
Affiliates has incurred any material funding deficiency within the
meaning of ERISA and none of the Company or any of its ERISA Affiliates
has incurred any material liability to the PBGC in connection with any
employee benefit plan (or other class of benefit plan which the PBGC
has elected to insure) established or maintained by the Company or any
of its ERISA Affiliates. To the knowledge of the Company, after due
inquiry made at the time of the spin off referred to below, The Dial
Corp, an Arizona corporation ("Dial"), was at the time of its
distribution of 100% of the Capital Stock of the Company and the
Subsidiaries to the shareholders of Dial (the "spin off"), in
substantial compliance with ERISA, and the Company had no material
liability to the PBGC in connection with any employee benefit plan (or
other class of benefit plan which the PBGC has elected to insure)
established or maintained by Dial or any of its ERISA Affiliates at
such time.
(j) Neither the Company nor any Subsidiary is an "investment
company" or a company controlled by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(k) Except for limited recourse indebtedness and Secured
Indebtedness permitted hereunder, the obligations of the Company under
this Agreement to pay the principal of and interest on the Advances and
any and all other amounts due hereunder rank and will rank, as to
payment and security, at least pari passu with the highest ranking
indebtedness of the Company for borrowed money or under guarantees or
in respect of any indenture, contract, agreement or other instrument to
which the Company is a party or by which it is bound evidencing or
securing any obligation of the Company for borrowed money whether now
existing or incurred hereafter.
(l) Neither the Company nor any Subsidiary has any liabilities or
incurs any costs with respect to compliance with Environmental Laws
(including, without limitation, any capital or operating expenditures
required for clean-up or closure of properties presently or previously
owned, any capital or operating expenditures required to achieve or
maintain compliance with environmental protection standards imposed by
law or as a condition to any license, permit or contract, any related
constraints on operating activities, including any periodic or
permanent shutdown of any facility or reduction in the level of or
change in the nature of operations conducted thereat and any actual or
potential liabilities to third parties, including employees, and any
related costs and expenses) which will have, and the Company otherwise
believes that Environmental Laws are unlikely to have, a material
adverse effect on the business, financial condition, results of
operations or prospects of the Company and the Subsidiaries, taken as a
whole.
ARTICLE IV
Covenants
SECTION 4.01. Affirmative Covenants. During the period of
this Agreement and so long as any Commitment or Debit Balance is
outstanding, the Company will, unless the Majority Lenders shall otherwise
consent in writing:
(a) Furnish to each Lender (i) within 45 days after the close of
each of the first three quarters of the Company's fiscal year, a
consolidated balance sheet, surplus statement and income statement of
the Company and its consolidated subsidiaries, as of the end of such
quarter, certified by an authorized officer of the Company, together
with (A) a statement of such authorized officer of compliance with the
provisions of Section 4.02 hereof (which shall be substantially in the
form of Exhibit B hereto and which shall be completed in accordance
with GAAP (except as otherwise expressly specified herein) applied on a
consistent basis) and (B) a statement of such authorized officer that
no Event of Default, or event which would constitute an Event of
Default but for the requirement that notice be given or time elapse or
both, has occurred during such quarter (or, if the same has occurred, a
description thereof and a statement as to whether it is continuing),
(ii) within 90 days after the close of the Company's fiscal year, a
copy of the annual audit report of the Company and its consolidated
subsidiaries, certified by independent public accountants of recognized
standing acceptable to the Administrative Agent, and a statement of
such accountants of compliance with the provisions of Section 4.02
hereof (completed as specified in clause (A) above) together with
audited financial statements consisting of a consolidated balance sheet
of the Company and its consolidated subsidiaries, as of the end of such
fiscal year, and consolidated statements of income, cash flows and
shareholders' equity of the Company and its consolidated subsidiaries,
for such fiscal year, and (iii) such other information respecting the
financial condition and operations of the Company and its consolidated
subsidiaries as any Lender may from time to time reasonably request.
(b) Furnish to each Lender (i) promptly upon becoming aware of
the occurrence of any (A) Termination Event, or (B) "prohibited
transaction," as such term is defined in Section 4975 of the Internal
Revenue Code of 1986, as amended, or Section 406 of ERISA, in
connection with any Plan or any trust created thereunder, a written
notice specifying the nature thereof, what action the Company has
taken, is taking or proposes to take with respect thereto, and, when
known, any action taken or threatened by the Internal Revenue Service,
the Department of Labor, or the PBGC with respect thereto and (ii) with
reasonable promptness, copies of (A) all notices received by the
Company or any of its ERISA Affiliates of the PBGC's intent to
terminate any Plan or to have a trustee appointed to administer any
Plan; (B) each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) filed by the Company or GFC Financial with the
Internal Revenue Service with respect to each Plan; and (C) all notices
received by the Company or any of its ERISA Affiliates from a
multiemployer plan sponsor concerning the imposition or amount of
withdrawal liability pursuant to Section 4202 of ERISA.
(c) Use all proceeds of Advances for general corporate purposes,
including, without limitation, the repayment of maturing Commercial
Paper.
(d) Duly pay and discharge or cause to be paid and discharged,
and cause the Subsidiaries to duly pay and discharge or cause to be
paid and discharged, all taxes, assessments and governmental charges or
levies imposed upon it or the Subsidiaries or against its properties or
the properties of the Subsidiaries prior to the date on which penalties
attach thereto, unless and to the extent only that the same shall be
contested in good faith and by appropriate proceedings by the Company,
the Subsidiaries or any other Person liable with respect thereto, and
the Company shall set aside, and cause the Subsidiaries to set aside,
on its books or the books of the Subsidiaries, adequate reserves with
respect to any such tax, assessment, charge or levy so contested.
(e) Immediately notify the Administrative Agent of (i) any
litigation or other proceedings commenced or threatened affecting the
Company or any of the Subsidiaries that, in the opinion of the
Company's counsel materially adversely affects the Company and the
Subsidiaries, taken as a whole, or (ii) the occurrence of any Event of
Default, or event which would constitute an Event of Default but for
the requirement that notice be given or time elapse or both.
(f) Immediately notify the Administrative Agent of any change in
the ratings of the Company's Long-term Debt or Commercial Paper by S&P
or Moody's.
(g) Promptly upon any account receivable, in an outstanding
principal amount exceeding $20,000,000, becoming more than 90 days past
due, provide to the Administrative Agent, for distribution to the
Lenders, a written statement detailing the status of the account, the
most recent valuation of any collateral security therefor and any
factors the Company believes are reasonably likely to mitigate or
contribute to credit losses from such account.
(h) Perform and comply, and cause the Subsidiaries to perform and
comply, with all material obligations of the Company and the
Subsidiaries under all laws applicable to the Company or the
Subsidiaries and all indentures, agreements or other instruments to
which the Company or any of the Subsidiaries is a party or by which the
Company or any of the Subsidiaries or any of its or their properties is
bound.
(i) Maintain, and cause each Subsidiary to maintain, insurance
with responsible and reputable insurance companies or associations in
such amount and covering such risks as is usually carried by companies
engaged in similar businesses and owning similar properties in the same
general areas in which the Company or such Subsidiary operates, and/or
require each lessee of equipment to maintain insurance for the benefit
of the Company or any Subsidiary which is the lessor of such equipment,
with responsible and reputable insurance companies or associations in
an amount not less than the book value of such equipment to the lessor;
provided, however, the Company or any such lessee may itself insure or
retain risks if and to the extent such risks can be, under common
industry practice, self-insured.
(j) Preserve and maintain, and cause each of the Subsidiaries to
preserve and maintain, its corporate existence, rights (charter and
statutory) and franchises; and maintain and preserve, all of its
properties which are used or useful in the conduct of its business in
good working order and condition, ordinary wear and tear excepted;
provided, however, that this subsection (j) shall not apply in any case
when, in the good faith business judgment of the Company, such
preservation or maintenance is either not necessary or not appropriate
for the prudent management of the business of the Company.
(k) Permit any authorized representative designated by the
Administrative Agent or any Lender at the expense of the Administrative
Agent or such Lender, to visit and inspect any of the properties of the
Company or any of the Subsidiaries, including its and their financial
and accounting records, and to take extracts therefrom, and to discuss
its and their affairs, finances and accounts with its and their
officers and independent public accountants, all as reasonably deemed
necessary or appropriate by the Administrative Agent or such Lender,
during normal business hours, upon reasonable notice and as often as
may be reasonably requested.
(l) Comply, and cause each of the Subsidiaries to comply, with
all applicable laws, rules, regulations and orders, such compliance to
include, without limitation, complying with all Environmental Laws and
employee benefit laws, except where failure to so comply would not have
a material adverse effect on the business, condition (financial or
otherwise), operations or properties of the Company and the
Subsidiaries, taken as a whole.
SECTION 4.02. Negative Covenants. During the period of this
Agreement and so long as any Commitment or Debit Balance is outstanding, the
Company will not, without the prior written consent of the Majority Lenders:
(a) Permit the ratio of (1) total assets of the Company and its
consolidated subsidiaries, minus deferred income taxes, minus minority
interests, minus preferred stock equity, minus Stockholders' Equity,
plus Guaranties (not reflected on the Company's most recent
consolidated balance sheet) by the Company or any of its consolidated
subsidiaries to (2) Stockholders' Equity plus preferred stock equity
minus intangible assets shown on the books of the Company and its
consolidated subsidiaries (but only to the extent the amount of such
intangible assets exceeds $30,000,000), in each case in accordance with
GAAP, to be greater than 6.50 to 1.00 at any time on or after the
Effective Date through March 31, 1994 or 7.00 to 1.00 at any time after
March 31, 1994.
(b) Create, incur, assume or suffer to exist any Secured
Indebtedness of the Company or any Subsidiary, except (i) Indebtedness
secured by assignments of leases where the recourse of the payee of
such Indebtedness is expressly limited to the lessor's interest in
such leases, the rents and other amounts due thereunder and/or the
equipment or property leased thereunder, (ii) Secured Indebtedness
incurred in transactions in which the Company is the lessee and
sublessor of the equipment or property securing such Secured
Indebtedness where the recourse of the payee of such Secured
Indebtedness is expressly limited to the lessor's interest in leases,
the rents and other amounts due thereunder and/or the equipment or
property leased thereunder; provided that the amounts due under the
sublease of the equipment or property are not less than the amounts due
under the lease for such equipment or property, and (iii) other Secured
Indebtedness in an amount not to exceed an aggregate of $15,000,000 at
any one time outstanding which may be secured by assets or property
having any aggregate fair market value, as reasonably determined by the
Company, not exceeding $30,000,000.
(c) Permit the ratio of (A) the sum of Consolidated Net Income
(but exclusive of extraordinary, unusual or non-recurring gains or
losses not incurred in the ordinary course of business of the Company
and the Subsidiaries and any adverse effect on Consolidated Net Income
arising solely from any interaction between increases in the corporate
tax rate and the Company's prior accounting for deferred taxes under
FASB Statement No. 96) plus income taxes plus interest expense of the
Company and the Subsidiaries to (B) interest expense of the Company and
the Subsidiaries, in each case for the twelve-month period ending on
the last day of any fiscal quarter of the Company to be less than
1.25:1.00.
(d) Permit (i) the greatest Exposure (other than Exposure with
respect to transactions listed on Schedule 2) of the Company and the
Subsidiaries to exceed 15% of Tangible Net Worth; provided that the
Company shall not be liable for violations of this covenant if such
violation occurs as a result of the merger or consolidation of one or
more non-affiliated Persons so long as the Company does not take any
action thereafter to increase its Exposure to such Person other than
within the context of a workout or insolvency where the Company
believes such increase is necessary to protect its financial interests
or within the context of an extension of the scheduled maturity of an
existing credit.
(e) Permit the aggregate unpaid principal amount of Commercial
Paper or other short-term Indebtedness supported by committed lines of
credit of the Company and the Subsidiaries (or of any one or more of
them) to exceed at any time the sum of the unused portion of (i) the
Total Commitments and (ii) other commitments and committed lines of
credit containing provisions for the renewal and repayment, over a
period of at least 364 days, of the Indebtedness thereunder from
commercial banks and other financial institutions, which banks and
financial institutions shall be reasonably acceptable to the
Administrative Agent.
(f) Merge or consolidate, nor will it permit or suffer any
Subsidiary to merge or consolidate with or into any Person and will
not, nor permit any Subsidiary to, sell, lease or otherwise dispose of
all, or in excess of 10% of, the consolidated gross assets (determined
in accordance with GAAP but excluding intangibles) of the Company and
the Subsidiaries to any Person in a single transaction or series of
related transactions; provided, however, that (i) any Subsidiary may
merge into, or sell, lease or otherwise dispose of all, or any part, of
its assets to any other Subsidiary or the Company if such merger or
such sale, lease or other disposition does not result in a default by
the survivor or transferee under any agreement (including this
Agreement) to which any party to such merger or such sale, lease or
other disposition is then a party, (ii) the Company may sell all or
part of its properties to, or merge or consolidate with, another
corporation if: (A) the corporation (herein called the "Surviving
Corporation") to which such sale is made, or which results from such
merger or consolidation, is organized under the laws of the United
States of America or a jurisdiction thereof; (B) the due and punctual
performance and observance of all the provisions of this Agreement to
be performed or observed by the Company are expressly assumed in a
writing by the Surviving Corporation satisfactory to the Administrative
Agent; (C) the beneficial interest in and control of 100% of the issued
and outstanding Capital Stock of the Company (if it is the Surviving
Corporation) or 100% of the issued and outstanding Capital Stock of the
Surviving Corporation shall, immediately after such merger,
consolidation, sale or other disposition, be owned by GFC Financial,
free and clear of all liens, security interests, charges or other
encumbrances; (D) the Surviving Corporation shall be engaged in the
finance business; (E) immediately after the consummation of the
transaction, and after giving effect thereto, no default by the
Surviving Corporation exists under any agreement (including this
Agreement) by which it is then bound; and (F) immediately after the
consummation of the transaction, and after giving effect thereto, the
Surviving Corporation shall have a Tangible Net Worth equal to or
exceeding 95% of the Tangible Net Worth of the Company immediately
preceding the consummation of the transaction; (iii) the Company or any
Subsidiary may sell or discount receivables for fair value in arms
length transactions; and (iv) the Company may sell, transfer or
otherwise dispose of Greyhound European Financial Group or the assets
thereof.
(g) Declare or pay any dividends, purchase, redeem, retire or
otherwise acquire for value any of its Capital Stock now or hereafter
outstanding, return any capital to its stockholders as such, or make
any distribution of assets to its stockholders as such, or permit any
Subsidiary to do any of the foregoing, except that with respect to its
Capital Stock: (i) the Subsidiaries may declare and make payment of
cash and stock dividends, return capital and make distributions of
assets to other Subsidiaries or to the Company and (ii) the Company may
(A) declare and deliver stock dividends, and (B) declare and pay any
cash dividends on its Capital Stock to its stockholders and purchase,
redeem, retire or otherwise acquire shares of its own outstanding
Capital Stock if, after giving effect thereto, the aggregate payments
for all such purposes subsequent to December 31, 1991 would not exceed
50% of the sum of (1) Consolidated Net Income subsequent to December
31, 1991 plus (2) the aggregate net proceeds from the issuance or sale
for cash or other property (excluding any unpaid indebtedness under any
promissory note) of shares of the Company's Capital Stock subsequent to
December 31, 1991 plus (3) the aggregate net proceeds from the issuance
or sale subsequent to December 31, 1991, for cash or other property
(excluding any unpaid indebtedness under any promissory note), of any
Senior Indebtedness or Subordinated Indebtedness of the Company upon
its conversion into shares of the Company's Capital Stock; provided,
however, that notwithstanding the foregoing, the Company may redeem its
preferred stock issued to and held by The Dial Corp or its subsidiaries
as of the date hereof in accordance with the provisions of such
preferred stock.
(h) Permit Stockholders Equity to be less than the sum of
$275,000,000 plus 50% of cumulative consolidated net income for all
fiscal quarters ending after January 1, 1993 (determined without making
any reduction in the amount thereof by reason of any net loss arising
in any fiscal quarter) plus 50% of the net proceeds received by the
Company or any Subsidiary through the offer and sale of any shares of
its common stock (other than stock sold to employees of the Company or
any Subsidiary upon such employees' exercise of employee or executive
stock options).
(i) Create, assume, incur or suffer to be created, assumed or
incurred or to exist, or permit any Subsidiary to create, assume, incur
or suffer to be created, assumed or incurred or to exist, any Lien upon
any of the properties of any character of the Company or any Subsidiary
without making effective provision whereby all Debit Balances shall be
secured equally and ratably with (or prior to) any other obligation or
indebtedness so secured, so long as any such other obligation or
indebtedness remains secured; except, however, that, notwithstanding
the foregoing, the Company or any Subsidiary, without so securing the
Debit Balances, may
(i) lease property to others in the ordinary course of the
business of the Company or any Subsidiary or lease or sublease any
property if the property subject thereto is not needed by the
Company or any Subsidiary in the operation of its business;
(ii) create, incur or assume Liens or permit Liens to be
created, assumed, incurred or to exist if the Liens are created,
incurred and assumed in connection with Secured Indebtedness
permitted under Section 4.02(b);
(iii) make any deposit with or give any form of security to
any governmental agency or other body created or approved by law
or governmental regulation in order to enable the Company or such
Subsidiary to maintain self-insurance, or to participate in any
fund in connection with workmen's compensation, unemployment
insurance, old-age pensions, or other social security, or to share
in any privileges or other benefits available to corporations
participating in any such arrangement, or for any other purpose at
any time required by law or regulation promulgated by any
governmental agency or office as a condition to the transaction of
any business or the exercise of any privilege or license, or
deposit assets of the Company or such Subsidiary with any surety
company or clerk of any court, or in escrow, as collateral in
connection with, or in lieu of, any bond on appeal by the Company
or such Subsidiary from any judgment or decree against it, or in
connection with any other proceedings in actions at law or suits
in equity by or against the Company or such Subsidiary;
(iv) incur or suffer to be incurred or to exist upon any of
its property or assets (a) Liens for taxes, assessments or other
governmental charges or levies which are not yet due or are
payable without penalty or of which the amount, applicability or
validity is being contested by the Company or such Subsidiary in
good faith by appropriate proceedings and the Company or such
Subsidiary shall have set aside on its books reserves which it
deems to be adequate with respect thereto (segregated to the
extent required by GAAP), provided that foreclosure, distraint,
sale or similar proceedings have not been commenced, (b) the Liens
of any judgment, if such judgment shall not have remained
undischarged, or unstayed on appeal or otherwise, for more than
six months, (c) undetermined Liens or charges incident to
construction, (d) materialmen's, mechanics', workmen's,
repairmen's or other like Liens arising in the ordinary course of
business in respect of obligations which are not overdue or which
are being contested by the Company or such Subsidiary in good
faith by appropriate proceedings, or deposits to obtain the
release of such Liens, or (e) any encumbrances consisting of
zoning restrictions, licenses, easements and restrictions on the
use of real property and minor defects and irregularities in the
title thereto, which do not materially impair the use of such
property by the Company or such Subsidiary in the operation of its
business or the value of such property for the purpose of such
business;
(v) create other Liens incidental to the conduct of its
business or the ownership of its property and assets which were
not incurred in connection with the borrowing of money or the
obtaining of advances or credit, and which do not in the aggregate
materially detract from the value of its property or assets or
materially impair the use thereof in the operation of its
business;
(vi) create or suffer to be created or to exist in favor of
any lender of moneys or holder of commercial paper of the Company
or a Subsidiary in the ordinary course of business a banker's lien
or right of offset in the holder of such indebtedness or moneys of
the Company or a Subsidiary deposited with such lender or holder
in the ordinary course of business; and
(vii) create or suffer to be created or to exist with respect
to any of its property leasehold or purchase rights, exercisable
for a fair consideration, in favor of any Person which arise in
transactions entered into in the ordinary course of business.
ARTICLE V
Conditions of Lending
SECTION 5.01. Conditions Precedent to Effectiveness. The
effectiveness of this Agreement is subject to the prior or concurrent
satisfaction of the following conditions and the Administrative Agent shall
have received for the account of each Lender the following, each, unless
otherwise noted, dated the Effective Date, and in form and substance
satisfactory to the Administrative Agent and Agents:
(a) Certified copies of the resolutions of the Board of Directors
of the Company approving this Agreement and of all other documents
evidencing necessary corporate or governmental action with respect to
this Agreement, together with a signed copy of a certificate of the
Secretary or an Assistant Secretary of the Company, certifying the
name(s) of the officer(s) of the Company authorized to sign on behalf
thereof this Agreement, together with the true signature(s) of such
officer(s) and, with respect to the Company, the name(s) and/or
title(s) of the officer(s) authorized to make requests for Advances
pursuant to Section 2.04 hereof. Each Lender may conclusively rely on
such certificate of the Company until it shall receive a further
certificate of a Secretary or Assistant Secretary of the Company
cancelling or amending the prior certificate and submitting the true
signatures of the officers named in such further certificate.
(b) A signed copy of a favorable opinion of W. J. Hallinan, Vice
President, Secretary and counsel to the Company, substantially in the
form of Exhibit D hereto and as to such other matters as any Lender
through the Administrative Agent may reasonably request, which opinion
the Company hereby authorizes and instructs such counsel to prepare and
deliver.
(c) A signed copy of an opinion of O'Melveny & Myers, counsel for
Citibank, to the effect that while they have not independently
considered the matters covered by the opinion furnished pursuant to
paragraph (b) of this Section 5.01 to the extent necessary to enable
them to express the conclusions stated therein, (i) such opinion, this
Agreement and the other documents furnished pursuant to the preceding
provisions of this Section 5.01 and pursuant to Section 5.02 appear to
be in substantially acceptable legal form, and (ii) such opinion and
other documents are substantially responsive to the requirements of
this Agreement.
(d) The representations and warranties contained in Section 3.01
hereof shall be true and accurate on and as of the day hereof, and no
event shall have occurred and be continuing which constitutes an Event
of Default hereunder or which would constitute such an Event of Default
but for the requirement that notice be given or time elapse or both,
and the Company shall deliver a certificate of the President, any Vice
President or the Chief Financial Officer of the Company to such effect.
SECTION 5.02. Conditions Precedent to Each Advance. The
obligation of each Lender to make an Advance on the occasion of each
Borrowing is subject to the further conditions precedent that, on the date
of such Borrowing,
(a) the following statements shall be true, and the
Administrative Agent shall have received (or will receive with the
Notice of Borrowing as set forth in Section 2.04(a) hereof) for the
account of such Lender a certificate signed by a duly authorized
officer of the Company, dated the date of such Borrowing, stating that:
(i) The representations and warranties contained in Section
3.01 hereof (excluding those contained in paragraphs (e) and (f)
thereof) are true and accurate on and as of the date of such
borrowing as though made on and as of such date;
(ii) No circumstances exist that in the Company's reasonable
opinion would materially impair the Company's ability to repay
all outstanding Advances; and
(iii) No event has occurred and is continuing or would
result from such Borrowing which constitutes an Event of Default
hereunder or which would constitute such an Event of Default but
for the requirement that notice be given or time elapse or both;
and
(b) the Administrative Agent shall have received such other
approvals, opinions or documents as any Lender through the
Administrative Agent may reasonably request.
SECTION 5.03. Conditions Precedent to Certain Borrowings. The
obligation of each Lender to make that portion of an Advance on the occasion
of any Borrowing which would increase the aggregate outstanding amount of
Advances owing to such Lender over the aggregate amount of such Advances
outstanding immediately prior to the making of such Advance shall be subject
to the further conditions precedent that on the date of such Borrowing (i)
the representation and warranty contained in subsection (e) of Section 3.01
are correct on and as of the date of such Advance as though made on and as
of such date and (ii) the certificate furnished pursuant to Section 5.02
shall include a statement to the effect of clause (i) above; provided,
however, that, if the Company is unable to make the representation and
warranty contained in subsection (e) of Section 3.01 on the date of an
Advance by reason of there being an action, suit or proceeding at law or in
equity pending or threatened against the Company or the Subsidiaries which
purports to affect the legality, validity or enforceability of this
Agreement or the Company's ability to repay any Advances hereunder, such
representation and warranty shall be deemed to be made for purposes of this
Section 5.03 if the certificate furnished pursuant to Section 5.02 shall be
accompanied by an opinion of counsel to the Company in form and substance
reasonably satisfactory to the Administrative Agent, stating that such
litigation, in the opinion of such counsel, is of no merit insofar as it
concerns the legality, validity or enforceability of this Agreement or the
Company's ability to repay any Advances hereunder.
ARTICLE VI
Events of Default
SECTION 6.01. Events of Default. If any of the following
Events of Default shall occur and be continuing:
(a) The Company shall fail to pay when due (i) any interest or
principal in respect of any Debit Balance or (ii) any fee payable
pursuant to Section 2.10; or
(b) Any representation or warranty made in connection with the
execution and delivery of this Agreement or in any certificate or
instrument furnished pursuant hereto shall prove to have been incorrect
in any material respect when made; or
(c) The Company shall default in the performance of any other
term, covenant or agreement contained herein, and such default shall
continue unremedied for a period of ten days after written notice
thereof shall have been given to the Company by the Administrative
Agent (which shall give such notice only with the consent of, or if
requested by, Lenders having at least 51% of the Total Commitments); or
(d) The Company or any Subsidiary (other than Pine Top Insurance
Company, Ltd.) shall fail to pay any indebtedness for borrowed money or
any other obligation (other than hereunder) which is outstanding in a
principal amount exceeding $15,000,000 owing by the Company or such
Subsidiary (as the case may be), or any interest or premium thereon
when due (or if permitted by the terms of the relevant document, within
any applicable grace period), whether such indebtedness or obligation
shall become due by scheduled maturity, by required prepayment, by
acceleration, by demand or otherwise; or the Company or any Subsidiary
(other than Pine Top Insurance Company, Ltd.) shall fail to perform any
term, covenant or agreement on its part to be performed under any
agreement or instrument (other than this Agreement) evidencing or
securing or relating to any indebtedness for borrowed money or any
other obligation which is outstanding in a principal amount exceeding
$15,000,000 owing by the Company or any Subsidiary (as the case may be)
when required to be performed (or, if permitted by the terms of the
relevant document, within any applicable grace period) or any other
event shall occur, if the effect of such failure or other event is to
accelerate, or to permit the holder or holders of such indebtedness or
obligations or the trustee or trustees under any such agreement or
instrument to accelerate, the maturity of such indebtedness; or
(e) This Agreement shall, at any time after its execution and
delivery and for any reason attributable to the Company, cease to be in
full force and effect or shall be declared to be null and void, or the
validity or enforceability hereof shall be contested by the Company, or
the Company shall deny that it has any further liability or obligation
under this Agreement; or
(f) The Company shall make an assignment for the benefit of
creditors, or shall admit in writing its inability or shall be unable
to pay its debts as they become due, or shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or shall file any petition or answer seeking for
itself any reorganization, arrangement, composition, readjustment,
liquidation, dissolution, order for relief or similar relief under any
present or future statute, law or regulation, or shall file any answer
admitting or not contesting the material allegations of a petition
filed against the Company in any such proceeding, or shall seek or
consent to or acquiesce in the appointment of any trustee, receiver or
liquidator of the Company or of all or any substantial part of the
properties of the Company, or if the Company shall take any action
looking to the dissolution or liquidation of the Company or a court
having jurisdiction in the premises shall enter a decree or order for
relief in respect of the Company in an involuntary case under federal
bankruptcy laws now or hereafter in effect or any proceeding shall be
instituted by or against the Company seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry
of an order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its
property, and if instituted against the Company, remains undismissed
and unstayed for a period of 60 days; or the Company shall take any
corporate action to authorize any of the actions set forth above in
this subsection (f); or
(g)(i) The Company or any of its ERISA Affiliates shall fail to
make full payment when due of all amounts which, under the
provisions of any Plan or Section 412 of the Internal Revenue Code
of 1986, as amended, the Company or any of its ERISA Affiliates is
required to pay as contributions thereto;
(ii) Any accumulated funding deficiency (as defined in Section 412
of the Internal Revenue Code of 1986, as amended) occurs or
exists, whether or not waived, with respect to any Plan; or
(iii) Any Termination Event with respect to a Plan shall have
occurred, and, 30 days after notice thereof shall have been given
to the Company by the Administrative Agent or any Lender, (i) such
Termination Event (if correctable) shall not have been corrected
and (ii) the then present value of such Plan's vested benefits
exceeds the sum of (A) the fair market value of the assets
accumulated in such Plan and (B) any related balance sheet
accruals, by more than $1,000,000 (or, in the case of a
Termination Event involving a "substantial employer" (as defined
in Section 4001(a)(2) of ERISA), the withdrawing employer's
proportionate share of such excess shall exceed such amount);
then, and in any such event (other than an event described in subsection (f)
hereof), the Administrative Agent shall at the request, or may with the
consent, of the Majority Lenders, by notice to the Company, without
prejudice to the rights of the Administrative Agent or any Lender to enforce
its claims against the Company, (i) declare the obligation of each Lender to
make Advances to be terminated, whereupon the same shall forthwith
terminate, and (ii) cause all of the Debit Balances, all interest thereon
and all other amounts payable under this Agreement to be forthwith due and
payable, whereupon all Debit Balances, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby
expressly waived by the Company. If an Event of Default described in
subsection (f) hereof occurs, any obligation on the part of the Lenders
hereunder shall automatically terminate and all sums of principal, interest
and fees remaining on the Advances shall be immediately due and payable
without notice, presentment, demand or notices of any kind, all of which are
expressly waived.
ARTICLE VII
The Administrative Agent, Agents and Co-Agents
SECTION 7.01. Authorization and Action. Each Lender hereby
appoints and authorizes the Administrative Agent, Agents and Co-Agents to
take such action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Administrative Agent, Agents and Co-
Agents by the terms hereof, together with such powers as are reasonably
incidental thereto. As to any matters not expressly provided for by this
Agreement, the Administrative Agent, Agents and Co-Agents shall not be
required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in
so acting or refraining from acting) upon the instructions of Lenders having
at least 51% of the Total Commitments and such instruction shall be binding
upon all Lenders; provided, however, that none of the Administrative Agent,
any Agent or any Co-Agent shall be required to take any action which exposes
the Administrative Agent, such Agent or such Co-Agent, as the case may be,
to personal liability or which is contrary to this Agreement or applicable
law.
SECTION 7.02. Agents' Reliance, Etc. None of the
Administrative Agent, any Agent, any Co-Agent or any of their respective
directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, each of
the Administrative Agent, Agents and Co-Agents: (i) may treat the Lender
making any Advance as the holder thereof until the Administrative Agent
receives and accepts an Assignment and Acceptance entered into by such
Lender, as assignor, and an Eligible Assignee, in accordance with Section
8.04; (ii) may consult with legal counsel (including counsel for the
Company), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (iii) makes no warranty or representation to any Lender and shall
not be responsible to any Lender for any statements, warranties or
representations made in or in connection with this Agreement; (iv) shall not
have any duty to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of this Agreement on the part
of the Company or to inspect the property (including the books and records)
of the Company, except as expressly set forth herein; (v) shall not be
responsible to any Lender for the due execution (other than its own due
execution), legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished
pursuant hereto; and (vi) shall incur no liability under or in respect of
this Agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, telex or telecopy
facsimile) believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 7.03. Citibank, BofA , Chemical, any Co-Agent and
Their Affiliates. With respect to its Commitment and the Advances made by
it, Citibank, BofA, Chemical or any Co-Agent, as the case may be, shall have
the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Administrative Agent, an Agent
or a Co-Agent, as the case may be; and the term "Lender" or "Lenders" shall,
unless otherwise expressly indicated, include each of Citibank, BofA,
Chemical and any Co-Agent in its individual capacity. Citibank, BofA,
Chemical and each Co-Agent and their respective affiliates may accept
deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, the Company, any of the
Subsidiaries and any person or entity who may do business with or own
securities of the Company or any Subsidiary, all as if Citibank, BofA,
Chemical or such Co-Agent were not the Administrative Agent, an Agent or Co-
Agent, as the case may be, and without any duty to account therefor to the
Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent, any Agent, any Co-Agent or any other Lender and based
on the financial statements referred to in Section 3.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, any Agent, any Co-Agent or any other Lender 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 Agreement.
SECTION 7.05. Indemnification. The Lenders agree to indemnify
the Administrative Agent, each Agent and each Co-Agent (to the extent not
reimbursed by the Company), ratably according to the respective amounts of
the Advance Accounts then held by each of them (or if no Advances are at the
time outstanding, ratably according to the respective amounts of their
Commitments), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Administrative Agent, such Agent or
such Co-Agent in any way relating to or arising out of this Agreement or any
action taken or omitted by the Administrative Agent, such Agent or such Co-
Agent under this Agreement, provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
the Administrative Agent's, such Agent's or such Co-Agent's gross negligence
or willful misconduct. Without limitation of the foregoing, each Lender
agrees to reimburse the Administrative Agent and each Agent promptly upon
demand for its ratable share of any reasonable out-of-pocket expenses
(including counsel fees) incurred by the Administrative Agent or such agent
in connection with the preparation, execution, administration, or
enforcement of, or legal advice in respect of rights or responsibilities
under, this Agreement, to the extent that the Administrative Agent or such
Agent is not reimbursed for such expenses by the Company.
SECTION 7.06. Successor Agent. The Administrative Agent, any
Agent and any Co-Agent may resign at any time by giving written notice
thereof to the Lenders and the Company and the Administrative Agent may be
removed at any time with or without cause by Majority Lenders. Upon any
such resignation or removal of the Administrative Agent, Majority Lenders
shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by Majority
Lenders, and if no successor Administrative Agent shall have accepted such
appointment, within 30 days after the retiring Administrative Agent's giving
of notice of resignation or the removal of the retiring Administrative Agent
by Majority Lenders, then the retiring Administrative Agent may, on behalf
of the Lenders, appoint a successor Administrative Agent, which shall be a
Lender or a commercial bank organized under the laws of the United States of
America or of any State thereof and having combined capital and surplus of
at least $500,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
ARTICLE VIII
Miscellaneous
SECTION 8.01. No Waiver; Amendments. No failure or delay on
the part of the Administrative Agent or any Lender in exercising any power
or right hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any right or power preclude any other or further
exercise thereof or the exercise of any other right or power hereunder. No
amendment, modification or waiver of any provision of this Agreement, nor
consent to any departure by the Company therefrom, shall in any event be
effective unless the same shall be in writing and consented to by the
Majority Lenders (except that no such amendment, modification, waiver or
consent which would increase any Lender's Commitment, reduce, or postpone
any date fixed for any payment of, principal of, or interest on, the Debit
Balances or any fees or other amounts payable hereunder or change the
percentage of the Commitments or of the aggregate unpaid Debit Balances
which shall be required for the Lenders or any of them to take action
hereunder (including, without limitation, any amendment to the definition of
"Majority Lenders" or this Section 8.01) or which would affect any provision
contained in Section 5.01, Section 5.02 (if and to the extent that the
Borrowing which is the subject of such amendment, waiver or consent would
involve an increase in the aggregate amount of Advances over the aggregate
amount of Advances outstanding immediately prior to such Borrowing), Section
5.03, this Section 8.01 or Section 8.05 shall be effective unless consented
to by all Lenders then having a Commitment) and then such waiver or consent
shall be effective only in the specific instance and for the purpose for
which given; provided, however, that the amount of any Lender's Commitment
may be raised by agreement in writing between the Company and such Lender,
with notice thereof to each other Lender then having a Commitment and to the
Administrative Agent. No amendment, modification or waiver of or consent
with respect to any provision contained in Article VII shall be effective
unless consented to by the Administrative Agent. No notice to or demand on
the Company in any case shall entitle the Company to any other or further
notice or demand in similar or other circumstances.
SECTION 8.02. New Lenders. At any time when any Lender shall
have a Commitment, if no event has occurred and is continuing which
constitutes an Event of Default or which would constitute an Event of
Default but for the requirement that notice be given or time elapse or both,
the Company may notify the Administrative Agent and the Lenders that it
desires to add one or more additional lenders to the Lenders hereunder;
provided, however, that no such new lender will have a Commitment larger
than the largest Commitment of a Lender. Such notice shall identify each
such lender, the amount of its proposed Commitment and the proposed
effective date of its inclusion hereunder (which shall be the last day of
all then current Interest Periods if there are Base Rate Advances or
Eurodollar Advances then outstanding from the Lenders). Upon such proposed
date, such lender shall become a Lender hereunder for all purposes and to
the same effect as if set forth on the signature pages hereof, subject to
its execution where indicated below and delivery to the Administrative Agent
of at least one counterpart of this Agreement (which shall be deemed to
include all amendments thereto) and the execution and delivery by the
Administrative Agent and the Company of each such counterpart.
SECTION 8.03. Notices, Etc. All communications and notices
provided for hereunder, unless otherwise specified in this Agreement, shall
be in writing and, if to the Company, mailed or delivered to it, addressed
to it at Dial Tower, Phoenix, Arizona 85077, Attention of Treasurer's
Department, and if to any Lender, mailed or delivered to it, addressed to it
at its Domestic Lending Office as set forth on the signature pages hereof,
and, if to the Administrative Agent, mailed or delivered to it, addressed to
it c/o Citicorp USA, Inc., 725 South Figueroa Street, Los Angeles,
California 90017, Attention: Desmund Shirazi; or, as to each party, at such
other address as shall be designated by such party in a written notice to
each other party.
SECTION 8.04 Assignments, Participations etc.
(a) Any Lender may, with notice to the Administrative Agent and
the Company, assign to any other current Lender, or, with notice to the
Administrative Agent and with the prior written consent of the Company,
which consent shall not be unreasonably withheld, assign to any Eligible
Assignee (each an "Assignee") all or any part of the Advances or the
Commitments or any other rights or obligations of such Lender hereunder in a
minimum amount of $5,000,000; provided, however, that the amount of the
Advances and the Commitment of the assignor Lender being assigned may be in
an amount equal to such assignor Lender's entire Commitment and such
Lender's entire outstanding Advances provided, further, that the Company and
the Administrative Agent may continue to deal solely and directly with such
Lender in connection with the interests so assigned to an Assignee until (i)
written notice of such assignment, together with payment instructions,
addresses and related information with respect to the Assignee, shall have
been given to the Company and the Administrative Agent by such Lender and
the Assignee and (ii) such Lender and its Assignee shall have delivered to
the Company and the Administrative Agent an Assignment and Acceptance in the
form of Exhibit C ("Assignment and Acceptance"); and (iii) the processing
fees of $2,500 shall have been paid to the Administrative Agent. Any
assignment hereunder shall be of a constant, and not a varying, percentage
of all rights and obligations of the assignor under this Agreement.
Notwithstanding any of the preceding limitations on any Lender's ability to
assign any part of the Advances or the Commitments to any other Person, each
Lender may assign its rights (including, without limitation, rights to
payment) under this Agreement to any Federal Reserve Bank without notice to
or consent of, and without payment of any processing fee to, the Company or
the Administrative Agent. To facilitate any such pledge to a Federal
Reserve Bank, the Company will, upon its receipt of a written request from a
Lender stating that such Lender desires to pledge then outstanding Advances
to a Federal Reserve Bank, execute and deliver to such Lender a promissory
note substantially in the form of Exhibit F to evidence such Advances.
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assignor Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any
of this Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other instrument
or document furnished pursuant hereto; (ii) such assignor Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Company or the performance or observance by the
Company of any of its obligations under this Agreement or any instrument or
document furnished pursuant hereto; (iii) such Assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Section 4.01 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; (iv) such Assignee
will, independently and without reliance upon the Administrative Agent, any
Agent, any Co-Agent or such assignor Lender or any other Lender 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 Agreement; (v) such Assignee confirms that it is an Eligible
Assignee; (vi) such Assignee appoints and authorizes the Administrative
Agent, the Agents and the Co-Agents to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to
the Administrative Agent, the Agents and the Co-Agents by the terms hereof,
together with such powers as are reasonably incidental thereto; and
(vii) such Assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(c) From and after the date that the Administrative Agent
notifies the assignor Lender that it has received the Assignment and
Acceptance (which notice shall be promptly given by the Administrative
Agent), (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, shall have the rights and
obligations of a Lender under this Agreement and (ii) the assignor Lender
shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining
portion of the assignor Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).
(d) The Administrative Agent shall maintain at its address
referred to in Section 8.03 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the
names and addresses of the Lenders and the Commitment of, and principal
amount of the Advances owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Company, the Administrative
Agent and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Company or any Lender at
any reasonable time and from time to time upon reasonable prior notice.
Immediately upon each assignee's making its payment under the Assignment and
Acceptance, this Agreement shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and
the resulting adjustment of the Commitments arising therefrom. The
Commitment allocated to each Assignee shall reduce such Commitments of the
assignor Lender pro tanto.
(e) Any Lender may at any time sell to one or more banks or other
entities (a "Participant") participating interests in any Advances, the
Commitment of that Lender or any other interest of that Lender hereunder;
provided, however, that (i) the Lender's obligations under this Agreement
shall remain unchanged, (ii) the Lender shall remain solely responsible for
the performance of such obligations, (iii) the Company and the
Administrative Agent shall continue to deal solely and directly with the
Lender in connection with the Lender's rights and obligations under this
Agreement, and (iv) no Lender shall transfer or grant any participating
interest under which the Participant shall have rights to approve any
amendment to, or any consent or waiver with respect to this Agreement except
to the extent such amendment, consent or waiver would: (A) extend the
Termination Date; or (B) reduce the interest rate or the amount of principal
or fees applicable to Advances or the Commitments in which such participant
is participating. In the case of any such participation, the Participant
shall not have any rights under this Agreement and all amounts payable by
the Company hereunder shall be determined as if such Lender had not sold
such participation, except that if amounts outstanding under this Agreement
are due and unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall
be deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Lender
under this Agreement.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 8.04, disclose to the Assignee or participant or proposed assignee
or participant, any information relating to the Company and any Subsidiary
furnished to such Lender by or on behalf of the Company; provided that,
prior to any such disclosure, the Assignee or Participant or proposed
assignee or participant shall agree to preserve the confidentiality of any
confidential information relating to the Company or any Subsidiary received
by it from such Lender.
SECTION 8.05. Costs, Expenses and Taxes.
(a) The Company agrees to pay all out-of-pocket costs and
expenses of the Administrative Agent and each Agent in connection with the
preparation, execution and delivery of this Agreement and any amendment,
waiver or consent relating thereto (including the reasonable fees and out-
of-pocket expenses of O'Melveny & Myers and the allocated costs of internal
counsel) and out-of-pocket costs and expenses of the Administrative Agent,
if any, including reasonable legal fees in connection with the
administration thereof and out-of-pocket costs and expenses of the
Administrative Agent and the Lenders, if any, including reasonable legal
fees in connection with the enforcement thereof. In addition, the Company
shall pay any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of this Agreement and
the other documents to be delivered hereunder, and agrees to save the
Administrative Agent and each Lender harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes.
(b) Whether or not the transactions contemplated hereby shall be
consummated, the Company agrees to indemnify, pay and hold the
Administrative Agent, each Agent, each Lender, and the officers, directors,
employees and agents of the Administrative Agent, the Agents and the
Lenders, harmless from and against any and all claims, liabilities, losses,
damages, costs and expenses (whether or not any of the foregoing Persons is
a party to any litigation), including without limitation reasonable
attorneys' fees and costs and costs of investigation, with respect to any
acquisition or proposed acquisition or any other use or proposed use of
proceeds of the Advances (collectively, the "Indemnified Liabilities"),
provided that the Company shall have no obligation hereunder with respect to
Indemnified Liabilities arising from the gross negligence or willful
misconduct of any such Persons. If any claim is made, or any action, suit or
proceeding is brought against any Person indemnified pursuant to this
Section 8.05(b), the indemnified Person shall notify the Company of such
claim or of the commencement of such action, suit or proceeding, and the
Company will assume the defense of such action, suit or proceeding,
employing counsel selected by the Company and reasonably satisfactory to the
indemnified Person, and pay the fees and expenses of such counsel; provided,
however, that if counsel to the Administrative Agent or the Person seeking
indemnification hereunder shall reasonably determine that, due to conflicts
in the liabilities or defenses of the Company and the Administrative Agent,
the Agents and the Lenders, the Administrative Agent, the Agents or the
Lenders should retain their own counsel, the Administrative Agent, the
Agents and the Lenders shall have the right to retain their own counsel and
the reasonable fees and expenses of such counsel shall be for the account of
the Company. The obligations of the Company under this Section 8.05(b)
shall survive the termination of this Agreement and the discharge of the
Company's other obligations hereunder.
SECTION 8.06. Right of Set-off. Upon the occurrence and
during the continuance of any Event of Default, each Lender is hereby
authorized at any time and from time to time, without notice to the Company
(any such notice being expressly waived by the Company) and to the fullest
extent permitted by law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Company against any and all of the obligations of the Company
now or hereafter existing under this Agreement irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. Each Lender agrees promptly to notify
the Company and the Administrative Agent after any such set-off and
application made by such Lender, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The
rights of each Lender under this Section 8.06 are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
which such Lender may have.
SECTION 8.07. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP
applied on a consistent basis.
SECTION 8.08. Effectiveness of Action by, or Consent of,
Lenders. With respect to any provision of this Agreement under which action
may be taken or consent or approval given by holders of a specified
percentage of the Lenders, the action taken or consent or approval given by
such percentage shall be binding upon all of the Lenders to the same extent
and with the same effect as if each Lender had joined therein.
SECTION 8.09. Several Obligations. Subject to Section 8.10
hereof, the obligation of each Lender hereunder is several, and neither the
Administrative Agent nor any Lender shall be responsible for the obligation
or Commitment of any other Lender hereunder, nor will the failure of any
Lender to perform any of its obligations hereunder relieve the other Lenders
from the performance of their respective obligations hereunder. Nothing
contained in this Agreement and no action taken by the Lenders pursuant
hereto shall be deemed to constitute the Lenders a partnership, association,
joint venture or other entity.
SECTION 8.10. Binding Effect. This Agreement shall become
effective, upon satisfaction of the conditions set forth in Section 5.01,
when it shall have been executed by the Company and when the Administrative
Agent shall have been notified by each Lender that such Lender has executed
it and thereafter shall be binding upon and inure to the benefit of the
Company, the Administrative Agent hereunder and each of the Lenders and
their respective successors and assigns, except that the Company shall not
have the right to assign its rights hereunder or any interest herein without
the prior written consent of each of the Lenders.
SECTION 8.11 Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provisions in any other
jurisdiction.
SECTION 8.12 Descriptive Headings. The descriptive headings of
the several sections and subsections of this Agreement are inserted for
convenience only and shall not in any way affect the meaning or construction
of any provision of this Agreement.
SECTION 8.13. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York
without regard to its conflicts of laws principles.
SECTION 8.14. Execution in Counterparts. This Agreement may
be executed in any number of counterparts and by the several parties hereto
on separate counterparts, each of which when so executed shall be an
original, but all such separate counterparts shall together constitute but
one and the same instrument.
SECTION 8.15. Waiver of Trial by Jury. THE COMPANY, THE
LENDERS, THE CO-AGENTS, THE AGENTS AND THE ADMINISTRATIVE AGENT EACH HEREBY
AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may
be filed in any court and that relate to the subject matter of this
transaction, including without limitation contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. The
Company, the Lenders, the Co-Agents, the Agents and the Administrative Agent
each (i) acknowledges that this waiver is a material inducement for the
Company, the Lenders, the Co-Agents, the Agents and the Administrative Agent
to enter into a business relationship, that the Company, the Lenders, the
Co-Agents, the Agents and the Administrative Agent have already relied on
this waiver in entering into this Agreement or accepting the benefits
thereof, as the case may be, and that each will continue to rely on this
waiver in their related future dealings and (ii) further warrants and
represents that it has reviewed this waiver with its legal counsel, and that
it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER MAY NOT BE MODIFIED ORALLY AND
MAY ONLY BE MODIFIED IN WRITING EXPRESSLY REFERRING TO THIS SECTION 8.15,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT EXCEPT TO THE EXTENT ANY SUCH
AMENDMENT, RENEWAL, SUPPLEMENT OR MODIFICATION EXPRESSLY PROVIDES OTHERWISE.
In the event of litigation, this Agreement may be filed as a written consent
to a trial by the court.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized as of
the date first above written.
GREYHOUND FINANCIAL
CORPORATION
By__________________________
Title_______________________
By__________________________
Title_______________________
Commitments
$61,700,000 CITIBANK, N.A. (Individually
and as an Agent and
Administrative Agent)
By ___________________________
Title__________________________
399 Park Avenue
New York, New York 10043
$61,650,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By ___________________________
Title __________________________
555 South Flower Street,
Credit Products #5618
Los Angeles, California 90071
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION (as an
Agent)
By ___________________________
Title __________________________
Bank of America
Global Agency #5596
1455 Market Street
San Francisco, California 94103
$61,650,000 CHEMICAL BANK (Individually
and as an Agent)
By ___________________________
Title _________________________
270 Park Avenue
New York, New York 10017
$50,000,000 CONTINENTAL BANK N.A. (Individually
and as a Co-Agent)
By ___________________________
Title __________________________
231 South LaSalle Street
Chicago, Illinois 60693
$50,000,000 BANK OF MONTREAL (Individually and
as a Co-Agent)
By ___________________________
Title __________________________
115 South LaSalle Street, 11 West
Chicago, Illinois 60603
$35,000,000 THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By ___________________________
Title __________________________
One Chase Manhattan Plaza
New York, New York 10081
$35,000,000 FIRST INTERSTATE BANK
OF ARIZONA
By ___________________________
Title __________________________
First Interstate Bank Plaza
100 West Washington
Phoenix, Arizona 85038
$35,000,000 NATIONAL WESTMINSTER BANK USA
By ___________________________
Title __________________________
175 Water Street
New York, New York 10038
$35,000,000 UNION BANK OF SWITZERLAND
LOS ANGELES BRANCH
By____________________________
Title __________________________
By____________________________
Title __________________________
444 South Flower Street
Los Angeles, California 90071
$35,000,000 WESTDEUTSCHE LANDESBANK
GIROZENTRALE-
NEW YORK AND CAYMAN ISLANDS BRANCHES
By____________________________
Title __________________________
By____________________________
Title __________________________
633 West Fifth Street, Suite 6750
Los Angeles, California 90071
$25,000,000 CREDIT LYONNAIS
SAN FRANCISCO BRANCH
By ___________________________
Title __________________________
4 Embarcadero Center
Suite 3470
San Francisco, California 94111
$25,000,000 THE INDUSTRIAL BANK OF JAPAN,
LIMITED, LOS ANGELES AGENCY
By ___________________________
Title __________________________
350 South Grand Avenue
Suite 1500
Los Angeles, California 90071
$20,000,000 BANK ONE, ARIZONA, N.A.
By ___________________________
Title __________________________
241 North Central
U.S. Corp. Banking, A-714
Phoenix, Arizona 85004
$20,000,000 DRESDNER BANK AG LOS ANGELES
AGENCY
By ___________________________
Title __________________________
By ___________________________
Title __________________________
725 South Figueroa Street
Suite 3950
Los Angeles, California 90017
$20,000,000 THE MITSUBISHI TRUST AND BANKING
CORPORATION, acting through its
LOS ANGELES AGENCY
By ___________________________
Title __________________________
801 South Figueroa Street
Suite 2400
Los Angeles, California 90017
$20,000,000 SOCIETE GENERALE
By ___________________________
Title __________________________
2029 Century Park East, Suite 2900
Los Angeles, California 90067
$15,000,000 CREDIT SUISSE
By ___________________________
Title __________________________
By ___________________________
Title __________________________
800 Wilshire Boulevard, 8th Floor
Los Angeles, California 90017
$15,000,000 THE BANK OF NOVA SCOTIA
By ___________________________
Title __________________________
101 California Street
San Francisco, California 94111
$10,000,000 UNION BANK
By ___________________________
Title __________________________
350 California Street, 11th Floor
San Francisco, California 94104
$10,000,000 BANK OF HAWAII
By ___________________________
Title __________________________
130 Merchant Street, 20th Floor
Honolulu, Hawaii 96813
$10,000,000 BANK OF AMERICA ARIZONA
By ___________________________
Title __________________________
101 North First Avenue
Phoenix, Arizona 85003
$10,000,000 BANK HAPOALIM, B.M.,
LOS ANGELES BRANCH
By____________________________
Title __________________________
By____________________________
Title __________________________
6222 Wilshire Blvd.
Los Angeles, CA 90048
$10,000,000 BANQUE NATIONALE DE PARIS
By____________________________
Title __________________________
By____________________________
Title __________________________
725 South Figueroa Street
Suite 2090
Los Angeles, California 90017
$10,000,000 THE LONG-TERM CREDIT BANK OF JAPAN,
LTD.
LOS ANGELES AGENCY
By____________________________
Title __________________________
By____________________________
Title __________________________
444 South Flower Street, Suite 3700
Los Angeles, California 90071
$10,000,000 ISTITUTO BANCARIO SAN PAOLO DI
TORINO S.P.A.
By____________________________
Title __________________________
By____________________________
Title __________________________
444 South Flower Street, 45th Floor
Los Angeles, California 90071
$10,000,000 CAISSE NATIONALE DE CREDIT AGRICOLE
By____________________________
Title __________________________
55 East Monroe Street, Suite 4700
Chicago, Illinois 60603
____________
$700,000,000 Total Commitments
<PAGE>
<TABLE>
SCHEDULE 1
GREYHOUND FINANCIAL CORPORATION
$700,000,000
CREDIT AGREEMENT
<CAPTION>
Domestic Lending Eurodollar
Bank Office Lending Office
<S> <C> <C>
Citibank, N.A. Citibank, N.A. Citibank, N.A.
399 Park Avenue 399 Park Avenue
New York, NY 10043 New York, NY 10043
Telex: 691-299 Telex: 691-299
Telecopy 212/793-5300 Telecopy 212/793-5300
Bank of America National Bank of America National Bank of America National
Trust and Savings Association Trust and Savings Association Trust and Savings Association
Global Payment Operations #5693 Global Payment Operations #5962
1850 Gateway Blvd. 1850 Gateway Blvd.
Concord, CA 94520 Concord, CA 94520
Telex 34346 Telex 34346
Telecopy 510/675-7532 Telecopy 510/675-7532
Attn: Barbara Garibaldi Attn: Barbara Garibaldi
Chemical Bank Chemical Bank Chemical Bank
270 Park Avenue 270 Park Avenue
New York, NY 10017 New, NY 10017
Telex 232337 Telex 232337
Telecopy 212/818-1456 Telecopy 212/818-1456
Bank of Montreal Bank of Montreal Bank of Montreal
115 South LaSalle Street, 11 West 115 South LaSalle Street, 11
West
Chicago, Illinois 60603 Chicago, Illinois 60603
Telex None Telex None
Telecopy 312/750-3702 Telecopy 312/750-3702
Continental Bank N.A. Continental Bank N.A. Continental Bank N.A.
231 S. LaSalle St. 231 S. LaSalle St.
Chicago, IL 60697 Chicago, IL 60697
Telex 25-3412 Telex 25-3412
Telecopy 312/765-2080 Telecopy 312/765-2080
The Chase Manhattan Bank The Chase Manhattan Bank The Chase Manhattan Bank
(National Association) 1 Chase Manhattan Plaza 1 Chase Manhattan Plaza
5th Floor 5th Floor
New York, NY 10081 New York, NY 10081
Telex 62910 Telex 62910
Telecopy 212/552-1999 Telecopy 212/552-1999
First Interstate Bank of First Interstate Bank of First Interstate Bank of
Arizona, N.A. Arizona, N.A. Arizona, N.A.
P.O. Box 29742 P.O. Box 29742
Phoenix, AZ 85038-9742 Phoenix, AZ 85038-9742
Telex 187-103 Telex 187-103
Telecopy 602/229-4409 Telecopy 602/229-4409
National Westminster Bank USA National Westminster Bank USA National Westminster Bank USA
175 Water Street 175 Water Street
New York, New York 10038 New York, New York 10038
Telex 232-369NBNA-UR Telex 232-369NBNA-UR
Telecopy 212/602-2590 Telecopy 212/602-2590
Union Bank of Switzerland Union Bank of Switzerland Union Bank of Switzerland
Los Angeles Branch Los Angeles Branch Los Angeles Branch
444 South Flower Street 444 South Flower Street
Los Angeles, California 90017 Los Angeles, California 90017
Telex 6831878 Telex 6831878
Telecopy 213/489-0637 Telecopy 213/489-0637
Westdeutsche Landesbank Westdeutsche Landesbank Westdeutsche Landesbank
Girozentrale Girozentrale Girozentrale
1211 Avenue of the Americas 1211 Avenue of the Americas
23rd Floor 23rd Floor
New York, New York 10036 New York, New York 10036
Telex MCI 666668 or ITT 420736 Telex MCI 666668 or ITT 420736
Telecopy 212/852-6300 Telecopy 212/852-6300
Credit Lyonnais, Credit Lyonnais, Credit Lyonnais,
San Francisco Branch San Francisco Branch San Francisco Branch
4 Embarcadero Center 4 Embarcadero Center
Suite 3470 Suite 3470
San Francisco, CA San Francisco, CA
94111 94111
Telex 6771535 Telex 6771535
Telecopy 415/956-7008 Telecopy 415/956-7008
The Industrial Bank of Japan, The Industrial Bank of Japan, The Industrial Bank of Japan,
Limited, Los Angeles Agency Limited, Los Angeles Agency Limited, Los Angeles Agency
350 South Grand Avenue 350 South Grand Avenue
Suite 1500 Suite 1500
Los Angeles, California 90071 Los Angeles, California 90071
Telex 67356 Telex 67356
Telecopy 213/688-7486 Telecopy 213/688-7486
Bank One, Arizona, N.A. Bank One, Arizona, N.A. Bank One, Arizona, N.A.
241 North Central 241 North Central
U.S. Corp. Bkng., A-714 U.S. Corp. Bkng., A-714
Phoenix, Arizona 85004 Phoenix, Arizona 85004
Telex 667434 Telex 667434
Telecopy 602/221-2632 Telecopy 602/221-2632
Dresdner Bank AG Dresdner Bank AG Dresdner Bank AG
Los Angeles Agency Los Angeles Agency Los Angeles Agency
75 Wall Street 75 Wall Street
New York, New York 10005 New York, New York 10005
Telex 4720286 Telex 4720286
Telecopy 212/574-0130 Telecopy 212/574-0130
The Mitsubishi Trust and The Mitsubishi Trust and The Mitsubishi Trust and
Banking Corporation, Banking Corporation, Banking Corporation,
Los Angeles Agency Los Angeles Agency Los Angeles Agency
801 South Figueroa Street 801 South Figueroa Street
Suite 2400 Suite 2400
Los Angeles, California 90017 Los Angeles, California 90017
Telex 3750342 Telex 3750342
Telecopy 213/629-2571 Telecopy 213/629-2571
Societe Generale Societe Generale Societe Generale
2029 Century Park East 2029 Century Park East
Suite 2900 Suite 2900
Los Angeles, California 90067 Los Angeles, California 90067
Telex 188273 Telex 188273
Telecopy 310/203-0539 Telecopy 310/203-0539
The Bank of Nova Scotia The Bank of Nova Scotia The Bank of Nova Scotia
101 California Street 101 California Street
San Francisco, California San Francisco, California
94111 94111
Telex 00340602 Telex 00340602
Telecopy 415/397-0791 Telecopy 415/397-0791
Credit Suisse Credit Suisse Credit Suisse
800 Wilshire Blvd. 800 Wilshire Blvd.
8th Floor 8th Floor
Los Angeles, California Los Angeles, California
90017 90017
Telex 67227 Telex 67227
Telecopy 213/955-8245 Telecopy 213/955-8245
Union Bank Union Bank Union Bank
350 California St. 350 California St.
11th Floor 11th Floor
San Francisco, California San Francisco, California
94104 94104
Telex 188316 Telex 188316
Telecopy 415/705-7037 Telecopy 415/705-7037
Bank of Hawaii Bank of Hawaii Bank of Hawaii
130 Merchant Street 130 Merchant Street
20th Floor 20th Floor
Honolulu, Hawaii 96813 Honolulu, Hawaii 96813
Telex None Telex None
Telecopy 808/533-4898 Telecopy 808/533-4898
Bank Hapoalim B.M., Bank Hapoalim B.M., Bank Hapoalim B.M.,
Los Angeles Branch Los Angeles Branch Los Angeles Branch
6222 Wilshire Blvd. 6222 Wilshire Blvd.
Los Angeles, CA 90048 Los Angeles, CA 90048
Telex 188610 Telex 188610
Telecopy 213/937-1439 Telecopy 213/937-1439
Banque Nationale Banque Nationale Banque Nationale Paris
de Paris de Paris de Paris
180 Montgomery Street 180 Montgomery Street
San Francisco, California San Francisco, California
94104 94104
Telex 9103722007 Telex 9103722007
Telecopy 415/989-9041 Telecopy 415/989-9041
Bank of America Arizona Bank of America Arizona Bank of America Arizona
101 North First Avenue 101 North First Avenue
Phoenix, Arizona 85003 Phoenix, Arizona 85003
Telex None Telex None
Telecopy 602/262-2323 Telecopy 602/262-2323
The Long-Term Credit Bank The Long-Term Credit Bank The Long-Term Credit Bank
of Japan, Limited, Los Angeles of Japan, Limited, Los Angeles of Japan, Limited, Los Angeles
Agency Agency Agency
444 South Flower Street 444 South Flower Street
Suite 3700 Suite 3700
Los Angeles, California 90071 Los Angeles, California 90071
Telex 673558 Telex 672558
Telecopy 213/626-1067 Telecopy 213/626-1067
Istituto Bancario San Paolo Istituto Bancario San Paolo Istituto Bancario San Paolo
di Torino S.p.A. di Torino S.p.A. di Torino S.p.A.
444 South Flower Street, 45th Floor 444 South Flower Street, 45th
Floor
Los Angeles, California 90071 Los Angeles, California 90071
Telex 4720338 Telex 4720338
Telecopy 213/622/2514 Telecopy 213/622/2514
Caisse Nationale de Caisse Nationale de Caisse Nationale de
Credit Agricole Credit Agricole Credit Agricole
55 East Monroe 55 East Monroe
Suite 4700 Suite 4700
Chicago, Illinois 60603 Chicago, Illinois 60603
Telex 190063 Telex 190063
Telecopy 312/372-3724 Telecopy 312/372-4421
</TABLE>
<PAGE>
<TABLE>
SCHEDULE 2
EXPOSURES
Greyhound Financial Corporation
Transactions excluded from Exposure Test under Credit Agreement
(000's Omitted)
<CAPTION>
Customer Name Date Carrying
& Location Commencement Maturity Type of Property Amount
<S> <C> <C> <C>
D.A.T. Joint Venture 09/1991 11/1994 2: B727-221 aircraft $55,271
New York, NY 6: JT8D-17R engines
1: DC9-30
2: JT8D engines
2: B727-225 aircraft
5: JT8D-15A engines
1: JT8D-15 engine
1: JT8D-217C engine
& related equipment
Westinghouse 12/1985 12/2010 equity portion of $48,175
Pittsburgh, PA a leveraged lease:
13 office and light
industrial buildings
totalling
2,408,628 sq. ft.
A.I. Leasing II 04/1985 07/2003 equity portion of $44,306
(Airbus) France a leveraged lease:
3 Airbus A300B4
w/ General Electric
CF6-50C2 engines
Note: Increases in the Carrying Value of any leveraged lease transactions of the Company and any
subsidiary which are a result of accounting treatment shall not be used for the purposes of
calculating increases of whatever kind or nature in Carrying Value of such leveraged lease
transaction.
</TABLE>
<PAGE>
EXHIBIT A
NOTICE OF BORROWING
Citibank, N.A., as Administrative Agent [Date]
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue
New York, New York 10043
Attention: National Corporate
Division Administration
with a copy to:
Citicorp USA, Inc.
725 South Figueroa Street
Los Angeles, California 90071
Attention: Credit Department
Ladies and Gentlemen:
The undersigned, Greyhound Financial Corporation, refers to the
Fifth Amendment and Restatement, dated as of May 17, 1993, of the Credit
Agreement dated as of May 31, 1976, as theretofore amended (the "Credit
Agreement"), the terms defined therein being used herein as therein defined,
among Greyhound Financial Corporation, Lenders parties thereto, the Co-
Agents parties thereto, Bank of America National Trust and Savings
Association, Chemical Bank, and Citibank, N.A., as Agents, and Citibank,
N.A., as Administrative Agent, and hereby gives you notice pursuant to
Section 2.04 of the Credit Agreement that the undersigned hereby requests a
Borrowing under the Credit Agreement, and in that connection sets forth
below the information relating to such Borrowing (the "Proposed Borrowing")
as required by Section 2.04(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is ________________
19___.
(ii) The Type of Advances comprising the Proposed Borrowing is
[Base Rate Advances][Eurodollar Advances].
(iii) The aggregate amount of the Proposed Borrowing is
$___________.
(iv) The Interest Period for each Advance made as part of the
Proposed Borrowing is ____ [months] [days].
In accordance with Section[s] 5.02 [and 5.03] of the Credit
Agreement, the undersigned hereby certifies, on behalf of the Company, that
as of the date hereof and the date of the Advance hereby requested:
1. The representations and warranties contained in Section 3.01 of
the Credit Agreement (excluding those contained in paragraph[s (e) and]
(f) thereof) are true and accurate as though made on and as of such
dates;
2. No circumstances exist that in the Company's reasonable opinion
would materially impair the Company's ability to repay all outstanding
Advances; and
3. No event has occurred and is continuing or would result from such
Borrowing which constitutes an Event of Default under the Credit
Agreement or which would constitute such an Event of Default but for
the requirement that notice be given or time elapse or both.
Very truly yours,
Greyhound Financial Corporation
By_____________________________
Title:
<PAGE>
EXHIBIT B
SECTION 4.01(a) CERTIFICATE
Schedule of Compliance with the Fifth Amendment
and Restatement, dated as of May 17, 1993, of
the Credit Agreement, dated May 31, 1976, as
theretofore amended
Certificate as of _________, 19__
The undersigned, ________________________ of Greyhound Financial
Corporation, pursuant to the provisions of the Fifth Amendment and
Restatement, dated as of May 17, 1993, of the Credit Agreement, dated as of
May 31, 1976, as theretofore amended (the "Credit Agreement"), among the
aforesaid corporation (the "Company"), the Lenders named therein, the Co-
Agents named therein, Bank of America National Trust and Savings
Association, Chemical Bank and Citibank, N.A., as Agents, and Citibank,
N.A., as Administrative Agent, hereby certifies that as of the date first
written above (defined terms in the Credit Agreement being used herein with
the same meanings as in the Credit Agreement), the following computations
were true and correct:
1. Leverage Test, Section 4.02(a)
a. total assets . . . . . . . . . . . . . . . . $_________
b. deferred taxes . . . . . . . . . . . . . . . $_________
c. minority interests . . . . . . . . . . . . . $_________
d. preferred stock equity . . . . . . . . . . . $_________
e. Stockholders' Equity:
(i) total assets (Line 1a) . . . $__________
(ii) liabilities . . . . . . . . $__________
(iii) preferred stock (Line 1d). . $__________
(iv) minority interests (Line 1c) $__________
(v) sum of (ii) plus (iii) plus
(iv) . . . . . . . . . . . . $__________
excess, if any, of (i) over (v) . . . . . . . $_________
f. lesser of "due to clients" or "due from customers"
g. guaranties (to the extent
not reflected on balance sheet or
included above as liabilities) . . . . . . . $_________
h. intangible assets in excess of
$30,000,000 . . . . . . . . . . . . . . . . . $_________
i. Line 1a minus Line 1b minus
Line 1c minus Line 1d minus Line 1e
minus Line 1f plus Line 1g . . . . . . . . . . . . . $__________
j. Line 1d plus Line 1e minus
Line 1h . . . . . . . . . . . . . . . . . . . . . . . $__________
k. leverage ratio: ratio of Line 1i to Line 1j . . . . . ____:1.00
l. maximum leverage ratio permitted for period: . . . . . ____:1.00
(initially 6.50:1.00; after 3-31-94, 7.00:1.00)
2. Secured Indebtedness Test, Section 4.02(b)
a. Secured Indebtedness . . . . . . . . . . . . $_________
b. limited recourse Secured
Indebtedness . . . . . . . . . . . . . . . . $_________
c. Line 2a minus Line 2b (*) . . . . . . . . . . . . . . $_________
d. maximum permitted amount . . . . . . . . . . . . . . $15,000,000
3. Interest Coverage, Section 4.02(c)
a. Consolidated Net Income (excluding
extraordinary items) . . . . . . . . . . . . $_________
b. taxes . . . . . . . . . . . . . . . . . . . . $_________
c. interest expense . . . . . . . . . . . . . . $_________
d. Line 3a plus Line 3b plus
Line 3c . . . . . . . . . . . . . . . . . . . $_________
e. ratio of Line 3d to Line 3c . . . . . . . . . . . . . . ____:1.00
f. minimum permitted ratio . . . . . . . . . . . . . . . . 1.25:1.00
4. Exposure Test, Section 4.02(d)
a. Tangible Net Worth . . . . . . . . . . . . . $_________
b. greatest Exposure (excluding
Exposure relating to transactions
listed on Schedule 2 to
the Credit Agreement). . . . . . . . . . . . . . . . . $_________
c. maximum Exposure permitted
(15% of Line 4a) . . . . . . . . . . . . . . . . . . . $_________
5. Commercial Paper Covenant Test,
Section 4.02(e)
a. unused but available portion
of Commitments . . . . . . . . . . . . . . . $_________
b. other unused but available
commitments or lines of
credit . . . . . . . . . . . . . . . . . . . $_________
c. Commercial Paper outstanding . . . . . . . . . . . . . $_________
d. maximum amount of Commercial
Paper permitted to be outstanding
(Line 5a plus Line 5b) . . . . . . . . . . . . . . . . $_________
6. Dividend Test, Section 4.02(g)
a. Consolidated Net Income
subsequent to December 31, 1991 . . . . . . . $_________
b. Proceeds from stock or, upon
conversion, convertible debt
issues subsequent to December 31,
1991 . . . . . . . . . . . . . . . . . . . . $_________
c. Line 6a plus Line 6b . . . . . . . . . . . . $_________
d. cash dividends paid subsequent
to December 31, 1991 . . . . . . . . . . . . . . . . . $_________
e. maximum amount of dividends
permitted subsequent to
December 31, 1991 (50% of Line 6c) . . . . . . . . . . $_________
7. Stockholders' Equity Test, Section 4.02(h)
a. cumulative net income for fiscal
quarters ending after January 1, 1993
(excluding any net loss in
any such quarter) . . . . . . . . . . . . . . $_________
b. 50% of Line 7a . . . . . . . . . . . . . . . $_________
c. 50% of cumulative proceeds from issuances
of capital stock of Company or
any Subsidiary after December 31,
1992 . . . . . . . . . . . . . . . . . . . . $_________
d. Stockholders' Equity (Line 1e) . . . . . . . . . . . . $_________
e. minimum Stockholders' Equity
permitted ($275,000,000 plus
Line 7b plus Line 7c) . . . . . . . . . . . . . . . . . $_________
8. Ratings
a. S&P Long-term Debt rating as of
this report . . . . . . . . . . . . . . . . . . . . . . __________
b. Moody's Long-term Debt rating as
of this report . . . . . . . . . . . . . . . . . . . . __________
c. S&P Commercial Paper rating as
of this report . . . . . . . . . . . . . . . . . . . . __________
d. Moody's Commercial Paper rating
as of this report . . . . . . . . . . . . . . . . . . . __________
(*) If negative, will be zero.
and hereby further certify that no event has occurred or is continuing on
the date hereof which constitutes an Event of Default under the Credit
Agreement, or which would constitute such an Event of Default but for the
requirement that notice be given, or time elapse, or both.
IN WITNESS WHEREOF, I have hereunto set my hand as of the date
first above written.
__________________________________
[Name]
__________________________________
of Greyhound Financial Corporation
<PAGE>
EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
Dated as of _______________, 19___
Reference is made to that certain Fifth Amendment and Restatement
Dated as of May 17, 1993 of the Credit Agreement Dated as of May 31, 1976
(the "Credit Agreement") among Greyhound Financial Corporation (the
"Company"), the Lenders parties thereto, the Co-Agents parties thereto, Bank
of America National Trust and Savings Association, Chemical Bank and
Citibank, N.A., as Agents, and Citibank, N.A., as Administrative Agent (the
"Administrative Agent"). Terms defined in the Credit Agreement are used
herein with same meaning.
[________________] (the "Assignor") and [______________] (the
"Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, without
recourse, that interest in and to all of the Assignor's rights and
obligations under the Credit Agreement as of the date hereof which
represents the percentage interest specified in Section 1 of Schedule 1 of
the outstanding rights and obligations of all Lenders under the Credit
Agreement, including, without limitation, such interest in the Assignor's
Commitment and in all outstanding Advances (if any) owing to the Assignor.
After giving effect to such sale and assignment, the Assignee's Commitment
and the aggregate principal amount of Advances outstanding on the date
hereof and owing to the Assignee will be as set forth in Section 2 of
Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty (except as provided in clause (i) above) and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or any
other instrument or document furnished pursuant thereto or with respect to
the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Company, any guarantor or any other person or the performance or observance
by the Company, any guarantor or any other party of any of its obligations
under the Credit Agreement or any other instrument or document furnished
pursuant thereto.
3. (a) The Assignee (i) confirms and agrees that it has
received a copy of the Credit Agreement, any amendments or waivers thereto
and any other documents furnished pursuant thereto, which in each case have
been requested by it, together with copies of any financial statements
requested by it, and that it has, independently and without reliance on the
Assignor, any Co-Agent, any Agent, the Administrative Agent or any other
Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Assignment and Acceptance and agrees that it shall have no recourse against
the Assignor with respect to any matters relating thereto; (ii) agrees that
it will, independently and without reliance upon the Assignor, any Co-Agent,
any Agent, any Administrative Agent or any other Lender 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 and any other documents or instruments furnished pursuant
thereto; (iii) appoints and authorizes each of the Co-Agents, Agents and
Administrative Agent to take such action as agent on its behalf and to
exercise such powers under the Credit Agreement as are delegated to Co-
Agents, Agents or Administrative Agent, respectively, by the terms thereof,
together with such powers as are reasonably incidental thereto; (iv)
confirms that it is an Eligible Assignee; (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender; [and] (vi)
specifies as its Domestic Lending Office and Eurodollar Lending Office and
address for notices the respective offices previously notified to the
Administrative Agent pursuant to the Credit Agreement[; and (vii) attaches
the forms prescribed by the Internal Revenue Service of the United States
certifying as to the Assignee's status for the purposes of determining
exemption from United States withholding taxes with respect to all payments
to be made to the Assignee under the Credit Agreement or such other
documents as are necessary to indicate that all such payments are subject to
withholding taxes at a rate reduced by any applicable tax treaty].
(b) If the Assignee is a person subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), the Assignee
represents and warrants that the execution, delivery and performance of this
Assignment and Acceptance, and the purchase of the interest being assigned
to it hereby, will not involve any prohibited transaction within the meaning
of Section 406 of ERISA or Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code"), other than a prohibited transaction which is
covered by a currently effective class exemption granted by the U.S.
Department of Labor pursuant to Section 408(a) of ERISA and Section
4975(C)(2) of the Code.
4. Following the execution of this Assignment and Acceptance by
the Assignor and the Assignee, the Assignor will deliver this Assignment and
Acceptance to the Administrative Agent for acceptance and recording. The
effective date for this Assignment and Acceptance shall be the date of
acceptance hereof by the Administrative Agent unless otherwise specified on
Schedule 1 hereto (the "Effective Date").
5. Upon such acceptance and recording by the Administrative
Agent, as of the Effective Date, (i) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in the Credit Agreement and in
this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and (ii) the Assignor shall, to the extent provided in the Credit
Agreement and in this Assignment and Acceptance, relinquish its rights and
be released from its obligations under the Credit Agreement and the other
instruments and documents furnished pursuant thereto. The Assignee hereby
acknowledges that the other parties to the Credit Agreement are intended
third-party beneficiaries of this Assignment and Acceptance insofar as,
after giving effect to this Assignment and Acceptance, the Assignee shall
have the obligations of a Lender thereunder.
6. Upon such acceptance and recording by the Administrative
Agent, from and after the Effective Date, the Administrative Agent shall
make all payments under the Credit Agreement in respect of the interest
assigned hereby (including, without limitation, all payments of principal,
interest and fees with respect thereto) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustments in payments under the Credit
Agreement for periods prior to the Effective Date directly between
themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number
of counterparts and by different parties on separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Schedule 1 hereto.
SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE
Dated as of ____________, 19___
Section 1
Percentage interest ______%
(as percentage of total
Credit Agreement Advances/
Commitments of all Lenders)
Section 2
Assignee's Commitment $_______________
Aggregate Outstanding Principal
Amount of Advances Owing to Assignee $_______________
Section 3
Effective Date: __________, 19___
[_________________],
as Assignor
By______________________
Title:________________
[_________________],
as Assignee
By______________________
Title:________________
Accepted this _______ day of
_____________, 19___
CITIBANK, N.A., as Administrative Agent
By___________________________
Title:_____________________
<PAGE>
EXHIBIT D
[FORM OF OPINION OF COMPANY'S COUNSEL]
[Letterhead of W.J. Hallinan, Esq.]
[Effective Date]
Citibank, N.A., as
Administrative Agent
399 Park Avenue
New York, New York 10022
and
The Lenders, Co-Agents
and Agents Listed
on Schedule I Hereto
Re: Greyhound Financial Corporation Fifth Amendment and
Restatement dated as of May 18, 1993 of Credit Agreement
dated as of May 31, 1976
Dear Ladies and Gentlemen:
As Vice President and counsel to Greyhound Financial Corporation,
a Delaware corporation (the "Company"), I am familiar with the Fifth
Amendment and Restatement dated as of May 18, 1993 of Credit Agreement dated
May 31, 1976, among the Company, the Lenders named therein, the Co-Agents
named therein, Bank of America National Trust and Savings Association,
Chemical Bank and Citibank, N.A., as Agents, and Citibank, N.A., as
Administrative Agent (the "Credit Agreement"). All terms used herein that
are defined in the Credit Agreement have the respective meanings specified
in the Credit Agreement. This letter is being delivered to you in
satisfaction of the condition set forth in Section 5.01(b) of the Credit
Agreement and with the understanding that you are entering into the Credit
Agreement in reliance on the opinions expressed herein.
In this connection, I have examined such certificates of public
officials, certificates of officers of the Company and the Subsidiaries and
copies certified to my satisfaction of corporate documents and records of
the Company and the Subsidiaries and of other papers, and have made such
other investigations, as I have deemed relevant and necessary as a basis for
my opinion hereinafter set forth. I have relied upon such certificates of
public officials and of officers of the Company and the Subsidiaries with
respect to the accuracy of material factual matters contained therein which
were not independently established.
Based on the foregoing and subject to the qualifications, limitations
and assumptions contained herein, it is my opinion that:
1. The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware and has
qualified to do business as a foreign corporation and is in good standing
under the laws of the State of Arizona. The Company has all requisite
corporate power and corporate authority to own and operate its properties
and to carry on its business as now conducted and as proposed to be
conducted and to execute, deliver and perform the Credit Agreement.
2. The execution, delivery and performance of the Credit Agreement
have been duly authorized by all requisite corporate action on the part of
the Company. The Credit Agreement has be duly executed and delivered by
authorized officers of the Company and constitutes the legally valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as enforceability may be limited by (a)
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and (b) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
3. The Company is not an "investment company" or a company
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
4. The extension, arranging and obtaining of the credit
represented by the Credit Agreement do not result in any violation of
Regulation G, T, U and X of the Board of Governors of the Federal Reserve
System.
5. None of the execution and delivery of the Credit Agreement, the
making of any Advances thereunder or compliance with the provisions thereof
(A) conflicts with, or results in a breach or violation of the certificate
of incorporation or bylaws of the Company, (B) results in a material breach
or violation of, or constitutes a material default under, the terms,
conditions or provisions of (i) any material loan agreement or other
contract to which the Company or any Subsidiary is a party, (ii) any order,
writ judgment or decree that the Company or any Subsidiary is a party to or
by which any of the Company's or any Subsidiary's assets or properties are
bound and which is material to the Company and its Subsidiaries, taken as a
whole, or (iii) any present United States federal, Delaware corporate or
Arizona statute, rule or regulation, known to me to be applicable to or
binding on the Company and of a type commonly applicable to transactions of
the type contemplated by the Credit Agreement or (C) results in the creation
of any Lien upon any of the assets or properties of the Company or any
Subsidiary under any agreement or contract referred to in clause (B)(i)
above.
6. No governmental consents, approvals, registrations,
declarations or filings are required to be obtained or made by the Company
in connection with the execution and delivery of the Credit Agreement.
7. To the best of my knowledge, there are no actions, suits or
proceedings (administrative, judicial or otherwise) pending or threatened
against the Company or any Subsidiary which have a significant likelihood of
materially and adversely affecting (a) the business, operations, prospects
or condition (financial or otherwise) of the Company and its Subsidiaries,
taken as a whole, or (b) the ability of the Company to perform its
obligations under the Credit Agreement, except as disclosed on Schedule II
hereto.
I am admitted to the bar in the State of Arizona, and I express no
opinion as to the laws of any other jurisdiction except the General
Corporation Law of the State of Delaware and the federal laws of the United
States of America. While the Credit Agreement is stated to be governed by
the laws of the State of New York, I have, with your permission, expressed
the opinions herein as if the Credit Agreement were governed by the laws of
the State of Arizona. With respect to such laws, my opinions are what the
law is at the date hereof, and I assume no obligation to supplement this
opinion due to any change in the law, legislative action, judicial decision
or otherwise.
To the extent that the obligations of the Company may be dependent
upon such matters, I have assumed for the purposes of this opinion that each
Person who is a party to the Credit Agreement (other than the Company) is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation; that the Credit Agreement has been duly
authorized, executed and delivered by each such Person (other than the
Company) and constitutes the legally valid and binding obligation of each
such Person (other than the Company), enforceable in accordance with its
terms; the genuineness of all signatures and the legal capacity of each
natural person executing the Credit Agreement (other than any such person
executing the Credit Agreement on behalf of the Company); the authenticity
and completeness of documents submitted as originals, and the conformity of
documents submitted as copies; that the Credit Agreement accurately
describes and contains the agreement and mutual understandings of the
parties, and that there are no verbal or written statements or agreements
that modify, amend or vary, or purport to modify, amend or vary, any of the
terms of the Credit Agreement; that you will receive no interest, charges,
fees or other benefits or compensation in the nature of interest in
connection with the Credit Agreement or its related transactions other than
those that the Company has agreed in writing to pay; that all parties to the
Credit Agreement will enforce their respective rights thereunder in
circumstances and in a manner which are commercially reasonable and in
accordance with applicable law; and that each Person who is a party to the
Credit Agreement (other than the Company) has the requisite corporate or
other organizational power and authority to perform is obligations under the
Credit Agreement.
This opinion is being delivered upon the express instructions of
the Company to Citibank, N.A., as Administrative Agent, Citibank, N.A., Bank
of America National Trust and Savings Association, and Chemical Bank, as
Agents, the Co-Agents and the Lenders under the Credit Agreement and is
solely for their benefit in connection with the transactions contemplated
thereby. This opinion may not be relied upon by, filed with, disclosed to,
quoted in any manner to, referenced in any written report, financial
statement or other document to, or delivered to any other person, firm or
corporation for any purpose, without my prior written consent, except that
the Administrative Agent, each Agents, each Co-Agent and each Lender may use
this opinion (i) in connection with a review of the Credit agreement and
transactions related thereto by a regulatory agency having supervisory
authority over any such Person for the purpose of confirming the existence
of this opinion, (ii) in connection with the assertion of a defense as to
which this opinion is relevant and necessary, (iii) in response to a court
order or (iv) in connection with any assignment of any Advances or
Commitment to an Eligible Assignee in accordance with the provisions of the
Credit Agreement, and any such Eligible Assignee may rely on this opinion as
if it were addressed and had been delivered to such Eligible Assignee on the
date hereof.
Very truly yours,
SCHEDULE I
Lenders, Co-Agents and Agents
[conform to signature pages of Credit Agreement]
SCHEDULE II
Material Litigation
None.
<PAGE>
EXHIBIT E
[LETTERHEAD OF GREYHOUND FINANCIAL CORPORATION]
REQUEST FOR EXTENSION OF TERMINATION DATE
_____________________, 19___
[NAME AND ADDRESS OF LENDER]
Gentlemen
In accordance with Section 2.17 of the Fifth Amendment and
Restatement, dated as of May 17, 1993, of the Credit Agreement, dated as of
May 31, 1976, as theretofore amended (the "Credit Agreement"; terms defined
therein being used herein as therein defined), among the undersigned, the
Lenders parties thereto, the Co-Agents parties thereto, Bank of America
National Trust and Savings Association, Chemical Bank and Citibank, N.A., as
Agents, and Citibank, N.A., as Administrative Agent, the undersigned hereby
requests that you consent to extension of the Termination Date to May 17,
19___, or, if such date is not a Business Day, the next succeeding Business
Day.
Please indicate your consent to such extension of the Termination
Date by signing the attached copy of this letter in the space provided below
and returning same to the undersigned, if possible by _____________, 19__
but, in any event, not later than ____________, 19___.
Very truly yours,
GREYHOUND FINANCIAL
CORPORATION
By __________________________
Title:
The undersigned Lender, party to the Credit Agreement, consents to
the extension of the Termination Date as requested above.
[NAME OF LENDER]
____________________________
By ____________________________
Title:
<PAGE>
EXHIBIT F
[FORM OF PROMISSORY NOTE]
GREYHOUND FINANCIAL CORPORATION
PROMISSORY NOTE
New York, New York
________ __, 19__
For value received, Greyhound Financial Corporation, a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
___________________________
(the "Lender"), for the account of its Applicable Lending Office, the unpaid
principal amount of each Advance made by the Lender to the Borrower pursuant
to the Credit Agreement referred to below on the last day of the Interest
Period relating to such Advance. The Borrower promises to pay interest on
the unpaid principal amount of each such Advance on the dates and at the
rate or rates provided for in the Credit Agreement. All such payments of
principal and interest shall be made in United States dollars in same day
funds at the Administrative Agent's office, as specified in the Credit
Agreement.
All Advances made by the Lender, the respective maturities thereof
and all repayments of principal thereof shall be recorded by the Lender and,
prior to any transfer hereof, appropriate notations to evidence the
foregoing information with respect to each such Advance then outstanding
shall be endorsed by the Lender on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof, or in the
records of such Lender in accordance with its usual practice; provided that
the failure of the Lender to make any such recordation or endorsement shall
not affect the obligations of the Borrower hereunder or under the Credit
Agreement.
This promissory note is one of the promissory notes referred to in
Section 8.04 of the Fifth Amendment and Restatement dated as of May 18,
1993, of Credit Agreement dated as of May 31, 1976, as theretofore amended,
among the Borrower, the Lenders named therein, the Co-Agents named therein,
Bank of America National Trust and Savings Association, Chemical Bank and
Citibank, N.A., as Agents, and Citibank, N.A., as Administrative Agent (said
Fifth Amendment and Restatement, as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"). Terms defined in the
Credit Agreement are used herein with the same meanings. Reference is
hereby made to the Credit Agreement for provisions relating to this
promissory note, including, without limitation, the mandatory and optional
prepayment hereof and the acceleration of the maturity hereof.
GREYHOUND FINANCIAL CORPORATION
By____________________________
Title:
Schedule to Promissory Note
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of
Amount of Type of Principal Maturity Notation
Date Advance Advance Repaid Date By
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
