<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1996
------------------
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to _____________
Commission file number 1-08916
---------------
GREEN TREE FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 41-1807858
- ---------------------------------- -----------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1100 LANDMARK TOWERS, SAINT PAUL, MINNESOTA 55102-1639
-------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (612) 293-3400
--------------
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
------- ----------
AS OF OCTOBER 31, 1996, 137,431,706 SHARES OF COMMON STOCK OF GREEN TREE
FINANCIAL CORPORATION WERE OUTSTANDING.
<PAGE>
GREEN TREE FINANCIAL CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1996
INDEX
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION PAGE
<S> <C> <C>
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of
Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
EXHIBIT INDEX 16
</TABLE>
CAUTIONARY STATEMENT UNDER THE
SAFE HARBOR PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Form 10-Q for the quarter ended September 30, 1996 may contain certain
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Such forward-looking statements may be identified by the use of
terminology such as "may," "will," "expect," "anticipate," "estimate," "goal,"
"continue," or comparable terminology and may involve risks or uncertainties
which are qualified in their entirety by the Cautionary Statements contained in
the Company's Form 8-K filed with the Securities and Exchange Commission on July
12, 1996. These Cautionary Statements are incorporated herein by reference and
investors are specifically referred to the Cautionary Statements for a
discussion of factors which could affect the Company's operations and the
forward looking statements contained herein.
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GREEN TREE FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
(unaudited)
<S> <C> <C>
Assets:
Cash and cash equivalents $ 584,636,000 $ 295,767,000
Cash deposits, restricted 170,082,000 151,811,000
Other investments 12,394,000 19,880,000
Receivables:
Excess servicing rights 1,403,415,000 764,617,000
Commercial finance (net of
allowance of $1,645,000
and $1,071,000) 329,108,000 141,793,000
Other accounts receivable 94,644,000 52,546,000
Contracts, GNMA certificates
and collateral 470,078,000 884,303,000
Property, furniture and
fixtures 66,785,000 57,104,000
Other assets 13,046,000 8,225,000
-------------- --------------
Total assets $3,144,188,000 $2,376,046,000
============== ==============
Liabilities and Stockholders' Equity:
Notes payable $ 3,948,000 $ 86,162,000
Senior notes 26,650,000 26,650,000
Senior subordinated notes
due 2002 263,579,000 263,234,000
Allowance for losses on
contracts sold with
recourse 406,843,000 163,337,000
Accounts payable and
accrued liabilities 438,872,000 266,131,000
Investor payable 332,951,000 238,448,000
Income taxes, principally
deferred 500,799,000 407,062,000
-------------- --------------
Total liabilities 1,973,642,000 1,451,024,000
Common stock, $.01 par;
authorized 400,000,000
shares, issued and
outstanding 139,454,706
(1996) and 137,534,266
shares (1995) 1,395,000 1,375,000
Additional paid-in capital 367,474,000 323,564,000
Retained earnings 855,590,000 653,996,000
-------------- --------------
1,224,459,000 978,935,000
Less treasury stock,
2,051,000 shares at cost (53,913,000) (53,913,000)
-------------- --------------
Total stockholders'
equity 1,170,546,000 925,022,000
-------------- --------------
$3,144,188,000 $2,376,046,000
============== ==============
</TABLE>
See notes to unaudited financial statements.
3
<PAGE>
GREEN TREE FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended September 30
-------------------------------
1996 1995
------------- ------------
<S> <C> <C>
Income:
Net gains on contract sales $ 237,798,000 $171,581,000
Provision for losses on
contract sales (103,688,000) (71,351,000)
Interest 54,541,000 51,642,000
Service 19,172,000 14,233,000
Commissions and other 11,842,000 8,269,000
------------- ------------
219,665,000 174,374,000
Expenses:
Interest 16,931,000 15,989,000
Cost of servicing 13,861,000 9,333,000
General and administrative 50,941,000 32,863,000
------------- ------------
81,733,000 58,185,000
------------- ------------
Earnings before income taxes 137,932,000 116,189,000
Income taxes 52,414,000 44,152,000
------------- ------------
Net earnings $ 85,518,000 $ 72,037,000
============= ============
Earnings per common and common
equivalent share $.61 $.51
==== ====
Weighted average common and
common equivalent shares
outstanding 140,805,663 140,544,979
</TABLE>
See notes to unaudited financial statements.
4
<PAGE>
GREEN TREE FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30
-------------------------------
1996 1995
------------- -------------
<S> <C> <C>
Income:
Net gains on contract sales $ 599,378,000 $ 410,402,000
Provision for losses on
contract sales (252,158,000) (147,280,000)
Interest 152,700,000 129,139,000
Service 52,733,000 38,346,000
Commissions and other 31,232,000 25,240,000
------------- -------------
583,885,000 455,847,000
Expenses:
Interest 45,462,000 41,284,000
Cost of servicing 38,198,000 27,400,000
General and administrative 133,609,000 89,618,000
------------- -------------
217,269,000 158,302,000
------------- -------------
Earnings before income taxes 366,616,000 297,545,000
Income taxes 139,314,000 113,067,000
------------- -------------
Net earnings $ 227,302,000 $ 184,478,000
============= =============
Earnings per common and common
equivalent share $1.62 $1.32
===== =====
Weighted average common and
common equivalent shares
outstanding 140,210,839 140,039,938
</TABLE>
See notes to unaudited financial statements.
5
<PAGE>
GREEN TREE FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30
---------------------------------
1996 1995
--------------- ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Servicing fees and net interest
payments collected $ 185,503,000 $ 127,017,000
Net proceeds from sale of net interest
margin certificates -- 302,312,000
Net principal payments collected 74,835,000 40,673,000
Interest on contracts and
GNMA certificates 38,187,000 49,130,000
Interest on cash, commercial finance
loans and investments 51,582,000 38,858,000
Commissions 23,760,000 13,544,000
Other (1,208,000) 1,783,000
--------------- ---------------
372,659,000 573,317,000
Cash paid to employees and suppliers (188,448,000) (115,760,000)
Interest paid on debt (37,209,000) (33,630,000)
Income taxes paid (36,525,000) (28,721,000)
Repossession losses net of recoveries (20,831,000) (3,577,000)
FHA insurance premiums (1,505,000) (1,484,000)
--------------- ---------------
(284,518,000) (183,172,000)
--------------- ---------------
NET CASH PROVIDED BY OPERATIONS 88,141,000 390,145,000
Purchase of contracts held for sale (5,379,042,000) (3,789,322,000)
Proceeds from sale of contracts
held for sale 5,766,855,000 3,155,477,000
Principal collections on contracts
held for sale 100,674,000 78,360,000
Commercial finance loans disbursed (2,016,754,000) (1,123,796,000)
Proceeds from sale of commercial
finance loans 199,950,000 --
Principal collections on commercial
finance loans 1,666,704,000 831,135,000
Cash deposits provided (23,915,000) (16,637,000)
Cash deposits returned 5,644,000 4,904,000
--------------- ---------------
NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES 408,257,000 (469,734,000)
--------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, furniture and
fixtures (22,667,000) (20,121,000)
Net sale of investment securities 7,486,000 975,000
--------------- ---------------
NET CASH USED FOR INVESTING ACTIVITIES (15,181,000) (19,146,000)
--------------- ---------------
</TABLE>
(continued)
6
<PAGE>
GREEN TREE FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30
---------------------------------
1996 1995
--------------- ---------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on credit facilities 4,447,278,000 3,276,045,000
Repayments on credit facilities (4,529,492,000) (2,927,780,000)
Payment of debt -- (20,246,000)
Dividends paid (25,707,000) (19,245,000)
Net common stock issued 3,714,000 1,202,000
--------------- ---------------
NET CASH (USED FOR) PROVIDED BY
FINANCING ACTIVITIES (104,207,000) 309,976,000
--------------- ---------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 288,869,000 (178,904,000)
CASH AND CASH EQUIVALENTS BEGINNING OF
PERIOD 295,767,000 455,956,000
--------------- ---------------
CASH AND CASH EQUIVALENTS END OF PERIOD $ 584,636,000 $ 277,052,000
=============== ===============
RECONCILIATION OF NET EARNINGS TO NET CASH
PROVIDED BY (USED FOR) OPERATING
ACTIVITIES:
Net earnings $ 227,302,000 $ 184,478,000
Provision for income taxes 139,314,000 113,067,000
Depreciation and amortization 15,491,000 9,708,000
Net proceeds from sale of net interest
margin certificates -- 302,312,000
Net contract payments collected, less
excess servicing rights recorded (258,186,000) (219,649,000)
Amortization of deferred service income (19,482,000) (11,090,000)
Net amortization of present value discount (57,030,000) (37,827,000)
Net increase in cash deposits (18,271,000) (11,733,000)
Purchase of contracts held for sale, net of
sales and principal collections 488,487,000 (555,486,000)
Commercial finance loans disbursed, net of
sales and principal collections (150,100,000) (292,661,000)
Net discount on sale of contract loans 39,523,000 27,050,000
Increase in interest payable 6,037,000 6,216,000
Other (4,828,000) 15,881,000
--------------- ---------------
NET CASH PROVIDED BY (USED FOR) OPERATING
ACTIVITIES $ 408,257,000 $ (469,734,000)
=============== ===============
</TABLE>
See notes to unaudited financial statements.
7
<PAGE>
GREEN TREE FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED FINANCIAL STATEMENTS
A. Basis of Presentation
The interim financial statements have been prepared by Green Tree Financial
Corporation (the "Company"), without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission applicable to quarterly
reports on Form 10-Q. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations, although management believes that the disclosures are
adequate to make the information presented not misleading. It is suggested
that these financial statements be read in conjunction with the consolidated
financial statements and related notes and schedules included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1995.
Certain reclassifications have been made to the December 31, 1995 financial
statements to conform to the classifications used in the September 30, 1996
financial statements. These reclassifications had no effect on net earnings or
stockholders' equity as previously reported.
In the opinion of management, the information furnished reflects all
adjustments which are of a normal recurring nature and are necessary for a
fair presentation of the Company's financial position as of September 30,
1996, the results of its operations for the three and nine-month periods ended
September 30, 1996 and 1995, and its cash flows for the nine-month periods
ended September 30, 1996 and 1995.
B. Excess Servicing Rights Receivable
Excess servicing rights receivable consists of:
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
(in thousands of dollars) (unaudited)
<S> <C> <C>
Gross cash flows receivable
on contracts sold $ 3,399,191 $1,407,419
Less:
Prepayment reserve (1,665,624) (674,775)
FHA insurance and other
fees (9,116) (11,100)
Deferred service income (236,143) (92,452)
Discount to present value (399,376) (183,132)
Subordinated interest in
NIM Certificates 314,483 318,657
----------- ----------
$ 1,403,415 $ 764,617
=========== ==========
</TABLE>
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Green Tree Financial Corporation is a diversified financial services company
that originates conditional sales contracts for manufactured homes, home
improvements, consumer products and equipment financing, and provides
commercial financing to manufacturers and dealers. The Company also offers
revolving credit and originates home equity and mortgage loans. The Company's
insurance agencies market physical damage, term mortgage life insurance, and
other credit protection relating to the customers' contracts it services.
Results of Operations:
The following tables show the percentage change in income, expenses and
earnings for the three and nine-month periods ended September 30, 1996 as
compared to the same periods of 1995.
<TABLE>
<CAPTION>
Three-month Nine-month
period-to-period period-to-period
increase increase
September 30, September 30,
1995 to 1996 1995 to 1996
----------------- -----------------
<S> <C> <C>
Income:
Net gains on contract
sales 38.6% 46.0%
Provision for losses on
contract sales 45.3 71.2
Interest 5.6 18.2
Service 34.7 37.5
Commissions and other 43.2 23.7
Expenses:
Interest 5.9 10.1
Cost of servicing 48.5 39.4
General and administrative 55.0 49.1
Earnings before income taxes 18.7 23.2
Net earnings 18.7 23.2
</TABLE>
Net gains on contract sales increased 38.6% and 46.0% for the three and nine-
month periods ended September 30, 1996, respectively, over the same periods in
1995 as a result of increased dollar volume of contracts sold and longer
average terms on the manufactured home and home improvement contracts sold.
This increase in net gains on contract sales was partially offset by decreased
interest rate spreads on the contracts sold and a change in mix of contracts
sold in the first nine months of 1996 compared to the same period in 1995.
For the nine month period ended September 30, 1996, compared to the same
period in 1995, total closed-end contract sales increased $2,626,179,000, or
82.6%.
The increased dollar volume in the provision for losses on contract sales of
45.3% and 71.2% for the three and nine-month periods ended September 30, 1996,
reflects the overall growth in total contract sales and the Company's
increased provision for losses on manufactured housing contract sales as a
percentage of contracts sold. The increased loss provision as a percentage of
manufactured housing
9
<PAGE>
contracts sold is a result of increasing average contract terms and the
changing mix of originations to loans which have a lower down payment. This
increase is offset by the change in the overall mix of contracts sold.
The following table sets forth the Company's closed-end contract originations
and total sales for the three and nine-month periods ended September 30, 1996
and 1995. Dollar amounts are in thousands.
<TABLE>
<CAPTION>
Three-month Nine-month
period ended period ended
September 30, September 30,
------------------- ----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Originations:
Manufactured Housing $1,415,401 $1,241,478 $3,658,540 $3,073,012
Home Improvement/
Home Equity 407,899 188,088 925,843 488,675
Consumer Products
and Other 349,558 150,058 892,726 340,388
---------- ---------- ---------- ----------
Total $2,172,858 $1,579,624 $5,477,109 $3,902,075
========== ========== ========== ==========
Sales:
Manufactured Housing $1,555,052 $1,197,759 $3,783,235 $2,732,756
Home Improvement/
Home Equity 394,065 206,009 805,351 446,264
Consumer Products
and Other 364,435 -- 1,216,613 --
---------- ---------- ---------- ----------
Total 2,313,552 1,403,768 5,805,199 3,179,020
Floorplan Receivables -- -- 199,950 --
NIM Certificates -- 308,000 -- 308,000
---------- ---------- ---------- ----------
Total $2,313,552 $1,711,768 $6,005,149 $3,487,020
========== ========== ========== ==========
</TABLE>
The manufactured housing market experienced an increase in new home shipments
during the first nine months of 1996 compared to 1995. The Company continues
to benefit from this increase and believes that it is maintaining its market
share of contracts for financing new manufactured homes. The Company's dollar
volume of new manufactured housing contract originations rose 12% and 18%
during the three and nine-month periods ended September 30, 1996,
respectively, over the same periods in 1995. The dollar volume of previously
owned MH contract originations rose 40% and 39% for the three and nine months,
respectively. The number of new contracts originated by the Company during
the first nine months of 1996 has grown from 1995 and the average contract
size has also increased due to a shift in the Company's manufactured home
financing to more land-and-home contracts and price increases by the
manufactured housing manufacturers.
The dollar volume of Home Improvement/Home Equity contracts rose 116.9% and
89.5% during the three and nine-month periods ended September 30, 1996 over
the same periods in 1995. Consumer products and other contract originations
rose 133% for the quarter and 162% for the nine-month period ended September
30, 1996. The overall growth in these originations results from expanding the
number of relationships with dealers, as well as the rapid growth in the
Company's home equity originations network.
10
<PAGE>
Interest income is realized from contract inventory, commercial finance
receivables, cash deposits, short-term investments, as well as amortization of
the present value discount relating to excess servicing rights receivable.
Interest income increased 5.6% and 18.2% during the three and nine-month
periods ended September 30, 1996 compared to the same periods in 1995
primarily from increased earnings on the Company's commercial finance
receivables, the increase in the amortization of the present value discount on
the Company's growing excess servicing rights receivable and interest accrued
on the subordinated Net Interest Margin Certificates. Due to higher
production levels, contract inventory for the nine-month period ended
September 30, 1996 was higher on average than the same period in 1995 which
also contributed to the increase in interest income.
The increase in service income of 34.7% and 37.5% during the three and nine-
month periods ended September 30, 1996, respectively, resulted from the 38.0%
growth in the Company's average originated servicing portfolio but was
partially offset by the decline in servicing income on contracts originated by
others. The average unpaid principal balance of contracts being serviced for
others decreased 21.1% during the first nine months of 1996 compared to the
first nine months of 1995. The Company expects this decline in outside
servicing to continue in the future while overall servicing income should
increase as its portfolio grows.
Commissions and other income, which includes commissions earned on new
insurance policies written and renewals on existing policies, as well as other
income from late fees, grew 43.2% and 23.7%, respectively, during the three
and nine-month periods ended September 30, 1996, respectively, compared to the
same periods in 1995. This growth is primarily a result of the increase in
net written insurance premiums as the Company's contract originations and
servicing portfolio continue to grow.
Interest expense increased 5.9% and 10.1% during the three and nine-month
periods ended September 30, 1996, respectively, as a result of the Company
maintaining a higher level of borrowings to fund its loan originations and
revolving finance portfolio during 1996 compared to the same period in 1995.
This increase was partially offset by lower average interest rates on the
Company's borrowings in the three and nine-month periods ended September 30,
1996 compared to the same periods in 1995.
Green Tree's dollar amount of cost of servicing increased 48.5% and 39.4%
during the three and nine-month periods ended September 30, 1996 compared to
the same periods in 1995. The Company's cost of servicing as a percentage of
contracts serviced for the first nine months of 1996 was consistent with the
same period in 1995.
General and administrative expenses rose 55.0% and 49.1% during the three and
nine-month periods ended September 30, 1996, respectively. As a percentage of
contract originations, however,
11
<PAGE>
these expenses have remained relatively consistent with the comparative
periods in 1995. The dollar growth is due primarily to an increase in
personnel and other origination costs related to the start-up and growth of
the Company's new divisions as well as the increased volume of contracts the
Company originated during the first nine months of 1996.
Capital Resources and Liquidity:
The Company's business requires continued access to the capital markets for
the purchase, warehousing and sale of contracts. To satisfy these needs, the
Company employs a variety of capital resources.
Historically, the most important liquidity source for the Company has been its
ability to sell contracts in the secondary markets through loan
securitizations and sales of GNMA certificates. During the third quarter of
1996, the Company used a senior/subordinated structure for each of its three
conventional manufactured home loan sales and enhanced a portion of the
subordinated certificates sold with a corporate guarantee. In addition, the
Company's third quarter lien home improvement and home equity loan sale
included two separate but cross-collateralized loan pools which employed a
senior/subordinate structure with a limited guarantee on a portion of the
subordinate certificates. The non-lien home improvement sale structure
included unsecured home improvement contracts and was a single class pass-
through with a limited corporate guarantee. The Company's third quarter sale
of consumer product and equipment finance loans employed a multi-class credit
tranched owner trust structure with floating rate senior certificates and a
limited corporate guarantee on the most junior fixed rate certificates.
Servicing fees and net interest payments collected, which has been the
Company's principal source of cash, increased during the nine-month period
ended September 30, 1996 over the same period in 1995. Contributing to this
growth is an increase in normal servicing fees collected by the Company on its
growing servicing portfolio, and an increase in excess servicing collected
from the additional securitizations in which the Company had not sold a
portion of the related excess servicing rights.
Net principal payments collected were positive in each of the nine-month
periods ended September 30, 1996 and 1995 as a result of an increase in the
contract principal payments collected by the Company as of the end of each
period but not yet remitted to the investors/owners of the contracts. These
increases are a result of customer payoffs and the growth of the Company's
servicing portfolio of contracts which have been sold.
Interest on cash, commercial finance receivables and investments increased
during the first nine months of 1996 compared to the same period in 1995
primarily as a result of the substantial increase in
12
<PAGE>
commercial finance receivables serviced.
Dividends paid by the Company increased 33.6% in the first nine months of 1996
compared to the same period in 1995 as the Company's 1996 quarterly average
dividend rate increased 42.1% over the 1995 quarterly average dividend rate
for the first nine months.
The Company has a $500 million unsecured bank credit agreement. This credit
facility is a three-year committed revolving line of credit which expires
April 15, 1999. In addition, the Company currently has $1.3 billion in master
repurchase agreements with various investment banking firms for the purpose of
financing its contract and commercial finance loan production. At September
30, 1996, the Company had no borrowings outstanding under these repurchase
agreements and had $2,000,000 outstanding under its bank credit agreement. The
master repurchase agreements generally provide for annual terms that are
extended each quarter by mutual agreement of the parties for an additional
annual term based upon receipt of updated quarterly financial information from
the Company. The Company believes that these agreements will continue to be
renewed.
The Company also has a commercial paper program through which it is authorized
to issue up to $1 billion in notes of varying terms (not to exceed 270 days)
to meet its liquidity needs. This program is backed by the bank credit
agreement and master repurchase agreements referred to above. As of September
30, 1996, the Company had no outstandings under this program. Commercial paper
is expected to be an ongoing source of liquidity for purposes of meeting the
Company's funding needs between sales of its contract and commercial loan
production.
The Company announced on October 21, 1996 the signing of an agreement to
acquire the Manufacturer and Dealer Services Division of The FINOVA Group,
Inc. for approximately $600 million. The closing date for this acquisition is
expected to be November 30, 1996.
13
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The nature of the Company's business is such that it is routinely a
party or subject to items of pending or threatened litigation.
Although the ultimate outcome of certain of these matters cannot be
predicted, management believes, based upon information currently
available and the advice of counsel, that the resolution of these
routine legal matters will not result in any material adverse effect
on its consolidated financial condition.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6.(a) EXHIBITS
10(q). Credit Agreement dated as of April 16, 1996
between Green Tree Financial Corporation and
The First National Bank of Chicago.
11(a). Computation of Primary Earnings per Share.
11(b). Computation of Fully Diluted Earnings Per
Share.
12. Computation of Ratio of Earnings to Fixed
Charges.
27. Financial Data Schedule.
(b) REPORTS ON FORM 8-K
During the quarter ended September 30, 1996, the Company filed a
Cautionary statement under the Safe Harbor Provisions of the
Private Securities Litigation Reform Act of 1995 on Form 8-K on
July 12, 1996.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GREEN TREE FINANCIAL CORPORATION
DATE: November 14, 1996 /s/Edward L. Finn
------------------------------
Edward L. Finn
Executive Vice President and
Chief Financial Officer
DATE: November 14, 1996 /s/Joel H. Gottesman
------------------------------
Joel H. Gottesman
Senior Vice President and
General Counsel
15
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Page
- ---------- ------- ----
<S> <C> <C>
10(q). Credit Agreement dated as of April 16,
1996 between Green Tree Financial
Corporation and The First National
Bank of Chicago 17
11(a). Computation of Primary Earnings Per Share 68
11(b). Computation of Fully Diluted Earnings Per
Share 69
12. Computation of Ratio of Earnings to
Fixed Charges 70
27. Financial Data Schedule 71
</TABLE>
16
<PAGE>
Exhibit 10(8)
================================================================================
$500,000,000
CREDIT AGREEMENT
AMONG
GREEN TREE FINANCIAL CORPORATION,
as Borrower,
THE LENDERS NAMED HEREIN
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Administrative Agent
DATED AS OF
April 16, 1996
================================================================================
17
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE DEFINITIONS........................................................ 1
ARTICLE II THE FACILITY 15
2.1. The Facility...................................................... 15
2.1.1. Description of Facility..................................... 15
2.1.2. Facility Amount............................................. 16
2.1.3. Availability of Facility.................................... 16
2.2. Ratable Advances.................................................. 16
2.2.1. Ratable Advances............................................ 16
2.2.2 Ratable Advance Rate Options................................ 16
2.2.3. Method of Selecting Types and Interest Periods for
Ratable Advances.................................................. 16
2.2.4. Conversion and Continuation of Outstanding
Ratable Advances.................................................. 17
2.3. Competitive Bid Advances.......................................... 18
2.3.1. Competitive Bid Option...................................... 18
2.3.2. Competitive Bid Quote Request............................... 18
2.3.3. Invitation for Competitive Bid Quotes....................... 19
2.3.4. Submission and Contents of Competitive Bid
Quotes............................................................ 19
2.3.5. Notice to Borrower.......................................... 20
2.3.6. Acceptance and Notice by Borrower........................... 20
2.3.7. Allocation by Administrative Agent.......................... 21
2.4. Swing Line Advances............................................... 21
2.5. Availability of Funds............................................. 23
2.6. Facility Fee; Utilization Fee; Reductions in Aggregate
Commitment........................................................ 24
2.7. Minimum Amount of Each Advance.................................... 24
2.8. Optional Principal Payments....................................... 24
2.9. Mandatory Prepayments............................................. 25
2.10. Changes in Interest Rate, etc..................................... 25
2.11. Rates Applicable After Default.................................... 25
2.12. Method of Payment................................................. 25
2.13. Notes; Telephonic Notices......................................... 25
2.14. Interest Payment Dates; Interest and Fee Basis.................... 26
2.15. Notification of Advances, Interest Rates, Prepayments
and Commitment Reductions......................................... 26
2.16. Lending Installations............................................. 26
2.17. Non-Receipt of Funds by the Administrative Agent.................. 27
2.18. Taxes............................................................. 27
2.19. Administrative Agent's Fees....................................... 28
ARTICLE III CHANGE IN CIRCUMSTANCES........................................ 28
3.1. Yield Protection.................................................. 28
3.2. Changes in Capital Adequacy Regulations........................... 29
3.3. Availability of Types of Advances................................. 30
3.4. Funding Indemnification........................................... 30
3.5. Lender Statements; Survival of Indemnity.......................... 30
ARTICLE IV CONDITIONS PRECEDENT............................................ 30
4.1. Initial Loans..................................................... 30
4.2. Each Future Advance............................................... 32
i
<PAGE>
<TABLE>
<S> <C>
ARTICLE V REPRESENTATIONS AND WARRANTIES............................... 32
5.1. Corporate Existence and Standing........................ 32
5.2. Authorization and Validity.............................. 32
5.3. Compliance with Laws and Contracts...................... 33
5.4. Governmental Consents................................... 33
5.5. Financial Statements.................................... 33
5.6. Material Adverse Change................................. 34
5.7. Taxes................................................... 34
5.8. Litigation and Contingent Obligations................... 34
5.9. Subsidiaries............................................ 34
5.10. ERISA................................................... 34
5.11. Defaults................................................ 35
5.12. Federal Reserve Regulations............................. 35
5.13. Investment Company...................................... 35
5.14. Disclosure.............................................. 35
ARTICLE VI COVENANTS................................................... 36
6.1. Financial Reporting..................................... 36
6.2. Use of Proceeds......................................... 37
6.3. Notice of Default....................................... 37
6.4. Conduct of Business..................................... 37
6.5. Taxes................................................... 37
6.6. Compliance with Laws.................................... 37
6.7. Maintenance of Properties............................... 37
6.8. Inspection.............................................. 38
6.9. Mergers, Sales of Assets, etc........................... 38
6.10. Liens................................................... 39
6.11. Inconsistent Agreements................................. 40
6.12. Financial Covenants..................................... 41
6.12.1. Net Worth.......................................... 41
6.12.2. Fixed Charge Coverage Ratio........................ 41
6.12.3. Debt to Equity Ratio............................... 41
ARTICLE VII DEFAULTS................................................... 41
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES............ 42
8.1. Acceleration............................................ 42
8.2. Amendments.............................................. 43
8.3. Preservation of Rights.................................. 43
ARTICLE IX GENERAL PROVISIONS.......................................... 44
9.1. Survival of Representations............................. 44
9.2. Governmental Regulation................................. 44
9.3. Taxes................................................... 44
9.4. Headings................................................ 44
9.5. Entire Agreement........................................ 44
9.6. Several Obligations; Benefits of this Agreement......... 44
9.7. Expenses; Indemnification............................... 44
9.8. Numbers of Documents.................................... 45
9.9. Accounting.............................................. 45
9.10. Severability of Provisions.............................. 45
9.11. Nonliability of Lenders................................. 45
9.12. CHOICE OF LAW........................................... 46
9.13. CONSENT TO JURISDICTION................................. 46
9.14. WAIVER OF JURY TRIAL.................................... 46
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
9.15. Disclosure................................................. 46
9.16. Counterparts............................................... 47
ARTICLE X
THE ADMINISTRATIVE AGENT.......................................... 47
10.1. Appointment................................................ 47
10.2. Powers..................................................... 47
10.3. General Immunity........................................... 47
10.4. No Responsibility for Loans, Recitals, etc................. 47
10.5. Action on Instructions of Lenders.......................... 47
10.6. Employment of Agents and Counsel........................... 48
10.7. Reliance on Documents; Counsel............................. 48
10.8. Administrative Agent's Reimbursement and Indemnification... 48
10.9. Notice of Default.......................................... 48
10.10. Rights as a Lender......................................... 49
10.11. Lender Credit Decision..................................... 49
10.12. Successor Administrative Agent............................. 49
10.13. Co-Agents.................................................. 50
ARTICLE XI SETOFF; RATABLE PAYMENTS................................. 50
11.1. Setoff..................................................... 50
11.2. Ratable Payments........................................... 50
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS....... 50
12.1. Successors and Assigns..................................... 50
12.2. Participations............................................. 51
12.2.1. Permitted Participants; Effect......................... 51
12.2.2. Voting Rights.......................................... 51
12.2.3. Benefit of Setoff...................................... 51
12.3. Assignments................................................ 51
12.3.1. Permitted Assignments.................................. 51
12.3.2. Effect; Effective Date................................. 52
12.4. Dissemination of Information............................... 52
12.5. Tax Treatment.............................................. 52
ARTICLE XIII NOTICES................................................ 52
13.1. Giving Notice.............................................. 52
13.2. Change of Address.......................................... 53
</TABLE>
iii
<PAGE>
EXHIBITS
--------
<TABLE>
<CAPTION>
<S> <C>
Exhibit A -- Note (Ratable Loan)
Exhibit B -- Note (Competitive Bid Loan)
Exhibit C -- Competitive Bid Quote Request
Exhibit D -- Invitation for Competitive Bid Quotes
Exhibit E -- Competitive Bid Quote
Exhibit F -- Note (Swing Line Loan)
Exhibit G-1 -- Opinion of Counsel to the Borrower
Exhibit G-2 -- Opinion of General Counsel of the Borrower
Exhibit H -- Compliance Certificate
Exhibit I -- Assignment Agreement
Exhibit J -- Money Transfer Instructions
SCHEDULES
---------
Schedule 5.3 -- Approvals and Consents
Schedule 5.8 -- Material Contingent Obligations
Schedule 5.9 -- Subsidiaries
Schedule 5.10 -- ERISA
</TABLE>
iv
<PAGE>
CREDIT AGREEMENT
This Credit Agreement, dated as of April 16, 1996, is among GREEN TREE
FINANCIAL CORPORATION, a Delaware corporation, the Lenders and THE FIRST
NATIONAL BANK OF CHICAGO, individually and as Administrative Agent.
R E C I T A L S:
- - - - - - - -
A. The Borrower has requested the Lenders to make financial accommodations
to it in the aggregate principal amount of $500,000,000, the proceeds of which
the Borrower will use for the general corporate needs, including commercial
paper backup, of the Borrower and its Subsidiaries.
B. The Lenders are willing to extend such financial accommodations on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
herein contained, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Borrower, the Lenders
and the Administrative Agent hereby agree as follows:
ARTICLE I
DEFINITIONS
-----------
As used in this Agreement:
"Absolute Rate" means, with respect to an Absolute Rate Loan made by a
given Lender for the relevant Absolute Rate Interest Period, the rate of
interest per annum (rounded to the nearest 1/100 of 1%) offered by such Lender
and accepted by the Borrower.
"Absolute Rate Advance" means a borrowing hereunder consisting of the
aggregate amount of the several Absolute Rate Loans made by some or all of the
Lenders to the Borrower at the same time and for the same Interest Period.
"Absolute Rate Auction" means a solicitation of Competitive Bid Quotes
setting forth Absolute Rates pursuant to Section 2.3.
"Absolute Rate Interest Period" means, with respect to an Absolute Rate
Advance, a period of not less than 30 and not more than 180 days commencing on
a Business Day selected by the Borrower pursuant to this Agreement. If such
Absolute Rate Interest Period would end on a day which is not a Business Day,
such Absolute Rate Interest Period shall end on the next succeeding Business
Day.
"Absolute Rate Loan" means a Loan which bears interest at the Absolute
Rate.
1
<PAGE>
"Adjusted EBIT" means, for any applicable computation period, the Borrower's
and Subsidiaries' Net Income on a consolidated basis from continuing operations,
plus (a) income and franchise taxes paid or accrued during such period and (b)
Interest Expense, minus (a) income derived from discontinued operations of the
Borrower and its Subsidiaries and (b) extraordinary gains of the Borrower and
its Subsidiaries resulting from changes in the application of Agreement
Accounting Principles.
"Advance" means a borrowing hereunder consisting of the aggregate amount of
the several Loans made by some or all of the Lenders to the Borrower on the same
Borrowing Date, of the same Type (or on the same interest basis in the case of
Competitive Bid Advances) and, when applicable, for the same Interest Period and
includes a Competitive Bid Advance.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Administrative Agent" means First Chicago in its capacity as administrative
agent for the Lenders pursuant to Article X, and not in its individual capacity
as a Lender, and any successor Administrative Agent appointed pursuant to
Article X.
"Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders hereunder. The initial Aggregate Commitment is $500,000,000.
"Agreement" means this Credit Agreement, as it may be amended, modified or
restated and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
those used in preparing the Financial Statements; provided, however, that for
purposes of all computations required to be made with respect to compliance by
the Borrower with Section 6.12, such term shall mean generally accepted
accounting principles as in effect on the date hereof, applied in a manner
consistent with those used in preparing the Financial Statements.
"Alternate Base Rate" means, for any day, a rate of interest per annum equal
to the higher of (a) the Corporate Base Rate for such day, and (b) the sum of
the Federal Funds Effective Rate for such day plus 1/2% per annum.
2
<PAGE>
"Alternate Base Rate Advance" means an Advance which bears interest at the
Alternate Base Rate requested by the Borrower pursuant to Section 2.2.3.
"Alternate Base Rate Loan" means a Ratable Loan which bears interest at the
Alternate Base Rate requested by the Borrower pursuant to Section 2.2.3.
"Alternate Swing Line Rate" means, with respect to a Swing Line Bank, a rate
agreed upon from time to time by the Borrower and such Swing Line Bank pursuant
to such supplemental agreements as may be entered into between the Borrower and
such Swing Line Bank from time to time governing the required maintenance of
minimum average daily qualifying balances with such Swing Line Bank.
"Applicable Eurodollar Margin" means, on any date, subject to the following
sentence of this definition, the applicable of the following percentages:
<TABLE>
<CAPTION>
Applicable
Debt Rating on Such Date Eurodollar Margin
------------------------ -----------------
<S> <C>
Level I Status .225%
Level II Status .25%
Level III Status .35%
Level IV Status .50%
</TABLE>
Any change in the Applicable Eurodollar Margin shall be effective as of the date
of the change in the Debt Rating giving rise thereto and shall apply during the
period commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change.
"Applicable Facility Fee Percentage" means, on any date, subject to the
following sentence of this definition, the applicable of the following
percentages:
<TABLE>
<CAPTION>
Applicable Facility
Debt Rating on Such Date Fee Percentage
------------------------ -------------------
<S> <C>
Level I Status .115%
Level II Status .125%
Level III Status .1875%
Level IV Status .25%
</TABLE>
Any change in the Applicable Facility Fee Percentage shall be effective as of
the date of the change in the Debt Rating giving rise thereto and shall apply
during the period commencing on the
3
<PAGE>
effective date of such change and ending on the date immediately preceding the
effective date of the next such change.
"Applicable Utilization Fee Percentage" means, on any date, subject to the
final sentence of this definition:
(a) In the event that the average daily principal amount of the
Ratable Loans and the Swing Line Loans outstanding during any calendar
quarter is greater than 33 1/3%, but less than or equal to 66 2/3%, of the
Aggregate Commitment as in effect on the last day of such calendar quarter,
the applicable of the following percentages:
<TABLE>
<CAPTION>
Applicable
Utilization
Debt Rating on Such Date Fee Percentage
------------------------ --------------
<S> <C>
Level I Status .05%
Level II Status .0625%
Level III Status .10%
Level IV Status .10%
</TABLE>
(b) In the event that the average daily principal amount of the
Ratable Loans and the Swing Line Loans outstanding during any calendar
quarter is greater than 66 2/3% of the Aggregate Commitment as in effect on
the last day of such calendar quarter, the applicable of the following
percentages:
<TABLE>
<CAPTION>
Applicable
Utilization
Debt Rating on Such Date Fee Percentage
------------------------ --------------
<S> <C>
Level I Status .10%
Level II Status .125%
Level III Status .20%
Level IV Status .20%
</TABLE>
Any change in the Applicable Utilization Fee Percentage shall be effective as of
the date of the change in the Debt Rating giving rise thereto and shall apply
during the period commencing on the effective date of such change and ending on
the date immediately preceding the effective date of the next such change.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means any of the president, chief financial officer or
treasurer of the Borrower, acting singly.
4
<PAGE>
"Bankruptcy Code" means Title 11, United States Code, sections 1 et seq.,
as the same may be amended from time to time, and any successor thereto or
replacement therefor which may be hereafter enacted.
"Borrower" means Green Tree Financial Corporation, a Delaware corporation,
and its successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Business Day" means (a) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago for the conduct of substantially all
of their commercial lending activities and on which dealings in United States
dollars are carried on in the London interbank market, and (b) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago for the conduct of substantially all of their commercial lending
activities.
"Capitalized Lease" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Change" is defined in Section 3.2.
"Closing Transactions" is defined in Section 4.1(d).
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender to make
Loans not exceeding the amount set forth opposite its signature below and as set
forth in any Notice of Assignment relating to any assignment which has become
effective pursuant to Section 12.3.2, as such amount may be modified from time
to time pursuant to the terms hereof.
"Competitive Bid Advance" means a borrowing hereunder consisting of the
aggregate amount of the several Competitive Bid Loans made by some or all of
the Lenders to the Borrower at the same time and for the same Interest Period.
"Competitive Bid Borrowing Notice" is defined in Section 2.3.6.
"Competitive Bid Loan" means a Eurodollar Bid Rate Loan or
5
<PAGE>
an Absolute Rate Loan, or both, as the case may be.
"Competitive Bid Margin" means the margin above or below the applicable
Eurodollar Base Rate offered for a Eurodollar Bid Rate Loan, expressed as a
percentage (rounded to the nearest 1/100 of 1%) to be added or subtracted from
such Eurodollar Base Rate.
"Competitive Bid Note" means a promissory note in substantially the form of
Exhibit B hereto, with appropriate insertions, duly executed and delivered to
the Administrative Agent by the Borrower for the account of a Lender and payable
to the order of such Lender, including any amendment, modification, renewal or
replacement of such promissory note.
"Competitive Bid Quote" means a Competitive Bid Quote substantially in the
form of Exhibit E hereto completed and delivered by a Lender to the
Administrative Agent in accordance with Section 2.3.4.
"Competitive Bid Quote Request" means a Competitive Bid Quote Request
substantially in the form of Exhibit C hereto completed and delivered by the
Borrower to the Administrative Agent in accordance with Section 2.3.2.
"Consolidated" or "consolidated", when used in connection with any
calculation, means a calculation to be determined on a consolidated basis for
the Borrower and its Subsidiaries in accordance with Agreement Accounting
Principles.
"Consolidated Debt" means, at any time, the aggregate principal amount of
Indebtedness outstanding at such time of the Borrower and its Subsidiaries as
reflected on the consolidated balance sheet of the Borrower and its
Subsidiaries, prepared in accordance with Agreement Accounting Principles.
"Consolidated Net Tangible Assets" means, at any time, (a) the total of all
assets reflected on a consolidated balance sheet of the Borrower and its
Subsidiaries, prepared in accordance with Agreement Accounting Principles, at
their net book value (after deducting related depreciation, depletion,
amortization and all other valuation reserves which, in accordance with
Agreement Accounting Principles, should be set aside in connection with the
business conducted), but excluding goodwill, unamortized debt discount and all
other like segregated intangible assets, all as determined in accordance with
Agreement Accounting Principles, less (b) the aggregate of the current
liabilities of the Borrower and its Subsidiaries reflected on such balance
sheet, all as determined in accordance with Agreement Accounting Principles. For
purposes of this definition, "current liabilities" includes all Indebtedness of
the Borrower and its Subsidiaries and accruals of the Borrower and its
Subsidiaries, in each case payable on demand or due within one year of the date
of the determination of Consolidated Net Tangible Assets, all as
6
<PAGE>
reflected on such consolidated balance sheet of the Borrower and its
Subsidiaries, prepared in accordance with Agreement Accounting Principles.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person,
or agrees to maintain the net worth or working capital or other financial
condition of any other Person, or otherwise assures any creditor of such other
Person against loss, including, without limitation, any comfort letter,
operating agreement or take-or-pay contract or application for a Letter of
Credit.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower or any of its Subsidiaries, are treated as a
single employer under Section 414 of the Code.
"Conversion/Continuation Notice" is defined in Section 2.2.4.
"Corporate Base Rate" means a rate per annum equal to the corporate base
rate of interest announced by First Chicago from time to time, changing when
and as said corporate base rate changes.
"Debt Rating" means the credit rating assigned to the Borrower's senior,
unsecured long term debt (without credit enhancement) as publicly announced by
Moody's or S&P, as the case may be.
"Debt to Equity Ratio" means, at any time, the ratio of (a) Consolidated
Debt to (b) Net Worth.
"Default" means an event described in Article VII.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurodollar Advance" means a Eurodollar Bid Rate Advance or a Eurodollar
Ratable Advance, or both, as the case may be.
"Eurodollar Auction" means a solicitation of Competitive Bid Quotes
setting forth Eurodollar Bid Rates pursuant to Section 2.3.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for the
relevant Eurodollar Interest Period, the rate determined by the Administrative
Agent to be the rate of interest per annum for deposits in U.S. dollars for a
period equal to the
7
<PAGE>
relevant Eurodollar Interest Period quoted on Telerate Screen Page 3750 (or its
successor if such page number changes) at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Eurodollar Interest Period. If
no quotation is available on Telerate, the "Eurodollar Base Rate" shall mean the
rate determined by the Administrative Agent to be the rate at which deposits in
U.S. dollars are offered by First Chicago to first class banks in the London
interbank market at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Eurodollar Interest Period.
"Eurodollar Bid Rate" means, with respect to a Eurodollar Bid Rate Loan
made by a given Lender for the relevant Eurodollar Interest Period, the sum of
(a) the Eurodollar Base Rate and (b) the Competitive Bid Margin offered by
such Lender and accepted by the Borrower.
"Eurodollar Bid Rate Advance" means a Competitive Bid Advance which bears
interest at a Eurodollar Bid Rate.
"Eurodollar Bid Rate Loan" means a Loan which bears interest at the
Eurodollar Bid Rate.
"Eurodollar Interest Period" means, with respect to a Eurodollar Ratable
Advance or a Eurodollar Bid Rate Advance, a period of one, two, three or six
months commencing on a Business Day selected by the Borrower pursuant to this
Agreement. Such Eurodollar Interest Period shall end on (but exclude) the day
which corresponds numerically to such date one, two, three or six months
thereafter; provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Eurodollar Interest Period shall end on the last Business Day of such next,
second, third or sixth succeeding month. If a Eurodollar Interest Period
would otherwise end on a day which is not a Business Day, such Eurodollar
Interest Period shall end on the next succeeding Business Day; provided,
however, that if said next succeeding Business Day falls in a new month, such
Eurodollar Interest Period shall end on the immediately preceding Business
Day.
"Eurodollar Loan" means a Eurodollar Ratable Loan or Eurodollar Bid Rate
Loan, or both, as the case may be.
"Eurodollar Ratable Advance" means an Advance which bears interest at a
Eurodollar Rate requested by the Borrower pursuant to Section 2.2.3.
"Eurodollar Ratable Loan" means a Ratable Loan which bears interest at a
Eurodollar Rate requested by the Borrower pursuant to Section 2.2.3.
"Eurodollar Rate" means, with respect to a Eurodollar Ratable Advance for
any date during the relevant Eurodollar Interest Period, the sum of (a) the
quotient of (i) the
8
<PAGE>
Eurodollar Base Rate applicable to such Eurodollar Interest Period, divided by
(ii) one minus the Reserve Requirement (expressed as a decimal) applicable to
such Eurodollar Interest Period, plus (b) the Applicable Eurodollar Margin for
such date. The Eurodollar Rate shall be rounded to the next higher multiple
of 1/16 of 1% if the rate is not such a multiple.
"Existing Lien" is defined in Section 6.10(j).
"Extended Lien" is defined in Section 6.10(j).
"Facility Termination Date" means April 16, 1999.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately 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 at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"Financial Statements" is defined in Section 5.5.
"First Bank" means First Bank National Association in its individual
capacity, and its successors.
"First Chicago" means The First National Bank of Chicago in its individual
capacity, and its successors.
"Fiscal Quarter" means each of the four quarterly accounting periods
comprising a Fiscal Year.
"Fiscal Year" means the twelve-month accounting period commencing on
January 1 and ending on December 31 of each year.
"Fixed Charge Coverage Ratio" means, for any applicable computation period,
the ratio of (a) Adjusted EBIT to (b) Interest Expense.
"Governmental Authority" means any government (foreign or domestic) or any
state or other political subdivision thereof or any governmental body, agency,
authority, department or commission (including, without limitation, any taxing
authority or political subdivision) or any instrumentality or officer thereof
(including, without limitation, any court or tribunal) exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any corporation, partnership or other entity directly or
indirectly owned or controlled by or subject to the control of any of the
foregoing.
9
<PAGE>
"Indebtedness" of a Person means such Person's (a) obligations for borrowed
money, (b) obligations representing the deferred purchase price of Property or
services (other than accounts payable arising in the ordinary course of such
Person's business payable on terms customary in the trade), (c) obligations,
whether or not assumed, secured by Liens or payable out of the proceeds or
production from Property now or hereafter owned or acquired by such Person, (d)
obligations which are evidenced by notes, acceptances, or similar instruments,
(e) Capitalized Lease Obligations, (f) Rate Hedging Obligations, (g) Contingent
Obligations, (h) obligations for which such Person is obligated pursuant to or
in respect of a Letter of Credit and (i) repurchase obligations or liabilities
of such Person with respect to accounts or notes receivable and chattel paper
sold by such Person.
"Interest Expense" means, for any applicable computation period, all
interest paid or accrued during such period by the Borrower and its Subsidiaries
on a consolidated basis, determined in accordance with Agreement Accounting
Principles.
"Interest Period" means a Eurodollar Interest Period or an Absolute Rate
Interest Period.
"Invitation for Competitive Bid Quotes" means an Invitation for Competitive
Bid Quotes substantially in the form of Exhibit D hereto, completed and
delivered by the Administrative Agent to the Lenders in accordance with Section
2.3.3.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the
Administrative Agent, any office, branch, subsidiary or affiliate of such Lender
or the Administrative Agent.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Level I Status" exists at any date if at such date the Debt Rating is A3
(or the equivalent) or higher by Moody's and A- (or the equivalent) or higher
by S&P.
"Level II Status" exists at any date if at such date (a) the Debt Rating
is Baal (or the equivalent) or higher by Moody's and BBB+ (or the equivalent)
or higher by S&P and (b) Level I Status does not exist.
"Level III Status" exists at any date if at such date (a) the Debt Rating
is Baa3 (or the equivalent) or higher by Moody's and BBB- (or the equivalent)
or higher by S&P and (b) neither
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Level I Status nor Level II Status exists.
"Level IV Status" exists at any date if at such date (a) the Debt Rating is
either lower than Baa3 (or the equivalent) by Moody's or lower than BBB-(or the
equivalent) by S&P or (b) the Borrower's senior, unsecured and publicly-held
indebtedness is unrated by either Moody's or S&P.
"Lien" means any security interest, lien (statutory or other), mortgage,
pledge, hypothecation, assignment, deposit arrangement, encumbrance or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, the interest of a
vendor or lessor under any conditional sale, Capitalized Lease or other title
retention agreement).
"Loan" means, with respect to a Lender, such Lender's portion of any
Advance and "Loans" means, with respect to the Lenders, the aggregate of all
Advances.
"Loan Documents" means this Agreement, the Notes and the other documents
and agreements contemplated hereby and executed by the Borrower in favor of the
Administrative Agent or any Lender.
"Majority Lenders" means Lenders in the aggregate having at least 66 2/3%
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 66 2/3% of the aggregate unpaid
principal amount of outstanding Advances.
"Margin Stock" has the meaning assigned to that term under Regulation U.
"Material Adverse Effect" means a material adverse effect on (a) the
business, Property, condition (financial or other), performance, results of
operations, or prospects of the Borrower and its Subsidiaries taken as a whole,
(b) the ability of the Borrower or any Subsidiary to perform its obligations
under the Loan Documents, or (c) the validity or enforceability of any of the
Loan Documents or the rights or remedies of the Administrative Agent or the
Lenders thereunder.
"Moody's" means Moody's Investors Service, Inc., a Delaware corporation,
together with any Person succeeding thereto by merger, consolidation or
acquisition of all or substantially all of its assets, including substantially
all of its business of rating securities.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
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"Net Income" means, for any computation period, with respect to the
Borrower on a consolidated basis with its Subsidiaries (other than any
Subsidiary which is restricted from declaring or paying dividends or otherwise
advancing funds to its parent whether by contract or otherwise), cumulative net
income earned during such period as determined in accordance with Agreement
Accounting Principles.
"Net Worth" means, at any date, the consolidated common stockholders'
equity of the Borrower and its consolidated Subsidiaries determined in
accordance with Agreement Accounting Principles.
"Non-Excluded Taxes" is defined in Section 2.18(a).
"Notes" means, collectively, the Competitive Bid Notes, the Ratable Notes
and the Swing Line Notes; and "Note" means any one of the Notes.
"Notice of Assignment" is defined in Section 12.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid interest
on the Notes, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of the Borrower to the Lenders or to any
Lender, the Administrative Agent or any indemnified party hereunder arising
under any of the Loan Documents.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each of March, June, September and
December.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Person" means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, trust or other entity or organization, or
any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means an employee pension benefit plan, as defined in Section 3(2)
of ERISA, as to which the Borrower or any member of the Controlled Group may
have any liability.
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"pro-rata" means, when used with respect to a Lender, and any described
aggregate or total amount, an amount equal to such Lender's pro-rata share or
portion based on its percentage of the Aggregate Commitment or, if the
Aggregate Commitment has been terminated, its percentage of the aggregate
principal amount of outstanding Advances.
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"Purchase" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (a) acquires any going business or all or substantially all
of the assets of any firm, corporation or division or line of business thereof,
whether through purchase of assets, merger or otherwise, or (b) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage or voting power) of the
outstanding partnership interests of a partnership.
"Purchasers" is defined in Section 12.3.1.
"Ratable Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Ratable Loans made by the Lenders to the Borrower at the
same time, of the same Type and for the same Interest Period.
"Ratable Borrowing Notice" is defined in Section 2.2.3.
"Ratable Loan" means a Loan made by a Lender pursuant to Section 2.2.
"Ratable Note" means a promissory note in substantially the form of Exhibit
A hereto, duly executed and delivered to the Administrative Agent by the
Borrower for the account of each Lender and payable to the order of a Lender in
the amount of its Commitment, including any amendment, modification, renewal or
replacement of such promissory note.
"Rate Hedging Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or cross-
currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (b) any and all
cancellations, buybacks, reversals, terminations or assignments of any of the
foregoing.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to depositary institutions.
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"Regulation G" means Regulation G of the Board of Governors of the Federal
Reserve System as from time to time in effect and shall include any successor or
other regulation or official interpretation of said Board of Governors relating
to the extension of credit by Persons other than banks, brokers and dealers for
the purpose of purchasing or carrying margin stocks applicable to such Persons.
"Regulation T" means Regulation T of the Board of Governors of the Federal
Reserve System as from time to time in effect and shall include any successor or
other regulation or official interpretation of said Board of Governors relating
to the extension of credit by securities brokers and dealers for the purpose of
purchasing or carrying margin stocks applicable to such Persons.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and shall include any successor or
other regulation or official interpretation of said Board of Governors relating
to the extension of credit by banks for the purpose of purchasing or carrying
margin stocks applicable to such Persons.
"Regulation X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and shall include any successor or
other regulation or official interpretation of said Board of Governors relating
to the extension of credit by the specified lenders for the purpose of
purchasing or carrying margin stocks applicable to such Persons.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event; provided that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Risk-Based Capital Guidelines" is defined in Section 3.2.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill,
Inc., together with any Person succeeding thereto by merger, consolidation or
acquisition of all or substantially all of its assets, including substantially
all of its business of rating securities.
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"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Single Employer Plan" means a Plan subject to Title IV of ERISA maintained
by the Borrower or any member of the Controlled Group for employees of the
Borrower or any member of the Controlled Group, other than a Multiemployer Plan.
"Subsidiary" of a Person means (a) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(b) any partnership, association, joint venture or similar business organization
more than 50% of the ownership interests having ordinary voting power of which
shall at the time be so owned or controlled. Unless otherwise expressly
provided, all references herein to a "Subsidiary" shall mean a Subsidiary of the
Borrower.
"Substantial Portion" means, with respect to the Property of the Borrower
and its Subsidiaries, Property which (a) represents more than 10% of the
consolidated assets of the Borrower and its Subsidiaries, as would be shown in
the consolidated financial statements of the Borrower and its Subsidiaries as at
the end of the Fiscal Quarter next preceding the date on which such
determination is made, or (b) is responsible for more than 10% of the
consolidated net sales or of the Net Income of the Borrower and its Subsidiaries
for the 12-month period ending as of the end of the Fiscal Quarter next
preceding the date of determination.
"Swing Line Advance" means a borrowing hereunder consisting of the
aggregate amount of the several Swing Line Loans made by the Swing Line Banks to
the Borrower on the same Borrowing Date.
"Swing Line Banks" means First Chicago and First Bank and their respective
successors and assigns.
"Swing Line Commitment" means the obligation of a Swing Line Bank to make
Swing Line Loans hereunder in an aggregate amount at any one time outstanding
not to exceed the amount set forth below, as the same may be terminated or
permanently reduced from time to time hereunder; provided, however, that the
aggregate of the Swing Line Commitments on the date hereof shall be $50,000,000.
The Swing Line Commitments will automatically and permanently terminate on the
Facility Termination Date. The initial Swing Line Commitments shall be:
First Chicago - $25,000,000
First Bank - $25,000,000
"Swing Line Loan" means a Loan made by a Swing Line Bank pursuant to
Section 2.4.
"Swing Line Note" means a promissory note substantially in the form of
Exhibit F hereto, duly executed and delivered to the Administrative Agent by the
Borrower and payable to the order of
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a Swing Line Bank in the amount of its Swing Line Commitment, including any
amendment, modification, renewal or replacement of such promissory note.
"Termination Event" means, with respect to a Plan which is subject to Title
IV of ERISA, (a) a Reportable Event, (b) the withdrawal of the Borrower or any
other member of the Controlled Group from such Plan during a plan year in which
the Borrower or any other member of the Controlled Group was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or was deemed such under
Section 4068(f) of ERISA, (c) the termination of such Plan, the filing of a
notice of intent to terminate such Plan or the treatment of an amendment of such
Plan as a termination under Section 4041 of ERISA, (d) the institution by the
PBGC of proceedings to terminate such Plan or (e) any event or condition which
might constitute grounds under Section 4042 of ERISA for the termination of, or
appointment of a trustee to administer, such Plan.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as an Alternate Base
Rate Advance, Swing Line Advance, Eurodollar Advance or Absolute Rate Advance.
"Unfunded Liability" means the amount (if any) by which the present value
of all vested and unvested accrued benefits under a Single Employer Plan exceeds
the fair market value of assets allocable to such benefits, all determined as of
the then most recent valuation date for such Plans using PBGC actuarial
assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Unrefunded Swing Line Loans" is defined in Section 2.4(d).
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.
ARTICLE II
THE FACILITY
------------
2.1. The Facility.
2.1.1. Description of Facility. The Lenders hereby establish in
favor of the Borrower a revolving credit facility pursuant to which, and upon
the terms and subject to the conditions herein set out:
(a) each Lender severally agrees to make Ratable Loans to the
Borrower in accordance with Section 2.2 in
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amounts not to exceed in the aggregate at any one time outstanding the
amount of its Commitment less (i) the amount of such Lender's pro-rata
share of the outstanding principal amount of all Competitive Bid Advances
(regardless of which Lender or Lenders made such Competitive Bid Advances)
exclusive of Competitive Bid Advances being repaid substantially
contemporaneously with the making of any such Ratable Loans and (ii) the
amount of such Lender's pro-rata share of the outstanding principal amount
of all Swing Line Advances (regardless of which Lender or Lenders made such
Swing Line Advances) exclusive of Swing Line Advances being repaid
substantially contemporaneously with the making of any such Ratable Loans;
(b) each Lender may, in its sole discretion, make bids to make
Competitive Bid Loans to the Borrower, and make such Loans, in accordance
with Section 2.3; and
(c) each Swing Line Bank agrees, severally and not jointly, to
make Swing Line Loans to the Borrower in accordance with Section 2.4.
2.1.2. Facility Amount. In no event may the aggregate principal
amount of all outstanding Advances (including the Ratable Advances, the Swing
Line Advances and the Competitive Bid Advances) at any time exceed the Aggregate
Commitment.
2.1.3. Availability of Facility. Subject to the terms of this
Agreement, from and including the date hereof to, but not including, the
Facility Termination Date, the Borrower may borrow, repay and reborrow Advances
hereunder. All outstanding Advances and all other unpaid Obligations shall be
due and payable in full by the Borrower on the Facility Termination Date and on
such date all remaining Commitments shall be deemed to have been reduced to
zero.
2.2. Ratable Advances.
2.2.1. Ratable Advances. Each Ratable Advance hereunder shall
consist of borrowings made from the several Lenders ratably in proportion to the
amounts of their respective Commitments. The Borrower's obligation to pay the
principal of, and interest on, the Ratable Advances shall be evidenced by the
Ratable Notes. Although the Ratable Notes shall be dated the date of the initial
Advance, interest in respect thereof shall be payable only for the periods
during which the Loans evidenced thereby are outstanding and, although the
stated amount of each Ratable Note shall be equal to the applicable Lender's
Commitment, each Ratable Note shall be enforceable, with respect to the
Borrower's obligation to pay the principal amount thereof, only to the extent of
the unpaid principal amount of the Ratable Loans at the time evidenced thereby.
2.2.2 Ratable Advance Rate Options. The Ratable
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Advances may be Alternate Base Rate Advances or Eurodollar Ratable Advances, or
a combination thereof, selected by the Borrower in accordance with Section 2.2.3
or 2.2.4. No Ratable Advance may mature after, or have an Interest Period which
extends beyond, the Facility Termination Date.
2.2.3. Method of Selecting Types and Interest Periods for Ratable
Advances. The Borrower shall select the Type of each Ratable Advance and, in the
case of each Eurodollar Ratable Advance, the Eurodollar Interest Period
applicable to such Ratable Advance from time to time. The Borrower shall give
the Administrative Agent irrevocable notice (a "Ratable Borrowing Notice") not
later than 10:00 a.m. (Chicago time) on the Borrowing Date of each Alternate
Base Rate Advance and three Business Days before the Borrowing Date for each
Eurodollar Ratable Advance. Notwithstanding the foregoing, a Ratable Borrowing
Notice for an Alternate Base Rate Advance may be given not later than 30 minutes
after the time which the Borrower is required to reject one or more bids offered
in connection with an Absolute Rate Auction pursuant to Section 2.3.6 and a
Ratable Borrowing Notice for a Eurodollar Ratable Advance may be given not later
than 30 minutes after the time the Borrower is required to reject one or more
bids offered in connection with a Eurodollar Auction pursuant to Section 2.3.6.
A Ratable Borrowing Notice shall specify:
(a) the Borrowing Date, which shall be a Business Day, of such
Ratable Advance;
(b) the aggregate amount of such Ratable Advance, which, when
added to all outstanding Ratable Advances, Swing Line Advances and
Competitive Bid Advances and after giving effect to the repayment of any
such outstanding Advances out of the proceeds of the requested Ratable
Advance, shall not exceed the Aggregate Commitment;
(c) the Type of Advance selected; and
(d) in the case of each Eurodollar Ratable Advance, the
Eurodollar Interest Period applicable thereto (which may not end after
the Facility Termination Date).
2.2.4. Conversion and Continuation of Outstanding Ratable
Advances. Alternate Base Rate Advances shall continue as Alternate Base Rate
Advances unless and until such Alternate Base Rate Advances are converted into
Eurodollar Ratable Advances. Each Eurodollar Ratable Advance shall continue as a
Eurodollar Ratable Advance until the end of the then applicable Eurodollar
Interest Period therefor, at which time such Eurodollar Ratable Advance shall be
automatically converted into an Alternate Base Rate Advance unless the Borrower
shall have given the Administrative Agent a Conversion/Continuation Notice
requesting that, at the end of such Eurodollar Interest Period, such Eurodollar
Ratable Advance continue as a Eurodollar Ratable Advance for the same or another
Eurodollar Interest Period.
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Subject to the terms of Section 2.7, the Borrower may elect from time to time to
convert all or any part of a Ratable Advance of any Type into any other Type or
Types of Ratable Advances; provided that any conversion of any Eurodollar
Ratable Advance shall be made on, and only on, the last day of the Eurodollar
Interest Period applicable thereto. The Borrower shall give the Administrative
Agent irrevocable notice (a "Conversion/Continuation Notice") of each conversion
of a Ratable Advance or continuation of a Eurodollar Ratable Advance not later
than 10:00 a.m. (Chicago time) at least three Business Days, in the case of a
conversion into or continuation of a Eurodollar Ratable Advance, prior to the
date of the requested conversion or continuation, specifying:
(a) the requested date, which shall be a Business Day, of such
conversion or continuation;
(b) the aggregate amount and Type of Ratable Advance which is to
be converted or continued; and
(c) the amount and Type(s) of Ratable Advance(s) into which such
Ratable Advance is to be converted or continued and, in the case of a
conversion into or continuation of an Eurodollar Ratable Advance, the
duration of the Eurodollar Interest Period applicable thereto.
2.3. Competitive Bid Advances.
2.3.1. Competitive Bid Option. In addition to Ratable Advances
pursuant to Section 2.2, but subject to the terms and conditions of this
Agreement (including, without limitation, the limitation set forth in Section
2.1.2 as to the maximum aggregate principal amount of all outstanding Advances
hereunder), prior to the Facility Termination Date the Borrower may, as set
forth in this Section 2.3, request the Lenders to make offers to make
Competitive Bid Advances to the Borrower. Each Lender may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this Section
2.3. The Borrower's obligation to pay the principal of, and interest on, the
Competitive Bid Advances shall be evidenced by the Competitive Bid Notes.
Although the Competitive Bid Notes shall be dated the date of the initial
Advance, interest in respect thereof shall be payable only for the periods
during which the Loans evidenced thereby are outstanding.
2.3.2. Competitive Bid Quote Request. When the Borrower wishes to
request offers to make Competitive Bid Loans under this Section 2.3, it shall
transmit to the Administrative Agent by telecopy a Competitive Bid Quote Request
substantially in the form of Exhibit C hereto so as to be received no later than
(a) 10:00 a.m. (Chicago time) at least five Business Days prior to the Borrowing
Date proposed therein, in the case of a Eurodollar Auction, or (b) 9:00 a.m.
(Chicago time) at least one Business Day prior to the Borrowing Date proposed
therein, in the
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case of an Absolute Rate Auction, specifying:
(a) the proposed Borrowing Date, which shall be a Business Day,
for the proposed Competitive Bid Advance;
(b) the aggregate principal amount of such Competitive Bid
Advance;
(c) whether the Competitive Bid Quotes requested are to set forth
a Eurodollar Bid Rate, an Absolute Rate, or both; and
(d) the Interest Period applicable thereto (which may not end
after the Facility Termination Date).
The Borrower may request offers to make Competitive Bid Loans for more than one
Interest Period in a single Competitive Bid Quote Request. No Competitive Bid
Quote Request shall be given within five Business Days (or such other number of
days as the Borrower and the Administrative Agent may agree) of any other
Competitive Bid Quote Request. A Competitive Bid Quote Request that does not
conform substantially to the format of Exhibit C hereto shall be rejected, and
the Administrative Agent shall promptly notify the Borrower of such rejection by
telecopy.
2.3.3. Invitation for Competitive Bid Quotes. Promptly and in any
event before the close of business on the same Business Day of receipt of a
Competitive Bid Quote Request that is not rejected pursuant to Section 2.3.2,
the Administrative Agent shall send to each of the Lenders by telex or telecopy
an Invitation for Competitive Bid Quotes substantially in the form of Exhibit D
hereto, which shall constitute an invitation by the Borrower to each Lender to
submit Competitive Bid Quotes offering to make the Competitive Bid Loans to
which such Competitive Bid Quote Request relates in accordance with this Section
2.3.
2.3.4. Submission and Contents of Competitive Bid Quotes.
(a) Each Lender may, in its sole discretion, submit a
Competitive Bid Quote containing an offer or offers to make Competitive Bid
Loans in response to any Invitation for Competitive Bid Quotes. Each
Competitive Bid Quote must comply with the requirements of this Section
2.3.4 and must be submitted to the Administrative Agent by telex or
telecopy at its offices specified in or pursuant to Article XIII not later
than (i) 9:00 a.m. (Chicago time) at least three Business Days prior to the
proposed Borrowing Date, in the case of a Eurodollar Auction or (ii) 9:00
a.m. (Chicago time) on the proposed Borrowing Date, in the case of an
Absolute Rate Auction (or, in either case, upon reasonable prior notice to
the Lenders, such earlier time and date as the Borrower and the
Administrative Agent may agree); provided that Competitive Bid Quotes
submitted by First
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Chicago may only be submitted if the Administrative Agent or First Chicago
notifies the Borrower of the terms of the offer or offers contained therein
not later than 15 minutes prior to the latest time at which the relevant
Competitive Bid Quotes must be submitted by the other Lenders. Subject to
Articles IV and VIII, any Competitive Bid Quote so made shall be
irrevocable except with the written consent of the Administrative Agent
given on the instructions of the Borrower.
(b) Each Competitive Bid Quote shall be in substantially the form of
Exhibit E hereto and shall in any case specify:
(i) the proposed Borrowing Date, which shall be the same as that
set forth in the applicable Invitation for Competitive Bid Quotes;
(ii) the principal amount of the Competitive Bid Loan for which
each such offer is being made, which principal amount a) may be
greater than, less than or equal to the Commitment of the quoting
Lender, b) must be at least $10,000,000 and an integral multiple of
$5,000,000, and c) may not exceed the principal amount of Competitive
Bid Loans for which offers were requested;
(iii) in the case of a Eurodollar Auction, the Competitive Bid
Margin offered for each such Competitive Bid Loan;
(iv) the minimum amount, if any, of the Competitive Bid Loan
which may be accepted by the Borrower;
(v) in the case of an Absolute Rate Auction, the Absolute Rate
offered for each such Competitive Bid Loan; and
(vi) the identity of the quoting Lender.
(c) The Administrative Agent shall reject any Competitive Bid Quote
that:
(i) is not substantially in the form of Exhibit E hereto or does
not specify all of the information required by Section 2.3.4(b);
(ii) contains qualifying, conditional or similar language, other
than any such language contained in Exhibit E hereto;
(iii) proposes terms other than or in addition to those set forth
in the applicable Invitation for Competitive Bid Quotes; or
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(iv) arrives after the time set forth in Section 2.3.4(a).
If any Competitive Bid Quote shall be rejected pursuant to this Section
2.3.4(c), then the Administrative Agent shall promptly notify the relevant
Lender of such rejection.
2.3.5. Notice to Borrower. The Administrative Agent shall promptly notify
the Borrower of the terms (a) of any Competitive Bid Quote submitted by a Lender
that is in accordance with Section 2.3.4 and (b) of any Competitive Bid Quote
that amends, modifies or is otherwise inconsistent with a previous Competitive
Bid Quote submitted by such Lender with respect to the same Competitive Bid
Quote Request. Any such subsequent Competitive Bid Quote shall be disregarded by
the Administrative Agent unless such subsequent Competitive Bid Quote
specifically states that it is submitted solely to correct a manifest error in
such former Competitive Bid Quote. The Administrative Agent's notice to the
Borrower shall specify the aggregate principal amount of Competitive Bid Loans
for which offers have been received for each Interest Period specified in the
related Competitive Bid Quote Request and the respective principal amounts and
Eurodollar Bid Rates or Absolute Rates, as the case may be, so offered.
2.3.6. Acceptance and Notice by Borrower. Not later than (a) 10:00 a.m.
(Chicago time) at least three Business Days prior to the proposed Borrowing
Date, in the case of a Eurodollar Auction or (b) 10:00 a.m. (Chicago time) on
the proposed Borrowing Date, in the case of an Absolute Rate Auction (or, in
either case, upon reasonable prior notice to the Lenders, such earlier time and
date as the Borrower and the Administrative Agent may agree), the Borrower shall
notify the Administrative Agent of its acceptance or rejection of the offers so
notified to it pursuant to Section 2.3.5; provided, however, that the failure by
the Borrower to give such notice to the Administrative Agent shall be deemed to
be a rejection of all such offers. In the case of acceptance, such notice (a
"Competitive Bid Borrowing Notice") shall specify the aggregate principal amount
of offers for each Interest Period that are accepted. The Borrower may accept
any Competitive Bid Quote in whole or in part (subject to the terms of Section
2.3.4(b)(iv)); provided that:
(a) the aggregate principal amount of each Competitive Bid Advance may
not exceed the applicable amount set forth in the related Competitive Bid
Quote Request,
(b) acceptance of offers may only be made on the basis of
ascending Eurodollar Bid Rates or Absolute Rates, as the case may be, and
(c) the Borrower may not accept any offer that is described in Section
2.3.4(c) or that otherwise fails to comply with the requirements of this
Agreement.
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2.3.7. Allocation by Administrative Agent. If offers are made by two or
more Lenders with the same Eurodollar Bid Rates or Absolute Rates, as the case
may be, for a greater aggregate principal amount than the amount in respect of
which offers are accepted for the related Interest Period, the principal amount
of Competitive Bid Loans in respect of which such offers are accepted shall be
allocated by the Administrative Agent among such Lenders as nearly as possible
(in such multiples, not greater than $1,000,000, as the Administrative Agent may
deem appropriate) in proportion to the aggregate principal amount of such
offers; provided, however, that no Lender shall be allocated a portion of any
Competitive Bid Advance which is less than the minimum amount which such Lender
has indicated that it is willing to accept. Allocations by the Administrative
Agent of the amounts of Competitive Bid Loans shall be conclusive in the absence
of manifest error. The Administrative Agent shall promptly, but in any event on
the same Business Day, notify each Lender of its receipt of a Competitive Bid
Borrowing Notice and the aggregate principal amount of such Competitive Bid
Advance allocated to each participating Lender.
2.4. Swing Line Advances.
(a) On the terms and subject to the conditions and relying upon the
representations and warranties herein set forth, each Swing Line Bank agrees,
severally and not jointly, at any time and from time to time from and including
the date hereof to but excluding the earlier of the Facility Termination Date
and the termination of the Commitments or the Swing Line Commitments, in
accordance with the terms hereof, to make Swing Line Loans to the Borrower in an
aggregate principal amount at any time outstanding not to exceed the lesser of
(i) the amount of the Swing Line Commitment of such Swing Line Bank at such time
and (ii) an amount equal to (A) the Aggregate Commitment at such time minus (B)
the sum of the aggregate principal amounts of all Ratable Loans, Competitive Bid
Loans and Swing Line Loans outstanding at such time. The Swing Line Loans
comprising each Swing Line Advance shall be made by the Swing Line Banks, at the
option of the Borrower, either (i) ratably at the Alternate Base Rate in
accordance with their Swing Line Commitments or (ii) either ratably or non-
ratably at the Alternate Swing Line Rate. All Swing Line Advances shall be in a
minimum amount of $1,000,000 and in any integral multiple of $500,000 if in
excess thereof. In no event shall any Swing Line Loan be made hereunder if (i)
the Administrative Agent and the Swing Line Banks shall have received notice
from the Majority Lenders prior to any such Swing Line Loan that a condition
specified in Section 4.1 or 4.2 has not been satisfied and (ii) such condition
shall not have been subsequently waived in compliance with Section 8.2.
(b) The Borrower shall give the Swing Line Banks (with a copy to the
Administrative Agent) telephonic, written or telecopy notice (in the case of
telephonic notice, such notice shall be promptly confirmed in writing or by
telecopy) not later than 1:00 p.m., Chicago time, on a day of a proposed Swing
Line
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Advance. Such notice shall be delivered on a Business Day, shall be irrevocable
and shall refer to this Agreement and shall specify the requested Borrowing Date
(which shall be a Business Day) and amount of such Swing Line Advance. Each
Swing Line Bank shall by 2:00 p.m., Chicago time, on the requested Borrowing
Date, make the requested Swing Line Loans by crediting the principal amount
thereof, in immediately available funds, to the account of the Borrower
maintained with such Swing Line Bank, unless such Advance shall not occur on
such date because any condition precedent herein specified shall not have been
met.
(c) Notwithstanding the occurrence of any Default or noncompliance with the
conditions precedent set forth in Article IV, if (i) any Swing Line Loans
aggregating $10,000,000 or more shall remain outstanding at 10:00 a.m., Chicago
time, on the fifth Business Day following the Borrowing Date thereof and if by
such time on such fifth Business Day the Administrative Agent shall have
received neither (A) a Ratable Borrowing Notice delivered by the Borrower
pursuant to Section 2.2.3 requesting that Ratable Loans be made pursuant to
Section 2.2 on the immediately succeeding Business Day in an amount at least
equal to the aggregate principal amount of such Swing Line Loans nor (B) any
other notice satisfactory to the Administrative Agent indicating the Borrower's
intent to repay all such Swing Line Loans on or before the immediately
succeeding Business Day with funds obtained from other sources, or (ii) on any
date either Swing Line Bank in its sole discretion shall so request with respect
to the outstanding Swing Line Loans, the Administrative Agent shall be deemed to
have received a Ratable Borrowing Notice from the Borrower pursuant to Section
2.2.3 requesting that a Ratable Advance of Alternate Base Rate Loans be made
pursuant to Section 2.2 on such immediately succeeding Business Day in an amount
equal to the aggregate amount of such Swing Line Loans, and the procedures set
forth in Section 2.5 shall be followed in making such Alternate Base Rate Loans,
provided that the proceeds of such Alternate Base Rate Loans received by the
Administrative Agent shall be immediately delivered to the Swing Line Banks and
applied to the direct repayment of such Swing Line Loans. Effective on the day
such Ratable Loans are made, the portion of the Swing Line Loans so paid shall
no longer be outstanding as Swing Line Loans and shall be outstanding as Ratable
Loans of the Lenders bearing interest at a rate determined by reference to the
Alternate Base Rate, in accordance with the provisions of this Article II. The
Borrower authorizes the Administrative Agent and each Swing Line Bank to charge
the Borrower's account maintained with such Swing Line Bank (up to the amount
available in such account) in order to immediately pay the amount of such Swing
Line Loans to the extent amounts received from the Lenders are not sufficient to
repay in full such Swing Line Loans. If any portion of any such amount paid (or
deemed paid) to the Swing Line Banks should be recovered by or on behalf of the
Borrower from the Swing Line Banks in the event of the bankruptcy or
reorganization of the Borrower or otherwise, the loss of the amount so recovered
shall be ratably shared among all Lenders in the manner contemplated by Section
11.2.
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(d) If, for any reason (including, without limitation, the occurrence of a
Default described in Section 7.6 or 7.7 of Article VII), Alternate Base Rate
Loans may not be, or are not, made pursuant to paragraph (c) of this Section 2.4
to repay Swing Line Loans as required by such paragraph, effective on the date
such Alternate Base Rate Loans would otherwise have been made, (i) each Lender
severally, unconditionally and irrevocably agrees that it shall, without regard
to the occurrence of any Default, purchase a participating interest in such
Swing Line Loans ("Unrefunded Swing Line Loans") in an amount equal to the
amount of Alternate Base Rate Loans which would otherwise have been made by such
Lender pursuant to paragraph (c) of this Section 2.4 and (ii) each Unrefunded
Swing Line Loan previously bearing interest at the Alternate Swing Line Rate
shall commence accruing interest at the Alternate Base Rate. Each Lender will
immediately transfer to the Administrative Agent, in immediately available
funds, the amount of its participation, and the proceeds of such participation
shall be distributed by the Administrative Agent to the Swing Line Banks in such
amount as will reduce the amount of the participating interest retained by the
Swing Line Banks in their Swing Line Loans to the amount of the Alternate Base
Rate Loans which were to have been made by the Swing Line Banks pursuant to
paragraph (c) of this Section 2.4. In the event a Lender fails to make available
to the Swing Line Banks the amount of such Lender's participation as provided in
this paragraph (d), the Swing Line Banks shall be entitled to recover such
amount on demand from such Lender together with interest at the customary rate
set by the Swing Line Banks for correction of errors among banks for one
Business Day and thereafter at the Alternate Base Rate then in effect. All
payments in respect of Unrefunded Swing Line Loans and participations therein
shall be made in accordance with Section 2.12.
(e) Each Lender's obligation to make Ratable Loans pursuant to paragraph
(c) of this Section 2.4 and to purchase participating interests pursuant to
paragraph (d) of this Section 2.4 shall be absolute and unconditional and shall
not be affected by any circumstance, including, without limitation, (i) any
setoff, counterclaim, recoupment, defense or other right which such Lender or
the Borrower may have against the Swing Line Banks, the Borrower or any other
Person, as the case may be, for any reason whatsoever; (ii) the occurrence or
continuance of a Default; (iii) any adverse change in the condition (financial
or otherwise) of the Borrower or any of its Subsidiaries; (iv) any breach of
this Agreement by the Borrower, any of its Subsidiaries or any Lender; or (v)
any other circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing.
2.5. Availability of Funds. Not later than noon (Chicago time) on each
Borrowing Date, each Lender (or in the case of a Competitive Bid Advance, each
Lender making a portion of such Advance) shall make available its Loan or Loans
(other than Swing Line Loans), in immediately available funds in Chicago, to the
Administrative Agent at its address specified pursuant to Article XIII. The
Administrative Agent shall, by 2:00 p.m. (Chicago
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time) on such Borrowing Date, make the funds so received from the Lenders
available to the Borrower by crediting the principal amount thereof, in
immediately available funds, to the account of the Borrower maintained with
First Chicago.
2.6. Facility Fee; Utilization Fee; Reductions in Aggregate Commitment.
(a) The Borrower agrees to pay to the Administrative Agent for the ratable
account of each Lender a facility fee equal to the Applicable Facility Fee
Percentage times such Lender's Commitment from the date hereof to and including
the Facility Termination Date, payable in arrears on each Payment Date hereafter
and on the Facility Termination Date.
(b) The Borrower agrees to pay to the Administrative Agent for the ratable
account of each Lender a utilization fee equal to the Applicable Utilization Fee
Percentage times such Lender's average daily principal amount of the Ratable
Loans and the Swing Line Loans outstanding during each calendar quarter from the
date hereof to the Facility Termination Date, payable in arrears on each Payment
Date hereafter and on the Facility Termination Date; provided, however, that in
the event the average daily principal amount of the Ratable Loans and the Swing
Line Loans outstanding during any calendar quarter is less than or equal to
33 1/3% of the Aggregate Commitment as in effect on the last day of such
quarter, no utilization fee shall be payable with respect to such quarter.
(c) The Borrower may permanently reduce the Aggregate Commitment in whole,
or in part ratably among the Lenders in a minimum aggregate amount of
$25,000,000, or any integral multiple of $5,000,000 in excess thereof, upon at
least three Business Days' written notice to the Administrative Agent, which
notice shall specify the amount of any such reduction; provided, however, that
the amount of the Aggregate Commitment may not be reduced below the aggregate
principal amount of the outstanding Advances. All accrued facility fees and
utilization fees shall be payable on the effective date of any termination of
the obligations of the Lenders to make Loans hereunder.
2.7. Minimum Amount of Each Advance. Each Advance (other than any Swing
Line Advance) shall be in the minimum amount of $10,000,000 (and in any integral
multiple of $5,000,000 if in excess thereof); provided, however, that (a) any
Alternate Base Rate Advance may be in the amount of the unused Aggregate
Commitment and (b) in no event shall more than six Eurodollar Advances be
permitted to be outstanding at any time.
2.8. Optional Principal Payments. The Borrower may from time to time pay,
without penalty or premium, all outstanding Ratable Advances or, in a minimum
aggregate amount of $10,000,000 or any integral multiple of $5,000,000 in excess
thereof, any portion of the outstanding Ratable Advances upon one Business Day's
prior notice to the Administrative Agent in the case of an Alternate Base Rate
Advance and upon three Business Days' prior notice to
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the Administrative Agent in the case of a Eurodollar Advance. Any prepayment of
a Eurodollar Advance prior to the last day of the applicable Eurodollar Interest
Period shall be subject to the indemnity provisions of Section 3.4. Competitive
Bid Advances may not be voluntarily prepaid.
2.9. Mandatory Prepayments. If at any time the aggregate principal balance
of the Loans exceeds the Aggregate Commitment, the Borrower shall repay
immediately its then outstanding Loans in such amount as may be necessary to
eliminate such excess.
2.10. Changes in Interest Rate, etc. Each Alternate Base Rate Advance shall
bear interest at the Alternate Base Rate from and including the date of such
Advance or the date on which such Advance was converted into an Alternate Base
Rate Advance to (but not including) the date on which such Alternate Base Rate
Advance is paid or converted to a Eurodollar Ratable Advance. Changes in the
rate of interest on that portion of any Advance maintained as an Alternate Base
Rate Advance will take effect simultaneously with each change in the Alternate
Base Rate. Each Eurodollar Ratable Advance and Absolute Rate Advance shall bear
interest from and including the first day of the Interest Period applicable
thereto to, but not including, the last day of such Interest Period at the
interest rate determined as applicable to such Eurodollar Ratable Advance or
Absolute Rate Advance. No Interest Period may end after the Facility Termination
Date.
2.11. Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.2.3 and 2.2.4, no Advance may be made as,
converted into or continued as a Eurodollar Ratable Advance (except with the
consent of the Administrative Agent and the Majority Lenders) when any Default
or Unmatured Default has occurred and is continuing. During the continuance of a
Default, each Eurodollar Advance, Absolute Rate Advance and Alternate Base Rate
Advance shall bear interest (for the remainder of the applicable Interest Period
in the case of Eurodollar Advances and Absolute Rate Advances) at the rate
otherwise applicable plus two percent (2%) per annum.
2.12. Method of Payment. All payments of the Obligations hereunder shall be
made, without setoff, deduction or counterclaim, in immediately available funds
to the Administrative Agent at the Administrative Agent's address specified
pursuant to Article XIII, or at any other Lending Installation of the
Administrative Agent specified in writing by the Administrative Agent to the
Borrower, by noon (Chicago time) on the date when due and shall be applied
ratably by the Administrative Agent among the applicable Lenders. Each payment
delivered to the Administrative Agent for the account of any Lender shall be
delivered promptly by the Administrative Agent to such Lender in the same type
of funds that the Administrative Agent received at its address specified
pursuant to Article XIII or at any Lending Installation specified in a notice
received by the Administrative Agent from such Lender. The Administrative
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Agent is hereby authorized to charge the account of the Borrower maintained
with First Chicago for each payment of principal, interest and fees as it
becomes due hereunder.
2.13. Notes; Telephonic Notices. Each Lender is hereby authorized to
record the principal amount of each of its Loans and each repayment on the
schedule attached to its Note; provided, however, that neither the failure to
so record nor any error in such recordation shall affect the Borrower's
obligations under such Note. The Borrower hereby authorizes the Lenders and
the Administrative Agent to extend, convert or continue Advances, effect
selections of Types of Advances, submit Competitive Bid Quotes and to transfer
funds based on telephonic notices made by any person or persons the
Administrative Agent or any Lender in good faith believes to be acting on
behalf of the Borrower. The Borrower agrees to deliver promptly to the
Administrative Agent a written confirmation, if such confirmation is requested
by the Administrative Agent or any Lender, of each telephonic notice signed by
an Authorized Officer. If the written confirmation differs in any material
respect from the action taken by the Administrative Agent and the Lenders, the
records of the Administrative Agent and the Lenders shall govern absent
manifest error.
2.14. Interest Payment Dates; Interest and Fee Basis. Interest accrued
on each Alternate Base Rate Advance shall be payable on each Payment Date,
commencing with the first such date to occur after the date hereof, on any
date on which an Alternate Base Rate Advance is prepaid, whether due to
acceleration or otherwise, and at maturity. Interest accrued on that portion
of the outstanding principal amount of any Alternate Base Rate Advance
converted into a Eurodollar Ratable Advance on a day other than a Payment Date
shall be payable on the date of conversion. Interest accrued on each
Eurodollar Advance or Absolute Rate Advance shall be payable on the last day
of its applicable Interest Period, on any date on which the Eurodollar Advance
or Absolute Rate Advance is prepaid, whether by acceleration or otherwise, and
at maturity. Interest accrued on each Eurodollar Advance or Absolute Rate
Advance having an Interest Period longer than three months shall also be
payable on the last day of each three-month interval during such Interest
Period. Interest, facility and utilization fees shall be calculated for
actual days elapsed on the basis of a 360-day year. Interest shall be payable
for the day an Advance is made but not for the day of any payment on the
amount paid if payment is received prior to noon (Chicago time) at the place
of payment. If any payment shall be received by the Administrative Agent
later than noon (Chicago time), such payment shall be deemed to have been
received on the next succeeding Business Day and, in the case of a principal
payment, such extension of time shall be included in computing interest and
utilization fees in connection with such payment. If any payment shall become
due on a day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and, in the case of a principal payment, such
extension of time shall be included in computing
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interest and utilization fees in connection with such payment.
2.15. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Administrative
Agent will notify each Lender of the contents of each Aggregate Commitment
reduction notice, Ratable Borrowing Notice, Conversion/Continuation Notice,
Invitation for Competitive Quotes and repayment notice received by it
hereunder. The Administrative Agent will notify each Lender of the interest
rate applicable to each Eurodollar Advance promptly upon determination of such
interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate.
2.16. Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to
any such Lending Installation and the Notes shall be deemed held by each
Lender for the benefit of such Lending Installation. Each Lender may, by
written or telex notice to the Administrative Agent and the Borrower,
designate a Lending Installation through which Loans will be made by it and
for whose account Loan payments are to be made.
2.17. Non-Receipt of Funds by the Administrative Agent. Unless the
Borrower or a Lender, as the case may be, notifies the Administrative Agent
prior to the date on which it is scheduled to make payment to the
Administrative Agent of (a) in the case of a Lender, the proceeds of a Loan,
or (b) in the case of the Borrower, a payment of principal, interest or fees
to the Administrative Agent for the account of the Lenders, that it does not
intend to make such payment, the Administrative Agent may assume that such
payment has been made. The Administrative Agent may, but shall not be
obligated to, make the amount of such payment available to the intended
recipient in reliance upon such assumption. If the Borrower has not in fact
made such payment to the Administrative Agent, the Lenders shall, on demand by
the Administrative Agent, repay to the Administrative Agent the amount so made
available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the
Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to the Federal Funds Effective Rate for each
such day. If any Lender has not in fact made such payment to the
Administrative Agent, such Lender or the Borrower shall, on demand by the
Administrative Agent, repay to the Administrative Agent the amount so made
available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the
Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to (a) in the case of payment by a Lender,
the Federal Funds Effective Rate for each such day, or (b) in the case of
payment by the Borrower, the interest rate applicable to the relevant Loan.
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2.18. Taxes.
(a) Any payments made by the Borrower under this Agreement shall be
made free and clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority,
excluding net income taxes and franchise taxes or any other tax based upon any
income imposed on the Administrative Agent or any Lender by the jurisdiction
in which the Administrative Agent or such Lender is incorporated or has its
principal place of business. If any such non-excluded taxes, levies, imposts,
duties, charges, fees, deductions or withholdings ("Non-Excluded Taxes") are
required to be withheld from any amounts payable to the Administrative Agent
or any Lender hereunder, the amounts so payable to the Administrative Agent or
such Lender shall be increased to the extent necessary to yield to the
Administrative Agent or such Lender (after payment of all Non-Excluded Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in or pursuant to this Agreement; provided, however, that
the Borrower shall not be required to increase any such amounts payable to any
Lender that is not organized under the laws of the U.S. or a state thereof if
such Lender fails to comply with the requirements of paragraph (b) of this
Section 2.18. Whenever any Non-Excluded Taxes are payable by the Borrower, as
promptly as practicable thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of such Lender, as
the case may be, a certified copy of an original official receipt received by
the Borrower showing payment thereof. If the Borrower fails to pay any Non-
Excluded Taxes when due to the appropriate taxing authority or fails to remit
to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Administrative Agent
and the Lenders for any incremental taxes, interest or penalties that may
become payable by any Administrative Agent or any Lender as a result of any
such failure. The agreements in this Section 2.18 shall survive the
termination of this Agreement and the payment of all other amounts payable
hereunder.
(b) At least five Business Days prior to the first date on which
interest or fees are payable hereunder for the account of any Lender, each
Lender that is not incorporated under the laws of the United States of
America, or a state thereof, agrees that it will deliver to each of the
Borrower and the Administrative Agent two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224, certifying in either case
that such Lender is entitled to receive payments under this Agreement and the
Notes without deduction or withholding of any United States federal income
taxes. Each Lender which so delivers a Form 1001 or 4224 further undertakes
to deliver to each of the Borrower and the Administrative Agent two additional
copies of such form (or a successor form) on or before the date
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that such form expires (currently, three successive calendar years for Form
1001 and one calendar year for Form 4224) or becomes obsolete or after the
occurrence of any event requiring a change in the most recent forms so
delivered by it, and such amendments thereto or extensions or renewals thereof
as may be reasonably requested by the Borrower or the Administrative Agent, in
each case certifying that such Lender is entitled to receive payments under
this Agreement and the Notes without deduction or withholding of any United
States federal income taxes, unless an event (including, without limitation,
any change in treaty, law or regulation) has occurred prior to the date on
which any such delivery would otherwise be required which renders all such
forms inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender advises the
Borrower and the Administrative Agent that it is not capable of receiving
payments without any deduction or withholding of United States federal income
tax.
2.19. Administrative Agent's Fees. The Borrower shall pay to the
Administrative Agent those fees, in addition to the facility fees and
utilization fees referenced in Section 2.6(a) and 2.6(b), in the amounts and
at the times separately agreed to between the Administrative Agent and the
Borrower.
ARTICLE III
CHANGE IN CIRCUMSTANCES
-----------------------
3.1. Yield Protection. If, after the date hereof, the adoption of or any
change in any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
interpretation thereof, or the compliance of any Lender therewith,
(a) subjects any Lender or any applicable Lending Installation to any
tax, duty, charge or withholding on or from payments due from the Borrower
(excluding taxation of the overall net income of any Lender or applicable
Lending Installation imposed by the jurisdiction in which such Lender or Lending
Installation is incorporated or has its principal place of business), or changes
the basis of taxation of principal, interest or any other payments to any Lender
or Lending Installation in respect of its Loans or other amounts due it
hereunder, or
(b) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and assessments taken
into account in determining the interest rate applicable to Eurodollar
Advances), or
(c) imposes any other condition the result of which is
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to increase the cost to any Lender or any applicable Lending Installation of
making, funding or maintaining Loans or reduces any amount receivable by any
Lender or any applicable Lending Installation in connection with any Loans, or
requires any Lender or any applicable Lending Installation to make any payment
calculated by reference to the amount of Loans held, or interest received by
it, by an amount deemed material by such Lender,
then, within 15 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or resulting in an
amount received which such Lender determines is attributable to making,
funding and maintaining its Loans and its Commitment.
3.2. Changes in Capital Adequacy Regulations. If a Lender determines the
amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change, then, within 15 days of demand by such
Lender, the Borrower shall pay such Lender the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased
capital which such Lender determines is attributable to this Agreement, its
Loans or its obligation to make Loans hereunder (after taking into account
such Lender's policies as to capital adequacy). "Change" means (a) any change
after the date of this Agreement in the Risk-Based Capital Guidelines, or (b)
any adoption of or change in any law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender or any
Lending Installation or any corporation controlling any Lender. "Risk-Based
Capital Guidelines" means (a) the risk-based capital guidelines in effect in
the United States on the date of this Agreement and (b) the corresponding
capital regulations promulgated by regulatory authorities outside the United
States implementing the July 1988 report of the Basle Committee on Banking
Regulation and Supervisory Practices entitled "International Convergence of
Capital Measurements and Capital Standards" and any amendments to such
regulations adopted prior to the date of this Agreement. Notwithstanding the
foregoing, no Lender shall be entitled to demand compensation pursuant to this
Section 3.2 if it shall not be the general practice of such Lender to demand
such compensation in similar circumstances under comparable provisions of
comparable credit agreements.
3.3. Availability of Types of Advances. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Majority Lenders determine that (a)
deposits of a type and maturity appropriate to match fund Eurodollar Advances
are not available, or (b) the interest rate applicable to a Type of Advance
does not accurately or fairly reflect the cost of making or maintaining such
Advance, then the Administrative Agent shall
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suspend the availability of the affected Type of Advance until such
circumstance no longer exists and require any Eurodollar Advances of the
affected Type to be repaid.
3.4. Funding Indemnification. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, the Borrower will indemnify the Administrative
Agent and each Lender for any loss or cost incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain the Eurodollar Advance.
3.5. Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Advances to reduce any liability of the Borrower to
such Lender under Sections 3.1 and 3.2 or to avoid the unavailability of a
Type of Advance under Section 3.3, so long as such designation is not
disadvantageous to such Lender. Each Lender shall deliver a written statement
of such Lender to the Borrower (with a copy to the Administrative Agent) as to
the amount due, if any, under Section 3.1, 3.2 or 3.4. Such written statement
shall set forth in reasonable detail the calculations upon which such Lender
determined such amount and shall be final, conclusive and binding on the
Borrower in the absence of manifest error. Determination of amounts payable
under such Sections in connection with a Eurodollar Advance shall be
calculated as though each Lender funded its Eurodollar Advances through the
purchase of a deposit of the type and maturity corresponding to the deposit
used as a reference in determining the Eurodollar Rate applicable to such
Loan, whether in fact that is the case or not. The amount specified in the
written statement of any Lender shall be payable on demand after receipt by
the Borrower of the written statement; provided, however, that no amount shall
be payable by the Borrower pursuant to Section 3.1, 3.2 or 3.4 with respect to
any period commencing more than 120 days before the delivery of the written
statement contemplated by this Section 3.5. The obligations of the Borrower
under Sections 3.1, 3.2 and 3.4 shall survive payment of the Obligations and
termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
4.1. Initial Loans. The Lenders shall not be required to make the
initial Advance hereunder unless the Borrower has furnished the following to
the Administrative Agent with sufficient copies for the Lenders and the other
conditions set forth below have been satisfied, in each case on or before July
1, 1996:
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(a) Charter Documents; Good Standing Certificates. Copies of the
certificate of incorporation of the Borrower, together with all amendments
thereto, certified by the appropriate governmental officer in its jurisdiction
of incorporation, together with a good standing certificate issued by the
Secretary of State of the jurisdiction of its incorporation and such other
jurisdictions as shall be requested by the Administrative Agent.
(b) By-Laws and Resolutions. Copies, certified by the Secretary or
Assistant Secretary of the Borrower, of its by-laws and of its Board of
Directors' resolutions authorizing the execution, delivery and performance of
the Loan Documents to which the Borrower is a party.
(c) Secretary's Certificate. An incumbency certificate, executed by
the Secretary or Assistant Secretary of the Borrower, which shall identify by
name and title and bear the signature of the officers of the Borrower
authorized to sign the Loan Documents and to make borrowings hereunder, upon
which certificate the Administrative Agent and the Lenders shall be entitled
to rely until informed of any change in writing by the Borrower.
(d) Officer's Certificate. A certificate, dated the date hereof,
signed by an Authorized Officer of the Borrower, in form and substance
satisfactory to the Administrative Agent, to the effect that: (i) on such date
(both before and after giving effect to the making of any Loans hereunder), no
Default or Unmatured Default has occurred and is continuing; (ii) no
injunction or temporary restraining order which would prohibit the making of
the Loans or the consummation of any of the other transactions contemplated
hereby (collectively, including the making of the Loans, the "Closing
Transactions"), or other litigation which could reasonably be expected to have
a Material Adverse Effect is pending or, to the best of such Person's
knowledge, threatened; (iii) each of the representations and warranties set
forth in Article V of this Agreement is true and correct on and as of such
date; and (iv) since December 31, 1995, no event or change has occurred that
has caused or evidences a Material Adverse Effect.
(e) Legal Opinions. A written opinion of each of (i) Briggs and
Morgan, counsel to the Borrower, substantially in the form of Exhibit G-1
hereto, and (ii) Joel H. Gottesman, general counsel of the Borrower,
substantially in the form of Exhibit G-2 hereto, addressed to the
Administrative Agent and the Lenders.
(f) Notes. Notes payable to the order of each of the Lenders duly
executed by the Borrower.
(g) Loan Documents. Executed originals of this Agreement and each
of the Loan Documents, which shall be in full force and effect, together with
all schedules, exhibits,
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certificates, instruments, opinions, documents and financial statements
required to be delivered pursuant hereto and thereto.
(h) Letters of Direction. Written money transfer instructions with
respect to the initial Advances and to future Advances in the form of Exhibit
J hereto addressed to the Administrative Agent and signed by an Authorized
Officer, together with such other related money transfer authorizations as the
Administrative Agent may have reasonably requested.
(i) Other. Such other documents as the Administrative Agent, any
Lender or their counsel may have reasonably requested.
4.2. Each Future Advance. The Lenders shall not be required to make any
Advance unless on the applicable Borrowing Date:
(a) There exists no Default or Unmatured Default and none would
result from such Advance;
(b) The representations and warranties contained in Article V (other
than Section 5.6) are true and correct as of such Borrowing Date;
(c) A Ratable Borrowing Notice or Competitive Bid Quote Request
shall have been properly submitted; and
(d) All legal matters incident to the making of such Advance shall
be satisfactory to the Lenders and their counsel.
Each Ratable Borrowing Notice and Competitive Bid Quote Request with
respect to each such Advance shall constitute a representation and warranty by
the Borrower that the conditions contained in Section 4.2 have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower represents and warrants to the Lenders that, both before and
after giving effect to the Closing Transactions:
5.1. Corporate Existence and Standing. Each of the Borrower and each
Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation and is
duly qualified and in good standing as a foreign corporation and is duly
authorized to conduct its business in each jurisdiction in which its business
is conducted or proposed to be conducted except where the failure to be so
qualified or authorized may not reasonably be expected to have a Material
Adverse Effect.
5.2. Authorization and Validity. The Borrower has all requisite power
and authority (corporate and otherwise) and legal
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right to execute and deliver (or file, as the case may be) each of the Loan
Documents and to perform its obligations thereunder. The execution and
delivery by the Borrower of the Loan Documents and the performance of its
obligations thereunder have been duly authorized by proper corporate
proceedings and the Loan Documents constitute legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance
with their terms, except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally.
5.3. Compliance with Laws and Contracts. The Borrower and its
Subsidiaries have complied in all material respects with all applicable
statutes, rules, regulations, orders and restrictions of any domestic or
foreign government or any instrumentality or agency thereof, having
jurisdiction over the conduct of their respective businesses or the ownership
of their respective properties, except where the failure to so comply could
not reasonably be expected to have a Material Adverse Effect. Neither the
execution and delivery by the Borrower of the Loan Documents, the application
of the proceeds of the Loans or the consummation of the Closing Transactions,
nor compliance with the provisions of the Loan Documents, or at the relevant
time did, (a) violate any law, rule, regulation (including Regulations G, T, U
and X), order, writ, judgment, injunction, decree or award binding on the
Borrower or any Subsidiary or the Borrower's or any Subsidiary's charter,
articles or certificate of incorporation or by-laws, (b) violate the
provisions of or require the approval or consent of any party to any
indenture, instrument or agreement to which the Borrower or any Subsidiary is
a party or is subject, or by which it, or its property, is bound, or conflict
with or constitute a default thereunder, or result in the creation or
imposition of any Lien (other than Liens permitted by, the Loan Documents) in,
of or on the property of the Borrower or any Subsidiary pursuant to the terms
of any such indenture, instrument or agreement, or (c) require any consent of
the stockholders of any Person, except for approvals or consents which will be
obtained on or before the initial Advance and are disclosed on Schedule 5.3,
except for any violation of, or failure to obtain an approval or consent
required under, any such indenture, instrument or agreement that could not
reasonably be expected to have a Material Adverse Effect.
5.4. Governmental Consents. No order, consent, approval, qualification,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, or other action in respect of, any Governmental
Authority, any securities exchange or other Person is or at the relevant time
was required to authorize, or is or at the relevant time was required in
connection with the execution, delivery, consummation or performance of, or
the legality, validity, binding effect or enforceability of, any of the Loan
Documents, the application of the proceeds of the Loans or any other
transaction contemplated
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in the Loan Documents.
5.5. Financial Statements. The Borrower has heretofore furnished to each of
the Lenders the December 31, 1995 audited consolidated financial statements of
the Borrower and its Subsidiaries (the "Financial Statements"). Each of the
Financial Statements was prepared in accordance with Agreement Accounting
Principles and fairly presents the consolidated financial condition and
operations of the Borrower and its Subsidiaries at such date and the
consolidated results of their operations for the period then ended.
5.6. Material Adverse Change. No material adverse change in the business,
Property, condition (financial or otherwise), performance, prospects or results
of operations of the Borrower and its Subsidiaries taken as a whole has occurred
since December 31, 1995.
5.7. Taxes. The Borrower and its Subsidiaries have filed or caused to be
filed on a timely basis and in correct form all United States federal and
applicable foreign, state and local tax returns and all other tax returns which
are required to be filed and have paid all taxes due pursuant to said returns or
pursuant to any assessment received by the Borrower or any Subsidiary, except
such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided in accordance with Agreement Accounting
Principles and as to which no Lien prohibited by Section 6.10 exists. As of the
date hereof, the United States income tax returns of the Borrower on a
consolidated basis have been audited by the Internal Revenue Service through its
Fiscal Year ending December 31, 1991, and there are no pending audits or
investigations regarding the Borrower's or its Subsidiaries' federal, foreign,
state or local tax returns. No tax liens have been filed and no claims are being
asserted with respect to any such taxes which could reasonably be expected to
have a Material Adverse Effect. The charges, accruals and reserves on the books
of the Borrower and its Subsidiaries in respect of any taxes or other
governmental charges are in accordance with Agreement Accounting Principles.
5.8. Litigation and Contingent Obligations. There is no litigation,
arbitration, proceeding, inquiry or governmental investigation (including,
without limitation, by the Federal Trade Commission) pending or, to the
knowledge of any of their officers, threatened against or affecting the Borrower
or any Subsidiary or any of their respective properties which could reasonably
be expected to have a Material Adverse Effect or to prevent, enjoin or unduly
delay the making of the Loans under this Agreement. Neither the Borrower nor any
Subsidiary has any material contingent obligations except as set forth on
Schedule 5.8.
5.9. Subsidiaries. Schedule 5.9 hereto contains an accurate list of all of
the existing Subsidiaries as of the date of this
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Agreement, setting forth their respective jurisdictions of incorporation and the
percentage of their capital stock owned by the Borrower or other Subsidiaries.
5.10. ERISA. Except as disclosed on Schedule 5.10, neither the Borrower nor
any other member of the Controlled Group maintains any Single Employer Plans,
and no Single Employer Plan has any Unfunded Liability. Neither the Borrower nor
any other member of the Controlled Group maintains, or is obligated to
contribute to, any Multiemployer Plan or has incurred, or is reasonably expected
to incur, any withdrawal liability to any Multiemployer Plan. Each Plan complies
in all material respects with all applicable requirements of law and
regulations. Neither the Borrower nor any member of the Controlled Group has,
with respect to any Plan, failed to make any contribution or pay any amount
required under Section 412 of the Code or Section 302 of ERISA or the terms of
such Plan. There are no pending or, to the knowledge of the Borrower, threatened
claims, actions, investigations or lawsuits against any Plan, any fiduciary
thereof, or the Borrower or any member of the Controlled Group with respect to a
Plan. Neither the Borrower nor any member of the Controlled Group has engaged in
any prohibited transaction (as defined in Section 4975 of the Code or Section
406 of ERISA) in connection with any Plan which would subject such Person to any
material liability. Within the last five years neither the Borrower nor any
member of the Controlled Group has engaged in a transaction which resulted in a
Single Employer Plan with an Unfunded Liability being transferred out of the
Controlled Group. No Termination Event has occurred or is reasonably expected to
occur with respect to any Plan which is subject to Title IV of ERISA.
5.11. Defaults. No Default or Unmatured Default has occurred and is
continuing.
5.12. Federal Reserve Regulations. Neither the Borrower nor any Subsidiary
is engaged, directly or indirectly, principally, or as one of its important
activities, in the business of extending, or arranging for the extension of,
credit for the purpose of purchasing or carrying Margin Stock. No part of the
proceeds of any Loan will be used in a manner which would violate, or result in
a violation of, Regulation G, Regulation T, Regulation U or Regulation X.
Neither the making of any Advance hereunder nor the use of the proceeds thereof
will violate or be inconsistent with the provisions of Regulation G, Regulation
T, Regulation U or Regulation X.
5.13. Investment Company; Public Utility Holding Company Act. Neither the
Borrower nor any Subsidiary is, or after giving effect to any Advance will be,
an "investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended. Neither
the Borrower nor any Subsidiary is a "holding company" or a "subsidiary company"
of a "holding company", or an "affiliate"
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of a "holding company" or of a "subsidiary company" of a "holding company",
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
5.14. Disclosure. None of the (a) information, exhibits or reports
furnished or to be furnished by the Borrower or any Subsidiary to the
Administrative Agent or to any Lender in connection with the negotiation of the
Loan Documents, or (b) representations or warranties of the Borrower contained
in this Agreement, the other Loan Documents, or any other document, certificate
or written statement furnished to the Administrative Agent or the Lenders by or
on behalf of the Borrower for use in connection with the transactions
contemplated by this Agreement, contained, contains or will contain any untrue
statement of a material fact or omitted, omits or will omit to state a material
fact necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. There is
no fact known to the Borrower (other than matters of a general economic nature)
that has had or could reasonably be expected to have a Material Adverse Effect
and that has not been disclosed herein or in such other documents, certificates
and statements furnished to the Lenders for use in connection with the
transactions contemplated by this Agreement.
ARTICLE VI
COVENANTS
---------
During the term of this Agreement, unless the Majority Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with generally accepted accounting principles, consistently applied, and furnish
to the Lenders:
(a) As soon as practicable and in any event within 90 days after the
close of each of its Fiscal Years, an unqualified audit report certified by KPMG
Peat Marwick or other independent certified public accountants, acceptable to
the Lenders, prepared in accordance with Agreement Accounting Principles on a
consolidated basis for itself and its Subsidiaries, including balance sheets as
of the end of such period and related statements of income, retained earnings
and cash flows.
(b) As soon as practicable and in any event within 60 days after the
close of the first three Fiscal Quarters of each of its Fiscal Years, for itself
and its Subsidiaries, consolidated unaudited balance sheets as at the close of
each such period and consolidated statements of income, retained earnings and
cash flows for the period from the beginning of such Fiscal Year to the end of
such quarter, all certified by its
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chief financial officer or treasurer and prepared in accordance with Agreement
Accounting Principles.
(c) concurrently with any delivery of financial statements under (a)
or (b) above, a certificate of the chief financial officer or treasurer of the
Borrower, substantially in the form of Exhibit H hereto, opining on or
certifying such statements (i) certifying that no Default or Unmatured Default
has occurred or, if such Default or Unmatured Default has occurred, specifying
the nature and extent thereof and any corrective action taken or proposed to be
taken with respect thereto and (ii) setting forth computations in reasonable
detail satisfactory to the Administrative Agent demonstrating compliance with
the covenants contained in Section 6.12.1, 6.12.2 and 6.12.3;
(d) As soon as possible and in any event within ten days after the
Borrower knows that any Termination Event has occurred with respect to any Plan,
a statement, signed by the chief financial officer or treasurer of the Borrower,
describing said Termination Event and the action which the Borrower proposes to
take with respect thereto.
(e) Promptly upon the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy statements so
furnished.
(f) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports which the
Borrower or any of its Subsidiaries files with the Securities and Exchange
Commission.
(g) Such other information (including non-financial information) as
the Administrative Agent or any Lender may from time to time reasonably request.
6.2. Use of Proceeds. The Borrower will, and will cause each Subsidiary to,
use the proceeds of the Advances to meet the general corporate needs, including
commercial paper backup, of the Borrower and its Subsidiaries. The Borrower will
not, nor will it permit any Subsidiary to, use any of the proceeds of the
Advances to purchase or carry any "margin stock" (as defined in Regulation U) or
to finance the Purchase of any Person which has not been approved and
recommended by the board of directors (or functional equivalent thereof) of such
Person.
6.3. Notice of Default. The Borrower will give prompt notice in writing to
the Lenders of the occurrence of (a) any Default or Unmatured Default and (b) of
any other event or development, financial or other, relating specifically to the
Borrower or any of its Subsidiaries (and not of a general economic or political
nature) which could reasonably be expected to have a Material Adverse Effect.
6.4. Conduct of Business. The Borrower will, and will cause
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each Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and to do all things necessary to remain duly incorporated, validly
existing and in good standing as a domestic corporation in its jurisdiction of
incorporation and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted, except where failure to
maintain such authority could not reasonably be expected to have a Material
Adverse Effect.
6.5. Taxes. The Borrower will, and will cause each Subsidiary to, timely
file complete and correct United States federal and applicable foreign, state
and local tax returns required by applicable law and pay when due all taxes,
assessments and governmental charges and levies upon it or its income, profits
or Property, except those which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been set aside.
6.6. Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws (including ERISA), rules, regulations,
orders, writs, judgments, injunctions, decrees or awards to which it may be
subject, the failure to comply with which could reasonably be expected to have a
Material Adverse Effect.
6.7. Maintenance of Properties. The Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times.
6.8. Inspection. The Borrower will, and will cause each Subsidiary to,
permit the Administrative Agent and the Lenders, by their respective
representatives and agents, to inspect any of the Property, corporate books and
financial records of the Borrower and each Subsidiary, to examine and make
copies of the books of accounts and other financial records of the Borrower and
each Subsidiary, and to discuss the affairs, finances and accounts of the
Borrower and each Subsidiary with, and to be advised as to the same by, their
respective officers at such reasonable times and intervals as the Lenders may
designate. The Borrower will keep or cause to be kept, and cause each Subsidiary
to keep or cause to be kept, appropriate records and books of account in which
complete entries are to be made reflecting its and their business and financial
transactions, such entries to be made in accordance with Agreement Accounting
Principles consistently applied.
6.9. Mergers, Sales of Assets, etc.
(a) The Borrower will not consolidate with or merge into any other
corporation or convey, transfer or lease its Property
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substantially as an entirety to any Person, unless:
(i) the corporation formed by such consolidation or into which the
Borrower is merged or the Person which acquires by conveyance or
transfer, or which leases, the Property of the Borrower substantially as
an entirety shall be a corporation organized and existing under the laws
of the United States of America or any state or the District of Columbia
and shall expressly assume, by an agreement supplemental hereto, executed
and delivered to each other party hereto, in form satisfactory to the
Administrative Agent, the due and punctual payment of the Obligations and
the performance or observance of every covenant of this Agreement on the
part of the Borrower to be performed or observed;
(ii) immediately after giving effect to such transaction, no
Default or Unmatured Default shall have occurred and be continuing; and
(iii) the Borrower shall have delivered to the Administrative Agent
an officer's certificate and an opinion of counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and such
supplemental agreement comply with this paragraph (a) and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
(b) Upon any consolidation by the Borrower with or merger by the Borrower
into any other corporation or any conveyance, transfer or lease of the
Property of the Borrower substantially as an entirety in accordance with
paragraph (a) above, the successor corporation formed by such consolidation or
into which the Borrower is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Borrower under the Loan Documents with the same effect
as if such successor corporation had been named as the Borrower herein.
6.10. Liens. The Borrower will not, nor will it permit any Subsidiary
to, create, incur or assume any Lien on the Property of the Borrower or any
Subsidiary to secure any obligation incurred, issued, assumed or guaranteed by
the Borrower or any Subsidiary, except:
(a) any Lien existing on any Property or shares of stock of a
corporation at the time the corporation becomes a Subsidiary or merges
into or consolidates with the Borrower or any Subsidiary;
(b) any Lien existing on any Property at the time the Borrower or
any Subsidiary acquires such property; provided, however, that such Lien
may not extend to any other Property owned by the Borrower or any
Subsidiary at the time (or
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after the time) such Lien is created, incurred or assumed;
(c) any Lien securing Indebtedness incurred to finance all or part
of the purchase price or cost of construction of Property of the Borrower
or any Subsidiary; provided that (i) such Lien does not extend to any
other Property owned by the Borrower or any Subsidiary at the time (or
after the time) the Lien is created, incurred or assumed, except that, in
the case of a Lien incurred to finance construction on real property,
such Lien may extend to unimproved real property on which the
construction takes place and (ii) the Indebtedness secured by such Lien
may not be incurred more than 120 days after the later of the
acquisition, completion of construction or commencement of full operation
of the Property subject to such Lien;
(d) any Lien securing Indebtedness of any Subsidiary owing to the
Borrower or any other Subsidiary;
(e) Liens for taxes, assessments or governmental charges or levies
on its Property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in good
faith and by appropriate proceedings and for which adequate reserves
shall have been set aside on its books in accordance with Agreement
Accounting Principles;
(f) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary course
of business which secure payment of obligations not more than 60 days
past due or which are being contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set aside on
its books;
(g) Liens arising out of pledges or deposits made in the ordinary
course of business in connection with worker's compensation laws,
unemployment insurance, old age pensions and other social security or
retirement benefits, and statutory obligations and other similar
obligations;
(h) any Lien arising out of a judgment, decree or court order, so
long as any appropriate legal proceeding that may have been initiated for
review shall not have been finally terminated or so long as the period
within which such proceeding may be initiated shall not have expired or
such Lien arises in connection with any other proceeding or action at law
or in equity; provided that no proceeding to enforce such Lien has been
commenced and the aggregate amount secured by all such Liens shall not at
any time exceed $10,000,000;
(i) any Lien on chattel paper, instruments or other rights to
payment of the Borrower or any Subsidiary, or cash
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deposited or otherwise subjected to such Lien, (i) as a basis for the
issuance of Letters of Credit, to secure repurchase obligations arising
in connection with securities repurchase agreements entered into in the
ordinary course of business or in aid of other similar borrowing
arrangements, or (ii) arising in connection with the Borrower's
securitizations of such rights to payment conducted in the ordinary
course of business;
(j) any Lien on Property (or any receivables arising in connection
with the lease thereof) acquired by the Borrower or any Subsidiary
through repossession, foreclosure or like proceeding, or securing
Indebtedness incurred at the time of such acquisition or at any time
thereafter to finance all or part of the cost of maintenance, improvement
or construction relating thereto; provided that such Lien does not apply
to any other Property of the Borrower or any Subsidiary, except that, in
the case of any such Lien incurred to finance construction on real
property, such Lien may extend to unimproved real property on which the
construction takes place;
(k) any Lien (an "Extended Lien") extending, renewing or replacing
in whole or in part another Lien (an "Existing Lien") permitted by
paragraphs (a) through (j) above; provided that (i) such Extended Lien
shall not extend beyond (A) the Property subject to such Existing Lien
and (B) improvements and construction on such Property, and (ii) the
principal amount of the Indebtedness secured by such Extended Lien may
not exceed the principal amount of the Indebtedness secured by such
Existing Lien; or
(l) any Lien securing Indebtedness of the Borrower or any
Subsidiary in a principal amount at any time outstanding that does not
exceed the amount, if any, by which (i) 5% of Consolidated Net Tangible
Assets exceeds (ii) the aggregate amount of all other Indebtedness of the
Borrower and its Subsidiaries outstanding at such time that is secured by
Liens on Property of the Borrower and its Subsidiaries, other than
Indebtedness secured by Liens permitted by paragraphs (a) through (k)
above.
6.11. Inconsistent Agreements. The Borrower shall not, nor shall it
permit any Subsidiary to, enter into any indenture, agreement, instrument or
other arrangement which, (a) directly or indirectly prohibits or restrains, or
has the effect of prohibiting or restraining, or imposes materially adverse
conditions upon, the incurrence of the Obligations, the granting of Liens to
secure the Obligations, the amending of the Loan Documents or the ability of
any Subsidiary to (i) pay dividends or make other distributions on its capital
stock, (ii) make loans or advances to the Borrower or (iii) repay loans or
advances from the Borrower or (b) contains any provision which would be
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violated or breached by the making of Advances or by the performance by the
Borrower of any of its obligations under any Loan Document.
6.12. Financial Covenants. The Borrower on a consolidated basis with
its Subsidiaries shall:
6.12.1. Net Worth. At all times after the date hereof, maintain a
minimum Net Worth of at least $750,000,000.
6.12.2. Fixed Charge Coverage Ratio. For the twelve-month period
ending on each Fiscal Quarter end, maintain a Fixed Charge Coverage Ratio of
not less than 1.25:1.0.
6.12.3. Debt to Equity Ratio. At all times after the date hereof,
maintain a Debt to Equity Ratio of not more than 5.0:1.0.
ARTICLE VII
DEFAULTS
--------
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on behalf
of the Borrower to the Lenders or the Administrative Agent under or in
connection with this Agreement, any other Loan Document, any Loan, or any
certificate or information delivered in connection with this Agreement or any
other Loan Document shall be false in any material respect on the date as of
which made.
7.2. Nonpayment of (a) any principal of any Note when due, or (b) any
interest upon any Note or any facility or utilization fee or obligations under
any of the Loan Documents within five days after the same becomes due.
7.3. The breach by the Borrower of any of the terms or provisions of
Section 6.2, Section 6.3(a) or Sections 6.9 through 6.12.
7.4. The breach by the Borrower (other than a breach which constitutes a
Default under Section 7.1, 7.2 or 7.3) of any of the terms or provisions of
this Agreement which is not remedied within 30 days after written notice from
the Administrative Agent or any Lender.
7.5. The default by the Borrower or any of its Subsidiaries in the
performance of any term, provision or condition contained in any agreement or
agreements under which any Indebtedness aggregating an amount equal to or in
excess of $25,000,000 was
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created or is governed, or the occurrence of any other event or existence of
any other condition, the effect of any of which is to cause, or to permit the
holder or holders of such Indebtedness to cause, such Indebtedness to become
due prior to its stated maturity; or any such Indebtedness of the Borrower or
any of its Subsidiaries shall be declared to be due and payable or required to
be prepaid (other than by a regularly scheduled payment) prior to the stated
maturity thereof.
7.6. The Borrower or any of its Subsidiaries shall (a) have an order for
relief entered with respect to it under the Federal bankruptcy laws as now or
hereafter in effect, (b) make an assignment for the benefit of creditors, (c)
apply for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
Substantial Portion of its Property, (d) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in
effect or seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement, adjustment
or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors or fail to file an answer or
other pleading denying the material allegations of any such proceeding filed
against it, (e) take any corporate action to authorize or effect any of the
foregoing actions set forth in this Section 7.6, (f) fail to contest in good
faith any appointment or proceeding described in Section 7.7 or (g) become
unable to pay, not pay, or admit in writing its inability to pay, its debts
generally as they become due.
7.7. Without the application, approval or consent of the Borrower or any
of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any of its Subsidiaries or any
Substantial Portion of its Property, or a proceeding described in Section
7.6(d) shall be instituted against the Borrower or any of its Subsidiaries and
such appointment continues undischarged or such proceeding continues
undismissed or unstayed for a period of 30 consecutive days.
7.8. For any period of 60 consecutive days there shall be outstanding
against the Borrower or any of its Subsidiaries any judgment(s) or order(s)
for the payment of money aggregating in excess of $25,000,000, which judgments
or orders have not been paid, bonded, otherwise discharged or stayed on appeal
or as to which any enforcement action has been commenced.
7.9. The Unfunded Liabilities of all Plans shall exceed in the aggregate
$10,000,000.
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ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
----------------------------------------------
8.1. Acceleration. If any Default described in Section 7.6 or 7.7 occurs
with respect to the Borrower, the obligations of the Lenders to make Loans
hereunder shall automatically terminate and the Obligations shall immediately
become due and payable without any election or action on the part of the
Administrative Agent or any Lender. If any other Default occurs, the Majority
Lenders may (or the Administrative Agent, if so directed by the Majority
Lenders, shall) terminate or suspend the obligations of the Lenders to make
Loans hereunder, or declare the Obligations to be due and payable, or both,
whereupon the Obligations shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which the Borrower
hereby expressly waives.
If, within ten Business Days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described in
Section 7.6 or 7.7 with respect to the Borrower) and before any judgment or
decree for the payment of the Obligations due shall have been obtained or
entered, the Majority Lenders (in their sole discretion) shall so direct, the
Administrative Agent shall, by notice to the Borrower, rescind and annul such
acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this Article VIII, the
Majority Lenders (or the Administrative Agent with the consent in writing of
the Majority Lenders) and the Borrower may enter into agreements supplemental
hereto for the purpose of adding or modifying any provisions to the Loan
Documents or changing in any manner the rights of the Lenders or the Borrower
hereunder or waiving any Default or condition hereunder; provided, however,
that no such supplemental agreement shall, without the consent of each Lender:
(a) Extend the final maturity of any Loan or Note or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest or fees (including facility fees and utilization fees) thereon;
(b) Change the percentage specified in the definition of Majority
Lenders;
(c) Reduce the amount of or extend the date for the mandatory
prepayments required under Section 2.9, or increase the amount of the
Commitment of any Lender hereunder;
(d) Extend the Facility Termination Date;
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(e) Amend this Section 8.2;
(f) Permit any assignment by the Borrower of its Obligations or its
rights hereunder (other than an assignment of such Obligations or rights
occurring by operation of law pursuant to a merger or consolidation permitted
pursuant to Section 6.9).
No amendment of any provision of this Agreement relating to the Administrative
Agent shall be effective without the written consent of the Administrative
Agent. The Administrative Agent may waive payment of the fee required under
Section 12.3.2 without obtaining the consent of any other party to this
Agreement.
8.3. Preservation of Rights. No delay or omission of the Lenders or the
Administrative Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Loan notwithstanding the existence
of a Default or the inability of the Borrower to satisfy the conditions
precedent to such Loan shall not constitute any waiver or acquiescence. Any
single or partial exercise of any such right shall not preclude other or
further exercise thereof or the exercise of any other right, and no waiver,
amendment or other variation of the terms, conditions or provisions of the
Loan Documents whatsoever shall be valid unless in writing signed by the
Lenders required pursuant to Section 8.2, and then only to the extent in such
writing specifically set forth. All remedies contained in the Loan Documents
or by law afforded shall be cumulative and all shall be available to the
Administrative Agent and the Lenders until the Obligations have been paid in
full.
ARTICLE IX
GENERAL PROVISIONS
------------------
9.1. Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement or of the Borrower or any Subsidiary
contained in any Loan Document shall survive delivery of the Notes and the
making of the Loans herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3. Taxes. Any stamp, documentary or similar taxes, assessments or
charges payable or ruled payable by any governmental authority in respect of
the Loan Documents shall be paid by the Borrower, together with interest and
penalties, if any.
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9.4. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any
of the provisions of the Loan Documents.
9.5. Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Administrative Agent and the Lenders
and supersede all prior agreements and understandings among the Borrower, the
Administrative Agent and the Lenders relating to the subject matter thereof
other than the fee letter dated February 15, 1996 in favor of First Chicago.
9.6. Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Administrative Agent is authorized to act as such). The failure of any Lender
to perform any of its obligations hereunder shall not relieve any other Lender
from any of its obligations hereunder. This Agreement shall not be construed
so as to confer any right or benefit upon any Person other than the parties to
this Agreement and their respective successors and assigns.
9.7. Expenses; Indemnification. The Borrower shall reimburse the
Administrative Agent for any costs, internal charges and out-of-pocket
expenses (including attorneys' fees and time charges of attorneys for the
Administrative Agent, which attorneys may be employees of the Administrative
Agent) paid or incurred by the Administrative Agent in connection with the
preparation, negotiation, execution, delivery, review, amendment,
modification, and administration of the Loan Documents. The Borrower also
agrees to reimburse the Administrative Agent and the Lenders for any costs,
internal charges and out-of-pocket expenses (including attorneys' fees and
time charges of attorneys for the Administrative Agent and the Lenders, which
attorneys may be employees of the Administrative Agent or the Lenders) paid or
incurred by the Administrative Agent or any Lender in connection with the
collection and enforcement of the Loan Documents. The Borrower further agrees
to indemnify the Administrative Agent and each Lender, its directors, officers
and employees against all losses, claims, damages, penalties, judgments,
liabilities and expenses (including, without limitation, all expenses of
litigation or preparation therefor whether or not the Administrative Agent or
any Lender is a party thereto) which any of them may pay or incur arising out
of or relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby or thereby or the direct or indirect application or
proposed application of the proceeds of any Loan hereunder except to the
extent that they arise out of the gross negligence or willful misconduct of
the party seeking indemnification. The obligations of the Borrower under this
Section 9.7 shall survive the termination of this Agreement.
9.8. Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to the
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Administrative Agent with sufficient counterparts so that the Administrative
Agent may furnish one to each of the Lenders.
9.9. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
9.10. Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are
declared to be severable.
9.11. Nonliability of Lenders. The relationship between the Borrower
and the Lenders and the Administrative Agent shall be solely that of borrower
and lender. Neither the Administrative Agent nor any Lender shall have any
fiduciary responsibilities to the Borrower. Neither the Administrative Agent
nor any Lender undertakes any responsibility to the Borrower to review or
inform the Borrower of any matter in connection with any phase of the
Borrower's business or operations. The Borrower shall rely entirely upon its
own judgment with respect to its business, and any review, inspection or
supervision of, or information supplied to the Borrower by the Administrative
Agent or the Lenders is for the protection of the Administrative Agent and the
Lenders and neither the Borrower nor any other Person is entitled to rely
thereon. The Borrower agrees that neither the Administrative Agent nor any
Lender shall have any liability with respect to, and the Borrower hereby
waives, releases and agrees not to sue for, any special, indirect or
consequential damages suffered by the Borrower in connection with, arising out
of, or in any way related to the Loan Documents or the transactions
contemplated thereby or the relationship established by the Loan Documents, or
any act, omission or event occurring in connection therewith.
9.12. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS, WITHOUT REGARD TO CONFLICT OF LAWS
PROVISIONS, OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
9.13. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY
NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN SUCH A COURT OR THAT
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SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF
THE ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
THE BORROWER AGAINST THE ADMINISTRATIVE AGENT OR ANY LENDER OR ANY AFFILIATE
OF THE ADMINISTRATIVE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS; PROVIDED THAT
SUCH PROCEEDINGS MAY BE BROUGHT IN OTHER COURTS IF JURISDICTION MAY NOT BE
OBTAINED IN A COURT IN CHICAGO, ILLINOIS.
9.14. WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT
AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
9.15. Disclosure. The Borrower and each Lender hereby (a)
acknowledge and agree that First Chicago and/or its Affiliates from time to
time may hold other investments in, make other loans to or have other
relationships with the Borrower, including, without limitation, in connection
with any interest rate hedging instruments or agreements or swap transactions,
and (b) waive any liability of First Chicago or such Affiliate to the Borrower
or any Lender, respectively, arising out of or resulting from such
investments, loans or relationships other than liabilities arising out of the
gross negligence or willful misconduct of First Chicago or its Affiliates.
9.16. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been executed by
the Borrower, the Administrative Agent and the Lenders and each party has
notified the Administrative Agent that it has taken such action.
ARTICLE X
THE ADMINISTRATIVE AGENT
------------------------
10.1. Appointment. First Chicago is hereby appointed Administrative
Agent hereunder and under each other Loan Document, and each of the Lenders
authorizes the Administrative Agent to act as the agent of such Lender. The
Administrative Agent agrees to act as such upon the express conditions
contained in this Article X. The Administrative Agent shall not have a
fiduciary relationship in respect of the Borrower or any Lender by reason of
this Agreement.
10.2. Powers. The Administrative Agent shall have and
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may exercise such powers under the Loan Documents as are specifically
delegated to the Administrative Agent by the terms of each thereof, together
with such powers as are reasonably incidental thereto. The Administrative
Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder, except any action specifically provided
by the Loan Documents to be taken by the Administrative Agent.
10.3. General Immunity. Neither the Administrative Agent nor any of
its directors, officers, agents or employees shall be liable to the Borrower
or any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except for its or their own gross negligence or willful misconduct.
10.4. No Responsibility for Loans, Recitals, etc. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or
verify (a) any statement, warranty or representation made in connection with
any Loan Document or any borrowing hereunder, (b) the performance or
observance of any of the covenants or agreements of any obligor under any Loan
Document, including, without limitation, any agreement by an obligor to
furnish information directly to each Lender; (c) the satisfaction of any
condition specified in Article IV, except receipt of items required to be
delivered to the Administrative Agent and not waived at closing, or (d) the
validity, effectiveness, sufficiency, enforceability or genuineness of any
Loan Document or any other instrument or writing furnished in connection
therewith. The Administrative Agent shall have no duty to disclose to the
Lenders information that is not required to be furnished by the Borrower to
the Administrative Agent at such time, but is voluntarily furnished by the
Borrower to the Administrative Agent (either in its capacity as Administrative
Agent or in its individual capacity).
10.5. Action on Instructions of Lenders. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder and under any other Loan Document in accordance with written
instructions signed by the Majority Lenders (or, to the extent required by
Section 8.2, all Lenders), and such instructions and any action taken or
failure to act pursuant thereto shall be binding on all of the Lenders and on
all holders of Notes. The Administrative Agent shall be fully justified in
failing or refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction by the
Lenders pro rata against any and all liability, cost and expense that it may
incur by reason of taking or continuing to take any such action.
10.6. Employment of Agents and Counsel. The Administrative Agent
may execute any of its duties as Administrative Agent hereunder and under any
other Loan Document by or through employees, agents and attorneys-in-fact and
shall not be answerable to the Lenders, except as to money or
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securities received by it or its authorized agents, for the default or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. The Administrative Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.
10.7. Reliance on Documents; Counsel. The Administrative Agent
shall be entitled to rely upon any Note, notice, consent, certificate,
affidavit, letter, telegram, statement, paper or document believed by it to be
genuine and correct and to have been signed or sent by the proper person or
persons, and, in respect to legal matters, upon the opinion of counsel
selected by the Administrative Agent, which counsel may be employees of the
Administrative Agent.
10.8. Administrative Agent's Reimbursement and Indemnification. The
Lenders agree to reimburse and indemnify the Administrative Agent ratably in
proportion to their respective Commitments (or, if the Commitments have been
terminated, in proportion to their Commitments immediately prior to such
termination) (a) for any amounts not reimbursed by the Borrower for which the
Administrative Agent is entitled to reimbursement by the Borrower under the
Loan Documents, (b) for any other expenses incurred by the Administrative
Agent on behalf of the Lenders, in connection with the preparation, execution,
delivery, administration and enforcement of the Loan Documents, and (c) for
any liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever
which may be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of the Loan Documents or any other
document delivered in connection therewith or the transactions contemplated
thereby, or the enforcement of any of the terms thereof or of any such other
documents; provided that no Lender shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of the
Administrative Agent. The obligations of the Lenders under this Section 10.8
shall survive payment of the Obligations and termination of this Agreement.
10.9. Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or
Unmatured Default hereunder unless the Administrative Agent has received
written notice from a Lender or the Borrower referring to this Agreement
describing such Default or Unmatured Default and stating that such notice is a
"notice of default". In the event that the Administrative Agent receives such
a notice, the Administrative Agent shall give prompt notice thereof to the
Lenders.
10.10. Rights as a Lender. In the event the Administrative Agent is
a Lender, the Administrative Agent shall have the same rights and powers
hereunder and under any other Loan Document as any Lender and may exercise the
same as though
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it were not the Administrative Agent, and the term "Lender" or "Lenders"
shall, at any time when the Administrative Agent is a Lender, unless the
context otherwise indicates, include the Administrative Agent in its
individual capacity. The Administrative Agent may accept deposits from, lend
money to, and generally engage in any kind of trust, debt, equity or other
transaction, in addition to those contemplated by this Agreement or any other
Loan Document, with the Borrower or any of its Subsidiaries in which the
Borrower or such Subsidiary is not restricted hereby from engaging with any
other Person. The Administrative Agent, in its individual capacity, is not
obligated to remain a Lender.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and
without reliance upon the 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
this Agreement and the other Loan Documents.
10.12. Successor Administrative Agent. The Administrative Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrower, such resignation to be effective upon the appointment of a successor
Administrative Agent or, if no successor Administrative Agent has been
appointed, forty-five days after the retiring Administrative Agent gives
notice of its intention to resign. Upon any such resignation, the Majority
Lenders shall have the right to appoint, on behalf of the Lenders, a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Majority Lenders and shall have accepted such appointment
within thirty days after the resigning Administrative Agent's giving notice of
its intention to resign, then the resigning Administrative Agent may appoint,
on behalf of the Borrower and the Lenders, a successor Administrative Agent.
If the Administrative Agent has resigned and no successor Administrative Agent
has been appointed, the Lenders may perform all the duties of the
Administrative Agent hereunder and the Borrower shall make all payments in
respect of the Obligations to the applicable Lender and for all other purposes
shall deal directly with the Lenders. No successor Administrative Agent shall
be deemed to be appointed hereunder until such successor Administrative Agent
has accepted the appointment. Any such successor Administrative Agent shall
be a commercial bank having capital and retained earnings of at least
$50,000,000. 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
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with all the rights, powers, privileges and duties of the resigning
Administrative Agent. Upon the effectiveness of the resignation of the
Administrative Agent, the resigning Administrative Agent shall be discharged
from its duties and obligations hereunder and under the Loan Documents. After
the effectiveness of the resignation of an Administrative Agent, the
provisions of this Article X shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting
as the Administrative Agent hereunder and under the other Loan Documents.
10.13. Co-Agents. There shall be no rights, obligations or liabilities
imposed upon the Co-Agents identified on the signature pages of this Agreement
by virtue of their status as such.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
------------------------
11.1. Setoff. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default or Unmatured Default occurs, any and all deposits
(including all account balances, whether provisional or final and whether or
not collected or available) and any other Indebtedness at any time held or
owing by any Lender to or for the credit or account of the Borrower may be
offset and applied toward the payment of the Obligations owing to such Lender,
whether or not the Obligations, or any part hereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Loans (other than payments received pursuant
to Section 3.1, 3.2 or 3.4) in a greater proportion than its pro-rata share of
such Loans, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender
will hold its ratable proportion of Loans. If any Lender, whether in
connection with setoff or amounts which might be subject to setoff or
otherwise, receives collateral or other protection for its Obligations or such
amounts which may be subject to setoff, such Lender agrees, promptly upon
demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their Loans. In case any
such payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be made. If an amount to be setoff is to be applied to
Indebtedness of the Borrower to a Lender, other than Indebtedness evidenced by
any of the Notes held by such Lender, such amount shall be applied ratably to
such other Indebtedness and to the Indebtedness evidenced by such Notes.
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ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
-------------------------------------------------
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and
the Lenders and their respective successors and assigns, except that (a) the
Borrower shall not have the right to assign its rights or Obligations under
the Loan Documents (other than an assignment of such rights or Obligations
occurring by operation of law pursuant to a merger or consolidation permitted
pursuant to Section 6.9), and (b) any assignment by any Lender must be made in
compliance with Section 12.3. Notwithstanding clause (b) of this Section
12.1, any Lender may at any time, without the consent of the Borrower or the
Administrative Agent, assign all or any portion of its rights under this
Agreement and its Notes to a Federal Reserve Bank; provided, however, that no
such assignment to a Federal Reserve Bank shall release the transferor Lender
from its obligations hereunder. The Administrative Agent may treat the payee
of any Note as the owner thereof for all purposes hereof unless and until such
payee complies with Section 12.3 in the case of an assignment thereof or, in
the case of any other transfer, a written notice of the transfer is filed with
the Administrative Agent. Any assignee or transferee of a Note agrees by
acceptance thereof to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who at the time
of making such request or giving such authority or consent is the holder of
any Note, shall be conclusive and binding on any subsequent holder, transferee
or assignee of such Note or of any Note or Notes issued in exchange therefor.
12.2. Participations.
12.2.1. Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with applicable law, at any
time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held by
such Lender, any Commitment of such Lender or any other interest of such
Lender under the Loan Documents. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under the
Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the holder of any such Note for all
purposes under the Loan Documents, all amounts payable by the Borrower under
this Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents.
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12.2.2. Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, modification
or waiver of any provision of the Loan Documents other than any amendment,
modification or waiver which effects any of the modifications referenced in
clauses (a) through (f) of Section 8.2.
12.2.3. Benefit of Setoff. The Borrower agrees that each Participant
shall be deemed to have the right of setoff provided in Section 11.1 in respect
of its participating interest in amounts owing under the Loan Documents to the
same extent as if the amount of its participating interest were owing directly
to it as a Lender under the Loan Documents; provided that each Lender shall
retain the right of setoff provided in Section 11.1 with respect to the amount
of participating interests sold to each Participant. The Lenders agree to share
with each Participant, and each Participant, by exercising the right of setoff
provided in Section 11.1, agrees to share with each Lender, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 11.2 as if each Participant were a Lender.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time assign
to one or more banks or other entities ("Purchasers") all or any part of its
rights and obligations under the Loan Documents; provided, however, that in the
case of an assignment to an entity which is not a Lender or an Affiliate of a
lender, such assignment shall be in a minimum amount of $10,000,000. Such
assignment shall be substantially in the form of Exhibit I hereto or in such
other form as may be agreed to by the parties thereto. The consent of the
Administrative Agent and, so long as no Default is continuing, the Borrower
shall be required prior to an assignment becoming effective with respect to a
Purchaser which is not a Lender or an Affiliate thereof. Such consent shall not
be unreasonably withheld.
12.3.2. Effect; Effective Date. Upon (a) delivery to the
Administrative Agent of a notice of assignment, substantially in the form
attached as Exhibit I to Exhibit I hereto (a "Notice of Assignment"), together
with any consents required by Section 12.3.1, and (b) payment of a $3,000 fee to
the Administrative Agent for processing such assignment, such assignment shall
become effective on the effective date specified in such Notice of Assignment.
On and after the effective date of such assignment, (a) such Purchaser shall for
all purposes be a Lender party to this Agreement and any other Loan Document
executed by the Lenders and shall have all the rights and obligations of a
Lender under the Loan Documents, to the same extent as if it were an original
party hereto, and (b) the transferor Lender shall be released with respect to
the percentage of the Aggregate Commitment and Loans assigned to such Purchaser
without any
57
<PAGE>
further consent or action by the Borrower, the Lenders or the Administrative
Agent. Upon the consummation of any assignment to a Purchaser pursuant to
this Section 12.3.2, the transferor Lender, the Administrative Agent and the
Borrower shall make appropriate arrangements so that replacement Notes are
issued to such transferor Lender and new Notes or, as appropriate, replacement
Notes, are issued to such Purchaser, in each case in principal amounts
reflecting their Revolving Credit Commitment, as adjusted pursuant to such
assignment.
12.4. Dissemination of Information. The Borrower authorizes each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and
any prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries.
12.5. Tax Treatment. If any interest in any Loan Document is transferred
to any Transferee which is organized under the laws of any jurisdiction other
than the United States or any State thereof, the transferor Lender shall cause
such Transferee, concurrently with the effectiveness of such transfer, to comply
with the provisions of Section 2.18.
ARTICLE XIII
NOTICES
-------
13.1. Giving Notice. Except as otherwise permitted by Section 2.15 with
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing, by facsimile, first class U.S. mail or overnight courier and addressed
or delivered to such party at its address set forth below its signature hereto
or at such other address as may be designated by such party in a notice to the
other parties. Any notice, if mailed and properly addressed with first class
postage prepaid, return receipt requested, shall be deemed given three Business
Days after deposit in the U.S. mail; any notice, if transmitted by facsimile,
shall be deemed given when transmitted; and any notice given by overnight
courier shall be deemed given when received by the addressee.
13.2. Change of Address. The Borrower, the Administrative Agent and any
Lender may each change the address for service of notice upon it by a notice
in writing to the other parties hereto.
[signature pages follow]
58
<PAGE>
IN WITNESS WHEREOF, the Borrower, the Lenders and the Administrative
Agent have executed this Agreement as of the date first above written.
GREEN TREE FINANCIAL CORPORATION
By:
Print Name:
Title:
Address: 500 Landmark Towers
345 St. Peter Street
St. Paul, MN 55102
Attn: Phyllis A. Knight
Telecopy: 612/293-5695
Telephone: 612/293-5770
Commitments $50,000,000 THE FIRST NATIONAL BANK OF CHICAGO,
----------- Individually and as Administrative
Agent
By:
Print Name:
Title:
Address: One First National Plaza
Chicago, IL 60670
Attn: John F. Ide
Telecopy: 312/732-6222
Telephone: 312/732-5103
<PAGE>
$40,000,000 FIRST BANK NATIONAL ASSOCIATION
By:
Print Name:
Title:
Address: First Bank Place
601 Second Avenue South
Minneapolis, MN 55402
Attn: Edwin D. Jenkins
Telecopy: 612/973-0826
Telephone: 612/973-0588
$35,000,000 COMERICA BANK,
Individually and as Co-Agent
By:
Print Name:
Title:
Address: One Detroit Center
500 Woodward Avenue
MC 3278
Detroit, MI 48226
Attn: David L. Morrison
Telecopy: 313/222-3330
Telephone: 313/222-3808
S-2
<PAGE>
$35,000,000 COMMERZBANK AG, CHICAGO BRANCH,
Individually and as Co-Agent
By:
Print Name:
Title:
Address: 311 South Wacker Drive
Suite 5800
Chicago, IL 60606
Attn: William Peterson
Telecopy: 312/435-1486
Telephone: 312/408-6913
$35,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
Individually and as Co-Agent
By:
Print Name:
Title:
Address: 60 Wall Street
New York, NY 10260-0060
Attn: James F. Dwyer
Telecopy: 212/648-5548
Telephone: 212/648-7549
S-3
<PAGE>
$30,000,000 THE BANK OF TOKYO-MITSUBISHI,
LIMITED, CHICAGO BRANCH
By:
Print Name:
Title:
Address: 115 South LaSalle Street
Suite 2100
Chicago, IL 60603
Attn: Loan Administration
Telecopy: 312/263-2555
Telephone: 312/269-0430
$25,000,000 BANQUE NATIONALE DE PARIS
By:
Print Name:
Title:
Address: 209 South LaSalle Street
5th Floor
Chicago, IL 60604
Attn: Jo Ellen Bender
Telecopy: 312/977-1380
Telephone: 312/977-2225
S-4
<PAGE>
$25,000,000 CREDIT LYONNAIS NEW YORK BRANCH
By:
Print Name:
Title:
Address: 1301 Avenue of the Americas
New York, NY 10019
Attn: Gregory Raue
Telecopy: 212/261-3401
Telephone: 212/261-7408
$25,000,000 CREDIT SUISSE
By:
Print Name:
Title:
By:
Print Name:
Title:
Address: 12 East 49th Street
New York, NY 10017
Attn: Hazel Leslie
Telecopy: 212/238-5246
Telephone: 212/238-5218
copy to:
Address: 227 West Monroe Street
40th Floor
Chicago, IL 60606
Attn: Tracy Toulouse
Telecopy: 312/630-0359
Telephone: 312/630-0086
S-5
<PAGE>
$25,000,000 THE DAI-ICHI KANGYO BANK, LTD.,
CHICAGO BRANCH
By:
Print Name:
Title:
Address: 10 South Wacker Drive
26th Floor
Chicago, IL 60606
Attn: Michael D. Pleasants
Telecopy: 312/876-2011
Telephone: 312/715-6361
$25,000,000 FIRST HAWAIIAN BANK
By:
Print Name:
Title:
Address: 1132 Bishop Street
19th Floor
Honolulu, HI 96847
Attn: Charles L. Jenkins
Telecopy: 808/525-6372
Telephone: 808/525-6289
S-6
<PAGE>
$25,000,000 FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By:
Print Name:
Title:
Address: One First Union Center TW-8
Charlotte, NC 28288-0600
Attn: Sinclair Ellett
Telecopy: 704/374-7102
Telephone: 704/383-1418
$25,000,000 FIRSTAR BANK MILWAUKEE, N.A.
By:
Print Name:
Title:
Address: 1550 East 79th Street
Bloomington, MN 55425
Attn: Laura B. Pearson
Telecopy: 612/854-5376
Telephone: 612/851-5690
S-7
<PAGE>
$25,000,000 THE FUJI BANK, LIMITED
By:
Print Name:
Title:
Address: 225 West Wacker Drive
Suite 2000
Chicago, IL 60606
Attn: Peter Chinnici
Telecopy: 312/621-0539
Telephone: 312/621-0515
$25,000,000 NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
Print Name:
Title:
Address: Norwest Center
Sixth and Marquette
Minneapolis, MN 55479-0105
Attn: Edward J. Meyer, Jr.
Telecopy: 612/667-7251
Telephone: 612/667-7375
S-8
<PAGE>
$25,000,000 THE SUMITOMO BANK, LIMITED
By:
Print Name:
Title:
By:
Print Name:
Title:
Address: 4135 Multi-Foods Tower
33 South 6th Street
Minneapolis, MN 55402
Attn: Michael J. Philippe
Telecopy: 612/332-6745
Telephone: 612/332-8235
$25,000,000 UNION BANK OF SWITZERLAND
By:
Print Name:
Title:
By:
Print Name:
Title:
Address: 30 South Wacker Drive
Chicago, IL 60606
Attn: David E. Collignon
Telecopy: 312/993-5530
Telephone: 312/993-5447
Aggregate
Commitment $500,000,000
S-9
<PAGE>
Exhibit 11.(a)
GREEN TREE FINANCIAL CORPORATION AND SUBSIDIARIES
-------------------------------------------------
COMPUTATION OF PRIMARY EARNINGS PER SHARE
-----------------------------------------
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30
------------------------------
1996 1995
-------------- --------------
<S> <C> <C>
Net earnings $227,302,000 $184,478,000
============ ============
Weighted average number of
common and common equivalent
shares outstanding:
Weighted average common
shares outstanding 136,826,427 136,555,149
Dilutive effect of stock
options after application
of treasury-stock method 3,384,412 3,484,789
------------ ------------
140,210,839 140,039,938
============ ============
Earnings per share $ 1.62 $ 1.32
============ ============
Three Months Ended September 30
-------------------------------
1996 1995
------------ ------------
Net earnings $ 85,518,000 $ 72,037,000
============ ============
Weighted average number of
common and common equivalent
shares outstanding:
Weighted average common
shares outstanding 137,329,239 137,042,732
Dilutive effect of stock
options after application
of treasury-stock method 3,476,424 3,502,247
------------ ------------
140,805,663 140,544,979
============ ============
Earnings per share $ .61 $ .51
============ ============
</TABLE>
68
<PAGE>
Exhibit 11.(b)
GREEN TREE FINANCIAL CORPORATION AND SUBSIDIARIES
-------------------------------------------------
COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE
-----------------------------------------------
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30
------------------------------
1996 1995
-------------- --------------
<S> <C> <C>
Net earnings $227,302,000 $184,478,000
============ ============
Weighted average number of
common and common equivalent
shares outstanding:
Weighted average common
shares outstanding 136,826,427 136,555,149
Dilutive effect of stock
options after application
of treasury-stock method 3,651,104 3,647,413
------------ ------------
140,477,531 140,202,562
============ ============
Earnings per share $ 1.62 $ 1.32
============ ============
Three Months Ended September 30
-------------------------------
1996 1995
------------ ------------
Net earnings $ 85,518,000 $ 72,037,000
============ ============
Weighted average number of
common and common equivalent
shares outstanding:
Weighted average common
shares outstanding 137,329,239 137,042,732
Dilutive effect of stock
options after application
of treasury-stock method 4,135,900 3,767,705
------------ ------------
141,465,139 140,810,437
============ ============
Earnings per share $ .60 $ .51
============ ============
</TABLE>
69
<PAGE>
Exhibit 12.
GREEN TREE FINANCIAL CORPORATION AND SUBSIDIARIES
-------------------------------------------------
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
-------------------------------------------------
<TABLE>
<CAPTION>
Nine months
ended
September 30, 1996
-------------------
(unaudited)
<S> <C>
Earnings:
Earnings before income taxes $366,616,000
Fixed charges:
Interest 45,462,000
One-third rent 2,024,000
------------
47,486,000
------------
$414,102,000
============
Fixed charges:
Interest 45,462,000
One-third rent 2,024,000
------------
$ 47,486,000
============
Ratio of earnings to fixed charges (1) 8.72
====
</TABLE>
(1) For purposes of computing the ratio, earnings consist of earnings before
income taxes plus fixed charges.
70
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from the
financial statements of Green Tree Financial Corporation and Subsidiaries and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 754,718,000
<SECURITIES> 12,394,000
<RECEIVABLES> 425,397,000
<ALLOWANCES> 1,645,000
<INVENTORY> 470,078,000
<CURRENT-ASSETS> 0
<PP&E> 106,040,000
<DEPRECIATION> 39,255,000
<TOTAL-ASSETS> 3,144,188,000
<CURRENT-LIABILITIES> 0
<BONDS> 290,229,000
<COMMON> 1,395,000
0
0
<OTHER-SE> 1,169,151,000
<TOTAL-LIABILITY-AND-EQUITY> 3,144,188,000
<SALES> 599,378,000
<TOTAL-REVENUES> 583,885,000
<CGS> 0
<TOTAL-COSTS> 171,807,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 252,158,000
<INTEREST-EXPENSE> 45,462,000
<INCOME-PRETAX> 366,616,000
<INCOME-TAX> 139,314,000
<INCOME-CONTINUING> 227,302,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 227,302,000
<EPS-PRIMARY> 1.62
<EPS-DILUTED> 1.62
</TABLE>
