Form 10Q
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
March 31, 1995 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 0-14120
Advanta Corp.
(Exact name of registrant as specified in its charter)
Delaware 23-1462070
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Brandywine Corporate Center, 650 Naamans Rd., Claymont, DE 19703
(Address of Principal Executive Offices) (Zip Code)
(302) 791-4400
(Registrant's telephone number, including area code)
____________________________________________________________________
(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 ____
* Applicable only to issuers involved in bankruptcy proceedings
during the preceding five years:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
Yes No ____
* Applicable only to corporate issuers:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class A Outstanding at May 1, 1995
Common Stock, $.01 par value 17,402,325 shares
Class B Outstanding at May 1, 1995
Common Stock, $.01 par value 23,712,010 shares
<PAGE>
Table of Contents
Page
Part I - Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheets 3
Consolidated Condensed Income Statements 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Condensed Financial
Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 12
Part II - Other Information 23
<PAGE>
ADVANTA CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands)
March 31, December 31,
1995 1994
ASSETS (Unaudited)
Cash $ 45,800 $ 43,706
Federal funds sold and interest-bearing
deposits with banks 379,444 352,902
Investments available for sale 325,723 318,759
Loan and lease receivables, net:
Available for sale 419,495 573,076
Other loan and lease receivables, net 1,218,419 1,406,378
Total loan and lease receivables, net 1,637,914 1,979,454
Premises and equipment, net 33,746 33,219
Amounts due from credit card
securitizations 167,575 144,483
Other assets 255,334 240,525
Total assets $2,845,536 $3,113,048
LIABILITIES
Deposits $1,004,726 $1,159,358
Debt and other borrowings 1,246,911 1,403,128
Other liabilities 118,849 108,872
Total liabilities 2,370,486 2,671,358
STOCKHOLDERS' EQUITY
Class A preferred stock, $1,000 par
value: authorized, issued and
outstanding -- 1,010 shares in 1995
and 1994 1,010 1,010
Class B preferred stock, $.01 par
value: authorized -- 1,000,000 shares
in 1995 and 1994; none issued
Class A common stock, $.01 par value:
authorized -- 200,000,000 shares;
issued -- 17,410,718 shares in 1995
and 17,347,468 in 1994 174 173
Class B common stock, $.01 par value:
authorized -- 200,000,000 shares;
issued -- 23,281,895 in 1995 and
23,131,498 in 1994 233 231
Additional paid in capital, net 179,449 176,465
Retained earnings, net 294,184 263,811
Total stockholders' equity 475,050 441,690
Total liabilities and stockholders'
equity $2,845,536 $3,113,048
See Notes to Consolidated Condensed Financial Statements
<PAGE>
ADVANTA CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED INCOME STATEMENTS
(In thousands, except per share data)
Three Months Ended
March 31,
(Unaudited)
1995 1994
Interest income:
Loans and leases $ 48,525 $34,654
Investments 10,881 6,026
Total interest income 59,406 40,680
Interest expense:
Deposits 14,656 12,435
Other debt 23,454 8,320
Total interest expense 38,110 20,755
Net interest income 21,296 19,925
Provision for credit losses 8,925 6,829
Net interest income after
provision for credit losses 12,371 13,096
Noninterest revenues 114,223 79,780
Operating expenses:
Amortization of credit card
deferred origination cost, net 15,401 5,445
Other operating expenses 62,740 48,365
Total operating expenses 78,141 53,810
Income before income taxes 48,453 39,066
Provision for income taxes 17,670 14,142
Net income $ 30,783 $24,924
Earnings per common share $ .74 $ .61
Weighted average common
shares outstanding 41,438 40,941
See Notes to Consolidated Condensed Financial Statements
<PAGE>
ADVANTA CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Three Months Ended
March 31,
1995 1994
OPERATING ACTIVITIES (Unaudited)
Net income $ 30,783 $ 24,924
Adjustments to reconcile net income to net
cash provided by operating activities:
Proceeds from sales/securitizations of
receivables 970,503 109,962
Purchase of mortgage/lease portfolios (41,605) (18,897)
Principal collected on mortgages 7,481 3,050
Mortgages made to customers (76,923) (119,289)
Depreciation and amortization of intangibles 2,387 1,628
Provision for credit losses 8,925 6,829
Change in other assets and amounts due from
credit card securitizations (10,984) 1,554
Change in other liabilities 3,372 17,015
Gain on securitization of mortgages and leases (7,456) (7,715)
Net cash provided by operating activities 886,483 19,061
INVESTING ACTIVITIES
Purchase of investments available for sale (118,556) (426,185)
Proceeds from sales of investments available for
sale 90,236 358,015
Proceeds from maturing investments available
for sale 25,639 26,815
Change in fed funds sold and interest-bearing
deposits (28,368) 20,156
Change in credit card receivables, excluding sales (486,219) (121,415)
Purchases of premises and equipment (2,837) (3,549)
Proceeds from sale of premise and equipment 26 6
Excess of cash collections over income
recognized on direct financing leases 3,465 6,920
Equipment purchased for direct financing
lease contracts (50,695) (29,950)
Net change in other loans 186 385
Net cash used by investing activities (567,123) (168,802)
FINANCING ACTIVITIES
Change in demand and savings deposits (63,863) 22,742
Proceeds from sales of time deposits 90,073 104,013
Payments for maturing time deposits (180,842) (237,237)
Change in repurchase agreements and term fed funds (330,455) 195,000
Proceeds from issuance of subordinated debt 13,414 13,619
Payments on redemption of subordinated debt (14,020) (16,874)
Proceeds from issuance of medium-term notes 155,013 75,013
Proceeds from issuance of notes payable 188,014 2,300
Repayment of notes payable (173,000) (9,787)
Proceeds from issuance of stock 1,581 1,381
Cash dividends paid (3,181) (2,364)
Net cash (used)/provided by financing activities (317,266) 147,806
Net increase/(decrease) in cash 2,094 (1,935)
Cash at beginning of period 43,706 31,162
Cash at end of period $ 45,800 $ 29,227
See Notes to Consolidated Financial Statements
<PAGE>
ADVANTA CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands)
March 31, 1995
1) In the opinion of management, the accompanying audited and
unaudited consolidated condensed financial statements contain all
adjustments necessary to present fairly the financial position of
Advanta Corp. and Subsidiaries as of March 31, 1995 and December
31, 1994, the results of their operations for the three month
periods ended March 31, 1995 and 1994, and their cash flows for
the three month periods ended March 31, 1995 and 1994. The
results of operations for the three month period ended March 31,
1995 are not necessarily indicative of the results to be expected
for the full year. Certain prior period amounts have been
reclassified to conform with current year classifications. With
respect to operating expenses, the Company is including the
amortization of credit card deferred origination costs, net of
deferred fees, in operating expenses rather than as a component of
interest income as these net costs are linked to the privilege
period of the cards and not to the credit card receivables.
2) Investments available for sale include securities that the Company
sells from time to time to provide liquidity and in response to
changes in the market. Debt and equity securities classified as
available for sale are reported at market value. Unrealized gains
and losses on these securities are reported as a separate
component of stockholders' equity and included in retained
earnings.
3) Loan and lease receivables available for sale represent
receivables currently on the balance sheet that the Company
generally intends to sell or securitize within the next six
months. These receivables are reported at the lower of book or
fair market value.
4) Loan and lease receivables on the balance sheet, including those
available for sale, consisted of the following:
March 31, December 31,
1995 1994
Gross loan and lease receivables $1,621,992 $1,964,444
Add: Deferred origination costs,
net of deferred fees 55,639 56,627
Less: Reserve for credit losses (39,717) (41,617)
Loan and lease receivables, net $1,637,914 $1,979,454
Number of Accounts:
Credit cards 403,610 337,662
Other loans and leases 13,944 14,034
Total 417,554 351,696
<PAGE>
Receivables and accounts serviced for others consisted of the
following:
March 31, December 31,
1995 1994
Receivables:
Credit cards $5,508,080 $4,808,257
Mortgage loans 1,270,326 1,203,226
Leases 209,948 179,310
Total $6,988,354 $6,190,793
Number of Accounts:
Credit cards 3,647,596 3,490,354
Mortgage loans 25,359 24,668
Leases 42,224 35,537
Total 3,715,179 3,550,559
5) The Company accounts for credit card origination costs under
Statement of Financial Accounting Standards No. 91, "Accounting
for Nonrefundable Fees and Costs Associated with Originating or
Acquiring Loans and Initial Direct Costs of Leases" ("SFAS 91").
This accounting standard requires certain loan and lease
origination fees and costs to be deferred and amortized over the
life of a loan or lease as an adjustment to interest income.
Origination costs are defined under this standard to include costs
of loan origination associated with transactions with independent
third parties and certain costs relating to underwriting
activities and preparing and processing loan documents. The
Company engages third parties to solicit and originate credit card
account relationships. Amounts deferred under these arrangements
were $13.7 million and $11.1 million in the first three months of
1995 and 1994, respectively.
The Company amortizes deferred credit card origination costs under
Issue 93-1 of the Emerging Issues Task Force ("EITF Issue 93-1")
of the Financial Accounting Standards Board regarding the
acquisition of individual credit card accounts from independent
third parties. EITF Issue 93-1 stated that credit card accounts
acquired individually should be accounted for as originations
under SFAS 91 and EITF Issue 92-5. Amounts paid to a third party
to acquire individual credit card accounts should be deferred and
netted against the related credit card fee, if any, and the net
amount should be amortized on a straight line basis over the
privilege period. If a significant fee is charged, the privilege
period is the period that the fee entitles the cardholder to use
the card. If there is no significant fee, the privilege period
should be one year. Direct origination costs incurred related to
credit card account originations initiated after EITF Issue 93-1
are deferred and amortized over 12 months. Costs incurred for
originations which were initiated prior to EITF Issue 93-1 will
continue to be amortized over a 60 month period as was the
practice prior to the EITF 93-1 consensus.
<PAGE>
The Company records excess servicing income on credit card
securitizations representing additional cash flow from the
receivables initially sold based on the repayment term, including
prepayments. Prior to the EITF Issue 93-1 consensus, net gains
were not recorded at the time each transaction was completed as
excess servicing income was offset by the write-off of deferred
origination costs and the establishment of recourse reserves.
Subsequent to the prospective adoption discussed above, excess
servicing income has been recorded at a lower level at the time of
each transaction, and is predominantly offset by the establishment
of recourse reserves. The lower level of excess servicing income
corresponds with the discontinuance of deferred origination cost
write-offs upon securitization of receivables as discussed above.
During the "revolving period" of each securitization, income is
recorded based on additional cash flows from the new receivables
which are sold to the securitization trust on a continual basis to
replenish the investors' interest in trust receivables which have
been repaid by the credit cardholders.
6) The following table shows the changes in the reserve for credit
losses for the periods presented:
Three Months Ended Year Ended
March 31, December 31,
1995 1994
Balance, beginning of period $ 41,617 $ 31,227
Current provision 8,925 34,198
Transfer of recourse
reserves to on-balance
sheet reserves 0 11,485
Net charge-offs (10,825) (35,293)
Balance, end of period $ 39,717 $ 41,617
7) At March 31, 1995 and December 31, 1994, the Company had $167.6
million and $144.5 million, respectively, of amounts due from
credit card securitizations. These amounts include excess
servicing, accrued interest receivable and other amounts related
to these securitizations and are net of recourse reserves
established. A portion of these amounts is subject to liens held
by the providers of credit enhancement facilities for the
respective securitizations.
<PAGE>
8) Selected Balance Sheet Information
Other Assets
March 31, December 31,
1995 1994
Excess mortgage servicing rights $ 76,908 $ 73,223
Accrued interest receivable 42,528 39,353
Prepaid assets 35,606 28,516
Investments in operating leases 12,458 13,123
Deferred costs 11,579 9,500
Excess servicing - leasing 6,863 5,949
Due from trustees - mortgage 6,508 6,295
Current and deferred federal
income taxes 6,377 18,658
Goodwill 5,222 5,318
Other real estate owned 3,996 4,564
Due from trustees - leasing 2,080 2,010
Other 45,209 34,016
Total other assets $255,334 $240,525
Other Liabilities
March 31, December 31,
1995 1994
Deferred fees and other reserves $ 39,425 $ 42,855
Accounts payable and accrued
expenses 26,607 31,380
Accrued interest payable 23,068 10,640
Current and deferred state income
taxes 12,337 6,813
Other 17,412 17,184
Total other liabilities $118,849 $108,872
9) Income tax expense reflects an effective tax rate of approximately
36.5%, for the three month period ended March 31, 1995, compared
to 36.2% for the comparable 1994 period. The Company accounts for
income taxes under the Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes" ("SFAS 109").
Income tax expense consisted of the following components:
Three Months Ended
March 31,
1995 1994
Current:
Federal $14,569 $12,264
State 3,126 2,272
Total current 17,695 14,536
Deferred:
Federal 94 (1,019)
State (119) 625
Total deferred (25) (394)
Total tax expense $17,670 $14,142
<PAGE>
The reconciliation of the statutory federal income tax to the
consolidated tax expense is as follows:
Three Months Ended
March 31,
1995 1994
Statutory federal income tax $16,959 $13,673
State income taxes 1,954 1,884
Tax-free income (279) (328)
Other (964) (1,087)
Consolidated tax expense $17,670 $14,142
The net deferred tax asset is comprised of the following:
March 31, December 31,
1995 1994
Deferred taxes:
Gross assets $ 77,839 $ 78,602
Gross liabilities (55,149) (52,344)
Total deferred taxes $ 22,690 $ 26,258
The Company did not record any valuation allowances against
deferred tax assets at March 31, 1995 and December 31, 1994.
The tax effect of significant temporary differences representing
deferred tax assets and liabilities is as follows:
March 31, December 31,
1995 1994
SFAS 91 $(19,812) $(20,034)
Loan losses 17,517 14,965
Mortgage banking income 12,929 10,174
Securitization income (30,902) (28,949)
Leasing income 38,189 42,473
Insurance underwriting (4,362) (3,361)
Deferred compensation 1,742 1,388
Mark to market adjustment 3,021 3,021
Change in accounting method 1,008 1,008
Other 3,360 5,573
Net deferred tax asset $ 22,690 $ 26,258
<PAGE>
10) The Company has adopted several management incentive plans
designed to provide incentives to participating employees to
remain in the employ of the Company and devote themselves to its
success. Under these plans, certain eligible employees were
required and others were given the opportunity to elect to take
portions of their anticipated or "target" bonus payments for
future years in the form of restricted shares of common stock.
The restricted shares are subject to forfeiture should the
employee terminate employment with the Company prior to vesting.
The shares become unrestricted over time if certain performance
criteria are met. At March 31, 1995, a total of 910,876 shares
issued under these plans were subject to restrictions and were
included in the number of shares outstanding. These shares are
considered common stock equivalents in the calculation of earnings
per common share.
Deferred compensation of $13.6 million and $14.2 million related
to these shares of restricted stock is reflected as a reduction of
equity at March 31, 1995 and December 31, 1994, respectively.
11) In April 1994, the Company, through its subsidiary, Colonial
National Bank USA ("Colonial National" or the "Bank"), reached an
agreement with NationsBank of Delaware, N.A., to sell certain
credit card customer relationships which at that time represented
approximately $150 million of securitized credit card receivables
(less than 4% of the Company's managed credit card receivables as
of June 30, 1994). In the second quarter of 1994, the Company
recorded an $18.4 million pretax gain on the sale related to the
value associated with the customer relationships. In addition,
the Company deferred a portion of the proceeds related to the
excess spread of the receivables to be generated over the
remaining life of the securitization trust, which terminated in
the second quarter of 1995. These proceeds were recognized as
securitization income over the related period. While the accounts
related to these customer relationships were transferred to
NationsBank upon termination of the securitization trust, these
accounts are being serviced by Colonial National at market rates
until the systems conversion to NationsBank is completed, which is
expected to occur early in the third quarter of 1995.
12) The following table shows the calculation of earnings per common
share:
Three Months Ended
March 31,
1995 1994
Net income $30,783 $24,924
less: preferred dividends (141) (141)
Net income available to common
shares $30,642 $24,783
Average common stock outstanding 39,462 38,650
Common stock equivalents 1,976 2,291
Weighted average common shares
outstanding (in thousands) 41,438 40,941
Earnings per common share $ .74 $ .61
<PAGE>
ADVANTA CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Net income for the three months ended March 31, 1995 was $30.8
million, a $5.9 million or 24% increase from the $24.9 million
reported for the first quarter of 1994. Earnings per share for the
first quarter of 1995 were $.74, a 21% increase from $.61 per share
for the same period last year.
Earnings increased in the first quarter of 1995 primarily as a result
of a 59% increase in average managed receivables, partially offset by
an approximate 20% contraction in the managed net interest margin,
reflecting the Company's growth strategy of utilizing low introductory
rate pricing on credit cards. Earnings also reflected continued
improvement in credit quality with the total managed charge-off rate
decreasing to 2.1% for the first quarter of 1995 from 2.5% for the
first quarter of 1994. The Company continues to securitize a majority
of the growth in its receivables and report the performance of the
securitized receivables as noninterest revenues. Consequently, the 59%
increase in average managed receivables resulted in a $34.4 million or
43% rise in noninterest revenues to $114.2 million in 1995, from $79.8
million in 1994. Disciplined cost management resulted in a decrease in
the operating expense ratio to 3.0% of average managed receivables in
the first quarter of 1995, compared to 3.7% in the first quarter of
1994.
NET INTEREST INCOME
Net interest income for the first quarter of 1995 increased $1.4
million to $21.3 million from $19.9 million for the same period of
1994. This resulted from a $632 million increase in average interest
earning assets partially offset by a decline in the owned net interest
margin to 3.46% for the first quarter of 1995, from 4.31% for the
first quarter of 1994. The lower owned net interest margin resulted
from a significant increase in credit card receivables issued at low
introductory rates. The Company's credit cards (other than those with
fixed rate introductory pricing) are contractually indexed to either
the prime rate or LIBOR.
The following table provides an analysis of both owned and managed
interest income and expense data, average balance sheet data, net
interest spread (the difference between the yield on interest earning
assets and the average rate paid on interest-bearing liabilities), and
net interest margin (the difference between the yield on interest
earning assets and the average rate paid to fund interest earning
assets) for the three month periods ended March 31, 1995 and 1994.
Average owned loan and lease receivables and the related interest
revenues include certain loan fees.
<PAGE>
<TABLE>
INTEREST RATE ANALYSIS
<CAPTION>
Three Months Ended March 31,
1995 1994
Average Yield/ Average Yield/
Balance (1) Interest Rate Balance (1) Interest Rate
<S> <C> <C> <C> <C> <C> <C>
On-balance sheet
Credit cards $1,518,052 $ 42,889 11.30% $1,131,473 $ 30,204 10.68%
Mortgage loans 136,240 2,921 8.70 118,962 2,811 9.58
Leases 86,867 3,069 14.13 46,011 1,744 15.16
Other loans 5,133 88 6.95 3,642 67 7.46
Gross receivables 1,746,292 48,967 11.23 1,300,088 34,826 10.73
Investments (2) 769,936 11,289 5.91 583,837 6,449 4.44
Total interest earning
assets $2,516,228 $ 60,256 9.60% $1,883,925 $ 41,275 8.78%
Interest-bearing
liabilities $2,434,768 $ 38,110 6.26% $1,748,448 $ 20,755 4.78%
Net interest spread 3.34% 4.00%
Net interest margin 3.46% 4.31%
Off-balance sheet
Credit cards $5,180,935 $2,790,233
Mortgage loans 1,220,589 1,041,319
Leases 189,570 123,278
Total average
securitized receivables $6,591,094 $3,954,830
Total average managed
receivables $8,337,386 $5,254,918
Managed Net Interest
Analysis (3):
Interest earning assets $7,697,163 $238,553 12.41% $4,674,158 $141,437 12.11%
Interest-bearing
liabilities $7,615,703 $123,955 6.51% $4,538,681 $ 54,985 4.86%
Net interest spread 5.90% 7.25%
Net interest margin 5.94% 7.38%
<FN>
(1) Includes assets held and available for sale and nonaccrual loans and
leases.
(2) Interest and average rate for tax-free securities computed on a tax
equivalent basis using a statutory rate of 35%.
(3) Combination of owned interest earning assets/owned interest-bearing
liabilities and securitized credit card assets/liabilities.
</TABLE>
<PAGE>
MANAGED PORTFOLIO DATA
The following table provides selected information on a managed basis, as
well as a summary of the effects of credit card securitizations on selected
line items of the Company's consolidated income statements as of and for
the three months ended March 31, 1995 and 1994.
Three Months Ended
March 31,
1995 1994
Balance sheet data:
Average managed receivables $8,337,386 $5,254,918
Managed receivables 8,610,345 5,410,944
Total managed assets 9,833,890 6,331,015
Managed net interest margin
(on a fully tax equivalent basis) 5.94% 7.38%
As a percentage of gross managed
receivables:
Total loans 30 days or more
delinquent 2.8% 3.3%
Net charge-offs 2.1% 2.5%
Effects of credit card
securitizations on:
Net interest income $ (92,452) $ (65,932)
Provision for credit losses 29,392 21,750
With respect to the above information on the effects of credit card
securitizations, net interest income represents the amount by which net
interest income would have been higher had the securitized receivables
remained on the balance sheet. In addition, provision for credit losses
represents the amount by which the provision for credit losses would have
been higher had the securitized receivables remained as owned and the
provision for credit losses been equal to charge-offs. Both net interest
income and the provision for credit losses described above are netted and
included in other noninterest revenues in the Consolidated Condensed Income
Statements.
PROVISION FOR CREDIT LOSSES
The provision for credit losses for the first quarter of 1995 was $8.9
million compared to $6.8 million for the comparable period of 1994. This
increase was primarily due to the Company's desire to maintain a minimum
reserve coverage of impaired assets on credit cards. In 1994, the
Company initiated a program to repurchase nonperforming mortgages from
the securitization trusts in order to lower funding costs on those
mortgages. As a result, in 1994, the Company repurchased approximately
$50 million of nonperforming mortgages and transferred approximately $13
million of off-balance sheet recourse reserves related to these loans to
on-balance sheet reserves. When these nonperforming mortgages were
charged off in 1994 and the first quarter of 1995, the Company did not
need to provide additional amounts for them since reserves had been
specifically provided for these mortgages at their repurchase dates.
These repurchases increased the owned impaired asset level while having
no impact on either the level of managed impaired assets or the provision
for credit losses. At March 31, 1995, approximately $19 million of the
<PAGE>
loans that had been repurchased remained on the balance sheet as either
nonperforming loans or other real estate owned. (See also Asset Quality
below.) The owned impaired asset level was $37.5 million or 2.3% of
receivables at March 31, 1995 compared to $28.6 million or 2.0% of
receivables a year ago.
ASSET QUALITY
The reserve for credit losses is maintained for on-balance sheet
receivables. The reserve is intended to cover credit losses inherent in
the owned loan portfolio. With regard to securitized assets, anticipated
losses and related recourse reserves are reflected in the calculations of
securitization income, amounts due from credit card securitizations and
other assets. Recourse reserves are intended to cover all probable
credit losses over the life of the receivables securitized. The Company
periodically evaluates its on-balance sheet and recourse reserve
requirements and, as appropriate, effects transfers between these
accounts.
The reserve for credit losses on a consolidated owned basis was $39.7
million or 2.4% of receivables at March 31, 1995 compared to $41.6
million or 2.1% of receivables at December 31, 1994 and $34.2 million or
2.4% of receivables at March 31, 1994. The consolidated reserve coverage
of impaired assets was 106.0% at March 31, 1995 compared to 96.1% at year
end 1994 and 119.7% at March 31, 1994.
On the total managed portfolio, impaired assets were $105.0 million or 1.2%
of receivables at March 31, 1995, compared to $102.4 million or 1.3% of
receivables at December 31, 1994 and $96.7 million or 1.8% of receivables
at March 31, 1994. A key credit quality statistic, the 30 day and over
delinquency rate on managed credit cards, dropped to 2.1% at March 31, 1995
from 2.3% a year ago.
On the total owned portfolio, impaired assets were $37.5 million or 2.3%
of receivables at March 31, 1995, compared to $43.3 million or 2.2% of
receivables and $28.6 million or 2.0% of receivables at December 31, 1994
and March 31, 1994, respectively.
The total managed charge-off rate for the first three months of 1995 was
2.1%, down from 2.3% for the full year of 1994 and 2.5% for the first three
months of 1994. The charge-off rate on managed credit cards was 2.2% for
the first three months of 1995, down from 2.5% for the full year of 1994 and
2.7% for the comparable 1994 period. The charge-off rate on managed
mortgage loans was 1.2% for the first three months of 1995, down from 1.7%
for the comparable 1994 period. The Company believes that charge-off rates
on managed mortgages will remain at or be slightly lower than the current
levels for the remainder of 1995.
The charge-off rate on consolidated owned receivables was 2.5% of average
receivables for the first three months of 1995, compared to 2.6% for the
full year of 1994 and 1.8% a year ago. The charge-off rate on owned credit
cards was 2.2% for the first three months of 1995, up from 1.9% for the
full year of 1994 and 1.8% for the comparable 1994 period.
<PAGE>
The following tables provide a summary of impaired assets, delinquencies
and charge-offs, as of and for the year-to-date periods indicated.
March December March
31, 31, 31,
CONSOLIDATED - MANAGED 1995 1994 1994
Nonperforming assets $ 61,627 $ 61,587 $ 65,742
Accruing loans past due 90 days or more 43,401 40,837 30,908
Impaired assets 105,028 102,424 96,650
Total loans 30 days or more delinquent 236,972 220,390 176,206
As a percentage of gross receivables:
Nonperforming assets .7% .8% 1.2%
Accruing loans past due 90 days or more .5 .5 .6
Impaired assets 1.2 1.3 1.8
Total loans 30 days or more delinquent 2.8 2.7 3.3
Net charge-offs:
Amount $ 43,282 $139,890 $ 32,624
As a percentage of average gross
receivables(annualized) 2.1% 2.3% 2.5%
CREDIT CARDS - MANAGED
Nonperforming assets $ 15,843 $ 14,227 $ 12,983
Accruing loans past due 90 days or more 43,274 40,721 30,905
Impaired assets 59,117 54,948 43,888
Total loans 30 days or more delinquent 147,550 133,121 91,723
As a percentage of gross receivables:
Nonperforming assets .2% .2% .3%
Accruing loans past due 90 days or more .6 .6 .8
Impaired assets .9 .8 1.1
Total loans 30 days or more delinquent 2.1 2.0 2.3
Net charge-offs:
Amount $ 37,620 $115,218 $ 26,858
As a percentage of average gross
receivables(annualized) 2.2% 2.5% 2.7%
MORTGAGE LOANS - MANAGED
Nonperforming assets $ 42,892 $ 44,678 $ 50,689
Total loans 30 days or more delinquent 65,572 65,966 69,639
As a percentage of gross receivables:
Nonperforming assets 3.1% 3.3% 4.3%
Total loans 30 days or more delinquent 4.7 4.9 5.9
Net charge-offs:
Amount $ 4,165 $ 20,709 $ 4,964
As a percentage of average gross
receivables(annualized) 1.2% 1.7% 1.7%
LEASES - MANAGED
Nonperforming assets $ 2,892 $ 2,682 $ 2,070
Total loans 30 days or more delinquent 23,461 20,972 14,776
As a percentage of receivables:
Nonperforming assets 1.0% 1.0% 1.1%
Total loans 30 days or more delinquent 8.0 7.9 7.9
Net charge-offs:
Amount $ 1,502 $ 3,961 $ 804
As a percentage of average
receivables(annualized) 2.2% 2.0% 1.9%
<PAGE>
March December March
31, 31, 31,
CONSOLIDATED - OWNED 1995 1994 1994
Reserve for credit losses $39,717 $41,617 $34,174
Nonperforming assets 27,610 31,949 19,808
Accruing loans past due 90 days or more 9,856 11,354 8,749
Impaired assets 37,466 43,303 28,557
Reserve as a percentage of impaired assets 106.0% 96.1% 119.7%
As a percentage of gross receivables:
Reserve 2.4% 2.1% 2.4%
Nonperforming assets 1.7 1.6 1.4
Accruing loans past due 90 days or more .6 .6 .6
Impaired assets 2.3 2.2 2.0
Net charge-offs:
Amount $10,825 $35,293 $ 5,828
As a percentage of average gross
receivables(annualized) 2.5% 2.6% 1.8%
CREDIT CARDS - OWNED
Reserve for credit losses $24,965 $27,486 $21,986
Nonperforming assets 3,736 3,502 3,078
Accruing loans past due 90 days or more 9,729 11,238 8,746
Impaired assets 13,465 14,740 11,824
Reserve as a percentage of impaired assets 185.4% 186.5% 185.9%
As a percentage of gross receivables:
Reserve 1.8% 1.6% 1.8%
Nonperforming assets .3 .2 .2
Accruing loans past due 90 days or more .7 .6 .7
Impaired assets 1.0 .9 1.0
Net charge-offs:
Amount $ 8,228 $22,688 $ 5,108
As a percentage of average gross
receivables(annualized) 2.2% 1.9% 1.8%
MORTGAGE LOANS - OWNED (1)
Reserve for credit losses $ 3,087 $ 5,164 $ 4,914
Nonperforming assets 22,784 27,379 15,896
Reserve as a percentage of impaired assets 13.5% 18.9% 30.9%
As a percentage of gross receivables:
Reserve 2.5% 3.6% 4.4%
Nonperforming assets 18.2 19.2 14.1
Net charge-offs:
Amount $ 2,268 $11,689 $ 476
As a percentage of average gross
receivables(annualized) 6.7% 9.7% 1.6%
LEASES - OWNED
Reserve for credit losses $ 1,269 $ 1,076 $ 1,536
Nonperforming assets 1,090 1,068 834
Reserve as a percentage of impaired assets 116.4% 100.7% 184.2%
As a percentage of receivables:
Reserve 1.5% 1.2% 3.2%
Nonperforming assets 1.3 1.2 1.8
Net charge-offs:
Amount $ 334 $ 914 $ 246
As a percentage of average receivables
(annualized) 1.5% 1.5% 2.1%
(1) Beginning March 1994, the Company initiated a program for repurchasing
nonperforming assets from the securitized portfolios (see "Provision
for Credit Losses").
<PAGE>
NONINTEREST REVENUES
Three Months Ended
March 31,
1995 1994
Credit card securitization income $ 41,069 $32,674
Credit card servicing income 24,872 13,800
Credit card interchange income 19,498 14,006
Income from mortgage banking
activities 10,218 8,205
Leasing revenues, net 9,594 4,593
Insurance revenues, net 5,708 2,910
Other 3,264 3,592
Total noninterest revenues $114,223 $79,780
For the first quarter of 1995, noninterest revenues increased 43.2% to
$114.2 million from $79.8 million for the same period of 1994. Credit card
securitization income increased $8.4 million or 25.7% to $41.1 million as
average securitized credit card receivables grew 85.7% from the comparable
quarter of 1994. For both three month periods, securitized interchange
income has been reclassified from credit card securitization income to
credit card interchange income. Credit card interchange income, which
represents approximately 1.4% of credit card purchases, increased $5.5
million to $19.5 million. Credit card servicing income increased $11.1
million due to higher securitized balances. Leasing revenues, net,
increased $5.0 million to $9.6 million primarily due to a 53.8% growth in
average securitized lease receivables from the comparable quarter of 1994.
Insurance revenues, net, were $5.7 million for the first quarter of 1995,
up from $2.9 million for last year's first quarter. This growth is
attributed to the successful marketing of insurance products in the credit
card, mortgage and leasing businesses.
OPERATING EXPENSES
Three Months Ended
March 31,
1995 1994
Amortization of credit card
deferred origination costs, net $15,401 $ 5,445
Other operating expenses:
Salaries and employee benefits 23,988 20,563
Marketing 9,405 6,384
External processing 5,727 4,657
Postage 4,391 2,701
Credit card fraud losses 4,062 3,507
Telephone expense 2,855 1,793
Equipment expense 2,754 2,055
Professional fees 2,272 1,752
Credit and collection expense 2,144 1,666
Occupancy expense 2,016 1,787
Other 3,126 1,500
Total other operating expenses $62,740 $48,365
Total operating expenses $78,141 $53,810
<PAGE>
The amortization of credit card deferred origination costs, net, increased
from $5.4 million for the first three months of 1994 to $15.4 million for
the first three months of 1995. This increase resulted primarily from
amortization related to the $58 million of credit card origination costs
that have been deferred since the first quarter of 1994. Costs incurred
for credit card originations initiated after May 1993 are being amortized
over 12 months, rather than pursuant to the previous policy of 60 months.
Total other operating expenses of $62.7 million for the three months ended
March 31, 1995 increased 30% from $48.4 million for the same period of
1994. Operating expenses as a percentage of average managed receivables
were 3.0% for the first quarter of 1995, down from 3.7% in the comparable
1994 period. The increase in total other operating expenses is
attributable, in part, to a 14% increase in the number of employees from
1,659 at March 31, 1994 to 1,891 at March 31, 1995 to effectively service
the current and anticipated account growth. Other expenses, including
marketing, external processing, postage and telephone expense showed
increases consistent with the increase in the number of credit card
accounts managed.
LIQUIDITY AND CAPITAL RESOURCES
The Company's goal is to maintain an adequate level of liquidity, both
long- and short-term, through active management of both assets and
liabilities. During the first three months of 1995, the Company, through
its subsidiaries, securitized $800 million of credit card receivables, $116
million of mortgage loans and $45 million of equipment lease receivables.
Cash generated from these transactions was temporarily invested in
short-term, high quality investments at money market rates awaiting
redeployment to pay down borrowings and to fund future credit card,
mortgage and lease receivable growth. At March 31, 1995, the Company had
approximately $419 million of loan and lease receivables and $326 million
of investments available for sale which could be sold to generate
additional liquidity.
The debt securities of Advanta Corp. achieved investment-grade ratings from
the nationally recognized rating agencies in 1993. These ratings have
allowed the Company to further diversify its funding sources. As a result,
in 1994 the Company obtained revolving credit facilities totaling $255
million from a consortium of banks and $200 million in money market bid
lines. At March 31, 1995 the Company had borrowed $75 million on the money
market bid lines. The Company may also sell up to $335 million of medium-
term notes as needed.
In April 1994, the Company, through its subsidiary, Colonial National Bank
USA, reached an agreement with NationsBank of Delaware, N.A., to sell
certain credit card customer relationships which at that time represented
approximately $150 million of securitized credit card receivables (less
than 4% of the Company's managed credit card receivables as of June 30,
1994). While the accounts related to these customers relationships were
transferred to NationsBank upon termination of the securitization trust in
the second quarter of 1995, these accounts are being serviced by Colonial
<PAGE>
National at market rates until the systems conversion to NationsBank is
completed, which is expected to occur early in the third quarter of 1995.
Due to the Company's continuing success in marketing credit cards, the
Company anticipates increasing its marketing expenditures through 1995, in
order to sustain the rapid growth in managed credit card receivables.
While there can be no assurance that this strategy will in fact result in
continued rapid receivable growth, the Company believes that the Company's
credit card offers will continue to appeal to consumers and will thus
enable the Company to continue to increase its share of the domestic bank
credit card market.
Subsequent to quarter end, the Company securitized $575 million of credit
card receivables, $125 million of which were previously included in
securitized receivables, purchased $96 million of mortgage loans and
obtained a $255 million increase in its revolving credit facility, bringing
the total committed facility to $510 million.
INTEREST RATE SENSITIVITY
Interest rate sensitivity refers to net interest income variability
resulting from mismatches between asset and liability indices (basis risk)
and the effects which these changes in market interest rates have on asset
and liability maturity mismatches (gap risk).
The Company attempts to minimize the impact of market interest rate
fluctuations on net interest income and net income by regularly evaluating
the risk inherent in its asset and liability structure, including
securitized assets. This risk arises from continuous changes in the
Company's asset/liability mix, market interest rates, the yield curve,
prepayment trends and the timing of cash flows. Computer simulations are
used to evaluate net interest income volatility under varying rate, spread
and volume projections over monthly time periods of up to two years.
Beginning in the first quarter of 1995, the Company's credit card marketing
efforts were weighted heavily towards variable rate cards priced at a
spread over LIBOR rather than a spread over the prime rate. The Company
believes that this shift will prospectively reduce the basis risk to which
the Company has been subject as the result of maintaining credit card
portfolios indexed to the prime rate while funding certain on-balance sheet
liabilities and frequently securitizing credit card receivables at a spread
over LIBOR.
In managing its interest rate sensitivity position, the Company
periodically securitizes, sells and purchases assets, alters the mix and
term structure of its funding base, changes its investment portfolio and
short-term investment position, and uses derivative financial instruments.
Derivative financial instruments are used for the express purpose of
managing exposure to changes in interest rates and, by policy, are not used
for any speculative purposes (see discussion under "Derivatives
Activities"). The Company has primarily utilized variable rate funding in
pricing its credit card securitization transactions in an attempt to match
the variable rate pricing dynamics of the underlying receivables sold to
the trusts. Variable rate funding is also used on the balance sheet as
well, in support of unsecuritized receivables which carry variable rates.
Although credit card receivable rates are generally set at a spread over
<PAGE>
the prime rate, they often contain interest rate floors. These floors have
the impact of converting the credit card receivables to fixed rate
receivables in a low interest rate environment. In instances when a
significant portion of credit card receivables are at their floors, the
Company may convert part of the underlying funding to a fixed rate by using
interest rate hedges, swaps and fixed rate securitizations. In pricing
mortgage and lease securitizations, both fixed rate and variable rate
funding are used depending upon the characteristics of the underlying
receivables. Additionally, basis risk exists in on-balance sheet funding
as well as securitizing credit card receivables at a spread over LIBOR when
the rate on the underlying assets is indexed to the prime rate. The
underlying liability or coupon on a securitization is often indexed to
LIBOR, and LIBOR does not perfectly correlate to prime. The Company
measures the basis risk resulting from potential variability in the spread
between prime and LIBOR and incorporates such risk into the asset and
liability management process. During 1994, $425 million in prime-LIBOR
corridors were executed in order to provide protection against narrowing of
these spreads. During the first quarter of 1995 there were no additional
prime-LIBOR corridors executed.
Interest rate fluctuations affect net interest income at virtually all
financial institutions. While interest rate volatility does have an effect
on net interest income, other factors also contribute significantly to
changes in net interest income. Specifically, within the credit card
portfolio, pricing decisions and customer behavior regarding convenience
usage affect the yield on the portfolio. These factors may counteract or
exacerbate income changes due to fluctuating interest rates. The Company
closely monitors interest rate movements, competitor pricing and consumer
behavioral changes in its ongoing analysis of net interest income
sensitivity.
DERIVATIVES ACTIVITIES
The Company utilizes derivative financial instruments for the purpose of
managing its exposure to interest rate risk. The Company has a number of
mechanisms in place that enable it to monitor and control both market and
credit risk from these derivatives activities. At the broader level, all
derivatives strategies are managed under the hedging policy approved by the
Board of Directors that details the use of such derivatives and the
individuals authorized to execute derivatives transactions. All derivatives
strategies must be approved by the Company's senior management (President,
Chief Financial Officer and Treasurer).
As part of this approval process, a market risk analysis is completed to
determine the potential impact on the Company from severe negative
(stressed) movements in the market. By policy, derivatives transactions may
only be used to manage the Company's exposure to interest rate risk and may
not be used for speculative purposes. As such, the impact of any
derivatives transaction is calculated using the Company's asset/liability
model to determine its suitability.
Procedures and processes are in place to provide reasonable assurance that
prior to and after the execution of any derivatives strategy, market,
credit and liquidity risks are fully analyzed and incorporated into the
Company's asset/liability and risk measurement models and the proper
accounting treatment for the transaction is identified.
<PAGE>
As of March 31, 1995 and December 31, 1994, all of the Company's
derivatives were designated as hedges or synthetic alterations and were
accounted for as such. For the three months ended March 31, 1995 and the
year ended December 31, 1994, there were no derivatives contracts
terminated prior to scheduled maturity.
The following table summarizes by notional amounts the Company's derivative
instruments:
March 31, December 31,
1995 1994
Interest rate swaps $ 739,735 $ 459,735
Interest rate options:
Caps written 1,140,000 1,100,000
Caps purchased 150,000 110,000
Corridors 425,000 425,000
Forward contracts 86,000 39,000
Total notional amount $2,540,735 $2,133,735
The notional amounts of derivatives do not represent amounts exchanged by
the counterparties and, thus, are not a measure of the Company's exposure
through its use of derivatives. The amounts exchanged are determined by
reference to the notional amounts and the other terms of the derivatives
contracts.
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security holders.
At the Company's Annual Meeting of Stockholders held on April 20,
1995, the following nominees for reelection as directors of the
Company were elected by the votes indicated below:
Director Votes For Votes Withheld
Dennis Alter 14,984,887 17,450
Arthur P. Bellis 14,807,662 194,675
William C. Dunkelberg 14,983,212 19,125
Robert C. Hall 14,977,162 25,175
In addition, at the Annual Meeting the stockholders approved the
proposal to approve the Advanta Management Incentive Plan With Stock
Election IV by the following votes: votes for: 12,656,204; votes
against: 2,168,823; abstentions: 53,665; and broker non-votes:
123,645.
Item 6. Exhibits and Reports on Form 8-K.
(a) The following exhibit is being filed with this Report:
(10) $510 Million Unsecured Revolving Credit Agreement dated
as of May 4, 1995 among Registrant, Advanta National
Bank, Mellon Bank, N.A. as Agent and the several bank
parties thereto.
(b) A report on Form 8-K, dated April 19, 1995, was filed
by the Company setting forth the financial highlights of
the Company's results of operations for the period ended
March 31, 1995. A Financial Data Schedule was included as an
exhibit in this Form 8-K.
<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 thereto duly authorized.
Advanta Corp.
(Registrant)
May 12, 1995 By /s/David Wesselink
Senior Vice President and
Chief Financial Officer
May 12, 1995 By /s/John J. Calamari
Vice President, Finance and
Principal Accounting Officer
<PAGE>
EXHIBIT INDEX
Exhibit Description
2 Inapplicable.
4 Inapplicable.
10 $510 Million Unsecured Revolving
Credit Agreement dated as of
May 4, 1995 among Registrant,
Advanta National Bank, Mellon Bank,
N.A. as Agent and the several bank
parties thereto.
11 Inapplicable.
15 Inapplicable.
18 Inapplicable.
19 Inapplicable
22 Inapplicable.
23 Inapplicable.
24 Inapplicable.
27 Incorporated by reference to Exhibit
27 to the Company's Report on Form
8-K filed April 19, 1995.
99 Inapplicable.
EXECUTED COPY
U.S. $510,000,000
REVOLVING CREDIT AGREEMENT
Dated as of May 4, 1995
Among
ADVANTA CORP. and
ADVANTA NATIONAL BANK, as Borrowers
THE BANKS NAMED HEREIN
as Banks,
MELLON BANK, N.A.
as Agent
and
THE CHASE MANHATTAN BANK, N.A.,
CHEMICAL BANK,
NATIONSBANK OF TEXAS, N.A.,
PNC BANK, NATIONAL ASSOCIATION and
SWISS BANK CORPORATION, NEW YORK BRANCH
as Co-Agents
<PAGE>
Table of Contents
Section Title Page
ARTICLE I DEFINITIONS; CONSTRUCTION..................... 1
1.01 Certain Definitions........................... 1
1.02 Construction.................................. 16
1.03 GAAP/RAP...................................... 17
ARTICLE II THE CREDITS................................... 17
2.01 Revolving Credit Loans........................ 17
2.02 Extension of Expiration Date.................. 19
2.03 The Notes..................................... 20
2.04 Making of Revolving Loans..................... 21
2.05 Facility Fee; Utilization Fee;
Closing Fee................................. 21
(a) Facility Fee............................. 21
(b) Utilization Fee.......................... 22
(c) Closing Fee.............................. 22
2.06 Termination or Reduction...................... 22
2.07 Interest Rates; Maturity Periods;
Transactional Amounts....................... 23
(a) Optional Basis of Borrowing.............. 23
(i) Base Rate Option................... 23
(ii) Euro-Rate Option................... 24
(b) Interest Periods......................... 24
(c) Transactional Amounts.................... 25
(d) Interest After Maturity.................. 25
(e) Euro-Rate Unascertainable;
Impracticability......................... 25
2.08 Prepayments................................... 26
2.09 Interest Payment Dates........................ 27
2.10 Pro Rata Treatment; Payments Generally........ 27
(a) Pro Rata Treatment....................... 27
(b) Payments Generally....................... 27
(c) Interest on Overdue Amounts.............. 28
2.11 Additional Compensation in
Certain Circumstances....................... 28
(a) Increased Costs or Reduced Return
Resulting from Taxes, Reserves,
Capital Adequacy Requirements,
Expenses, etc............................ 28
(b) Indemnity................................ 30
(c) Euro-Rate Reserves....................... 30
2.12 Taxes......................................... 31
(a) Payments Net of Taxes.................... 31
(b) Indemnity................................ 32
(c) Withholding and Backup Withholding....... 32
-i-<PAGE>
2.13 Funding by Branch, Subsidiary or Affiliate.... 33
(a) Notional Funding......................... 33
(b) Actual Funding........................... 34
ARTICLE III REPRESENTATIONS AND WARRANTIES................ 34
3.01 Organization and Qualification................ 34
3.02 Corporate Power and Authorization............. 34
3.03 Audited Annual Financial Statements........... 34
3.04 Consolidating Financial Statements............ 35
3.05 Bank Financial Statements..................... 35
3.06 Absence of Material Adverse Changes........... 35
3.07 Litigation and Regulatory Proceedings......... 35
3.08 No Conflicting Laws or Agreements;
Consents and Approvals...................... 36
3.09 Execution and Binding Effect.................. 36
3.10 Employee Benefits............................. 36
3.11 Taxes......................................... 37
3.12 Regulation U.................................. 37
3.13 Environmental Matters......................... 37
3.14 Investment Company; Bank Holding Company;
Public Utility Holding Company.............. 38
3.15 Capitalization of Insured Subsidiaries........ 39
3.16 Absence of Undisclosed Liabilities............ 39
3.17 Absence of Events of Default.................. 39
3.18 Title to Property............................. 39
3.19 Subsidiaries and Other Investments............ 39
3.20 Compliance with Laws.......................... 40
3.21 Accurate and Complete Disclosure.............. 40
ARTICLE IV CONDITIONS OF LENDING......................... 40
4.01 Closing Date.................................. 40
(a) Agreements; Notes........................ 41
(b) Guaranty Agreement....................... 41
(c) Corporate Proceedings.................... 41
(d) Good Standing Certificates............... 41
(c) Financial Statements..................... 41
(f) Opinion of Counsel....................... 41
(g) Officers' Certificates................... 42
(h) Fees, Expenses, etc...................... 42
(i) Termination of Predecessor Facilities.... 42
(j) Details, Proceedings and Documents....... 42
4.02 Conditions to all Loans....................... 42
(a) Notice................................... 42
(b) Representations and Warranties........... 42
(c) No Defaults.............................. 43
ARTICLE V AFFIRMATIVE COVENANTS......................... 43
5.01 Basic Reporting Requirements.................. 43
(a) Annual Audit Reports..................... 43
(b) Quarterly Consolidated Reports........... 44
-ii-<PAGE>
(c) Bank Financial Statements................ 44
(d) Consolidating Reports.................... 44
(e) Compliance Certificates.................. 45
(f) Asset Quality Reports.................... 45
(g) Certain Other Reports and Information.... 45
(h) Further Information...................... 46
(i) Notice of Certain Events................. 46
(j) Visitation; Verification................. 47
5.02 Insurance..................................... 48
5.03 Payment of Taxes and Other Potential
Charges and Priority Claims................. 48
5.04 Preservation of Existence and Franchises...... 49
5.05 Maintenance of Properties/Business............ 49
5.06 Avoidance of Other Conflicts.................. 49
5.07 Capitalization of Insured Subsidiaries........ 49
5.08 Financial Accounting Practices................ 49
5.09 Use of Proceeds............................... 50
5.10 Continuation of or Change in Business......... 50
5.11 Consolidated Tax Return....................... 50
5.12 Fiscal Year................................... 50
ARTICLE VI NEGATIVE COVENANTS............................ 51
6.01 Financial Covenants........................... 51
(a) Consolidated Tangible Net Worth.......... 51
(b) Double Leverage Ratio.................... 51
(c) Total Liabilities to
Consolidated Tangible Net Worth.......... 51
(d) Consolidated Interest Coverage Ratio..... 51
(e) Contingent Obligations................... 51
(f) Doubtful Accounts Managed and/or Owned... 51
6.02 Liens......................................... 51
6.03 Mergers, Acquisitions, etc.................... 54
6.04 Dispositions of Properties.................... 55
6.05 Dealings with Affiliates...................... 56
6.06 Limitation on Other Restrictions
on Dividends by Subsidiaries, etc........... 56
ARTICLE VII EVENTS OF DEFAULT............................. 58
7.01 Events of Default............................. 58
ARTICLE VIII THE AGENT..................................... 61
8.01 Appointment................................... 61
8.02 Exercise of Powers............................ 61
8.03 Delegation of Duties.......................... 62
8.04 Exculpatory Provisions........................ 62
8.05 Reliance by Agent............................. 63
8.06 Notice of Default............................. 63
8.07 Non-Reliance on Agent and Other Banks......... 64
8.08 Indemnification............................... 64
-iii-<PAGE>
8.09 Agent In Its Individual Capacity.............. 65
8.10 Successor Agent............................... 65
8.11 Calculations.................................. 66
8.12 Holders of Notes.............................. 66
8.13 Agent's Fees.................................. 66
8.14 Funding by Agent.............................. 66
8.15 The Co-Agents................................. 67
ARTICLE IX MISCELLANEOUS................................. 67
9.01 Holidays...................................... 67
9.02 Records....................................... 67
9.03 Amendments and Waivers........................ 67
9.04 No Implied Waiver; Cumulative Remedies........ 69
9.05 Notices....................................... 69
9.06 Expenses; Taxes; Indemnity.................... 69
9.07 Severability.................................. 71
9.08 Prior Understandings.......................... 71
9.09 Duration; Survival............................ 71
9.10 Counterparts.................................. 71
9.11 Limitation on Payments........................ 72
9.12 Set-Off....................................... 72
9.13 Sharing of Collections........................ 72
9.14 Successors and Assigns;
Participations; Assignments................. 73
(a) Successors and Assigns................... 73
(b) Participations........................... 73
(c) Assignments.............................. 74
(d) Register................................. 75
(e) Financial and Other Information.......... 76
(f) Assignments to Federal Reserve Bank...... 76
9.15 Governing Law; Submission to Jurisdiction
Waiver of Jury Trial; Limitation of
Liability................................... 76
(a) Governing Law............................ 76
(b) Certain Waivers.......................... 76A
(c) Limitation of Liability.................. 76A
EXHIBIT A Promissory Note of Advanta Corp............... A-1
EXHIBIT B Promissory Note of Advanta National Bank...... B-1
EXHIBIT C Form of Loan Request.......................... C-1
EXHIBIT D Guaranty and Suretyship Agreement............. D-1
EXHIBIT E Form of Assignment Supplement................. E-1
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SCHEDULES:
3.06 Material Adverse Changes
3.10 Plan Information
3.13(d) Environmental Matters
3.16 Liabilities Disclosures
3.19 Subsidiaries and Other Investments
6.02(a) Existing Liens
-v-
EXECUTED COPY
REVOLVING CREDIT AGREEMENT
This AGREEMENT, dated as of May 4, 1995, by and among
ADVANTA CORP., a Delaware corporation (hereinafter called the
"Company"), ADVANTA NATIONAL BANK, a national banking association
("ANB" and, together with the Company, the "Borrowers"), the
lenders parties hereto from time to time (hereinafter each called
a "Bank" and collectively called the "Banks," as further defined
below), MELLON BANK, N.A., a national banking association, as
agent for the Banks under this Agreement (hereinafter in such
capacity called the "Agent") and CHEMICAL BANK, THE CHASE
MANHATTAN BANK, N.A., NATIONSBANK OF TEXAS, N.A., PNC BANK, N.A.
AND SWISS BANK CORPORATION, NEW YORK BRANCH, as Co-Agents;
PRELIMINARY STATEMENT:
WHEREAS, the Borrowers have requested and the Banks and
the Agent are willing to make available to the Borrowers, upon all
of the terms and conditions herein set forth, a revolving credit
facility;
NOW THEREFORE, in consideration of their mutual
agreements hereinafter set forth and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
1.01. Certain definitions. In addition to other words
and terms defined elsewhere in this Agreement, as used herein the
following words and terms shall have the following meanings,
respectively, unless the context hereof otherwise clearly
requires:
"Active Subsidiary" shall mean any Subsidiary of the
Company which has, at the time of determination, engaged in
any business activity or operations whatsoever (except for
any activity related exclusively to the continuation or
preservation of its corporate existence), either directly or
indirectly and either individually or together with one or
more other such Subsidiaries, for or at any time during the
Rolling Period immediately preceding the date of
determination.
"Affected Bank" shall have the meaning set forth in
Section 2.07(e) hereof.
"Affiliate" of a Person (the "Specified Person") shall
mean (a) any Person which directly or indirectly controls, or
is controlled by, or is under common control with, the
Specified Person or (b) any director or executive officer<PAGE>
(or, in the case of a Person which is not a corporation, any
individual having analogous powers) of the Specified Person
or of a Person which is an Affiliate of the Specified Person
within the meaning of the preceding clause (a). For purposes
of the preceding sentence, "control" of a Person includes the
possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such
Person, whether through the ownership of voting securities,
by contract or otherwise.
"Agreement" shall mean this Revolving Credit Agreement
as amended, modified or supplemented from time to time.
"Applicable Closing Fee Percentage" shall mean, for each
Bank, the percentage set forth below opposite the amount of
the Initial Commitment Amount of such Bank.
Applicable Closing
Initial Commitment Amount Fee Percentage
$25,000,000 or higher .06%
$20,000,000 - $24,999,999 .045%
Less than $20,000,000 .03%
"Applicable Facility Fee Percentage" shall mean, for any
day, (i) .15% for any such day during which the Company
Rating Level is 1-7; (ii) .1875% for any such day during
which the Company Rating Level is 8; (iii) .20% for any such
day during which the Company Rating Level is 9; (iv) .35% for
any such day during which the Company Rating Level is 10; and
(v) .50% for any such day during which the Company Rating
Level is 11. Each change in the Applicable Facility Fee
Percentage resulting from a change of the Company Rating
Level shall become effective on the effective date of such
change in the Company Rating Level.
"Applicable Margin" for a Borrower shall mean, for any
day, the percentage set forth below which corresponds to such
Borrower's Rating Level in effect on any such day. Each
change in a Borrower's Applicable Margin for any Loan which
results from a change in such Borrower's Rating Level shall
become effective on the effective date of such change in the
Borrower's Rating Level.
Rating Level Percentage
1 - 7 .25%
8 .3125%
9 .425%
-2-<PAGE>
10 .65%
11 1.00%
"Applicable Utilization Fee Percentage" of a Borrower
shall mean, for any day, (i) .10% for any such day during
which such Borrower's Rating Level is 1-7; (ii) .125% for any
such day during which such Borrower's Rating Level is 8 or 9;
(iii) .25% for any such day during which such Borrower's
Rating Level is 10; and (iv) .50% for any such day during
which such Borrower's Rating Level is 11. Each change in a
Borrower's Applicable Facility Fee Percentage resulting from
a change of such Borrower's Rating Level shall become
effective on the effective date of such change in the
Borrower's Rating Level.
"Assignment Supplement" shall have the meaning assigned
to such term in Section 9.14(c) hereof.
"Assets" of any Person at any time shall mean the assets
of such Person at such time, determined and consolidated in
accordance with GAAP.
"Bank" shall mean any of the lenders listed on the
signature pages hereof, subject to the provisions of Section
9.14 hereof pertaining to Persons becoming or ceasing to be
"Banks" hereunder.
"Base Rate" and "Base Rate Option" shall have the
meanings assigned to those terms in Section 2.07(a)(i)
hereof.
"Base Rate Loan" shall mean any Loan bearing interest
under the Base Rate Option.
"Business Day" shall mean any day other than a Saturday,
Sunday, public holiday under the laws of the Commonwealth of
Pennsylvania or other day on which banking institutions are
authorized or obligated to close in New York or Pennsylvania.
"Call Reports" shall mean Consolidated Reports of
Condition and Income prepared in accordance with rules
prescribed by the Federal Financial Institutions Examination
Council or any successor thereto.
"CERCLIS" shall mean the Comprehensive Environmental
Response, Compensation and Liability Information System List,
as the same may be amended from time to time.
"Change of Control" shall mean that Dennis Alter shall
cease for any reason (other than by reason of death or
disability) to serve as Chairman of the Board of Directors of
the Company, or shall cease to own directly or indirectly (or
-3-<PAGE>
by or through his estate) at least 10% of the issued and
outstanding voting capital stock of the Company.
"Closing Date" shall mean May 4, 1995.
"CNB" shall mean Colonial National Bank USA, an indirect
wholly owned (except for directors' qualifying shares)
banking Subsidiary of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as
amended and any successor statute of similar import, and
regulations thereunder, in each case as in effect from time
to time. References to sections of the Code shall be
construed to also refer to any successor sections.
"Commitment" and "Current Commitment" shall have the
respective meanings assigned to those terms in Section 2.01
hereof.
"Commitment Percentage" of a Bank at any time shall mean
the Current Commitment of such Bank divided by the Total
Current Commitment, computed to eleven decimal places (i.e.,
one one-billionth of one percent), subject to transfer to
another Bank as provided in Section 9.14 hereof.
"Consolidated Assets" shall mean the Assets of the
Company and its Consolidated Subsidiaries, determined and
consolidated in accordance with GAAP.
"Consolidated EBIT" for any period, with respect to the
Company and its Consolidated Subsidiaries shall mean the sum
of (a) Consolidated Net Income for such period,
(b) Consolidated Interest Expense for such period,
(c) charges against income for foreign, federal, state and
local income taxes for such period, (d) extraordinary losses
to the extent included in determining such Consolidated Net
Income, minus (e) extraordinary gains to the extent included
in determining such Consolidated Net Income, all as
determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Coverage Ratio" for any period
shall mean the ratio of Consolidated EBIT for such period to
Consolidated Interest Expense for such period.
"Consolidated Interest Expense" for any period shall
mean the total interest expense of the Company and its
Consolidated Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Income" shall mean the net income from
continuing operations (after taxes) of the Company and its
Consolidated Subsidiaries, determined and consolidated in
accordance with GAAP, excluding, however, noncash
extraordinary items.
-4-<PAGE>
"Consolidated Net Worth" shall mean the consolidated
stockholder's equity of the Company and its Consolidated
Subsidiaries, determined and consolidated in accordance with
GAAP.
"Consolidated Subsidiaries" at any particular time shall
mean those Subsidiaries of the Company whose accounts are, or
should be, consolidated with those of the Company in
accordance with GAAP.
"Consolidated Tangible Net Worth" shall mean the
consolidated stockholders' equity of the Company and its
Consolidated Subsidiaries, determined and consolidated in
accordance with GAAP, except that there shall be deducted
therefrom all treasury stock and all Intangibles of the
Company and its Consolidated Subsidiaries.
"Contingent Obligation" shall mean any and all
obligations of the Company for Indebtedness of the Company or
of any Person, the liability for which is not absolute but is
instead dependent upon the occurrence of some event or events
including, without limitation, any Guaranty of or by the
Company and all undrawn letters of credit issued for the
account of the Company for which the Company is otherwise
directly or indirectly obligated to make reimbursement upon
any drawing thereunder, provided, however, that the term
"Contingent Obligation" shall not include the obligations of
the Company under the Guaranty Agreement.
"Controlled Group Member" shall mean each trade or
business (whether or not incorporated) which together with
either Borrower is treated as a single employer under
Sections 4001(a)(14) or 4001(b)(1) of ERISA or Sections
414(b), (c), (m) or (o) of the Code.
"Corresponding Source of Funds" shall mean in the case
of any Euro-Rate Loan, the proceeds of hypothetical receipts
by a Notional Euro-Rate Funding Office or by a Bank through a
Notional Euro-Rate Funding Office of one or more Dollar
deposits in the interbank eurodollar market at the beginning
of the Euro-Rate Interest Period applicable to such Loan,
having maturities approximately equal to such Interest Period
and in an aggregate amount approximately equal to such Loan.
"Dollar", "Dollars" and the symbol "$" shall mean lawful
money of the United States of America.
"Double Leverage Ratio" shall mean at any time the ratio
of (a) the Company's aggregate investment in the capital
stock of its Subsidiaries (including the Company's interest
in undistributed earnings of its Subsidiaries) plus goodwill
of the Company and its Consolidated Subsidiaries as
determined in accordance with GAAP to (b) Consolidated Net
Worth.
-5-<PAGE>
"Duff & Phelps" shall mean Duff & Phelps Credit Rating
Company.
"Environment" shall mean (without limitation) all air,
surface water, water vapor, groundwater, drinking water
supply, soil or land, including land surface or subsurface,
and includes all fish, wildlife and all other natural
resources.
"Environmental Affiliate" shall mean, with respect to
any Person, any other Person whose liability (contingent or
otherwise) for any Environmental Claim such Person has
retained, assumed or otherwise is liable for (by Law,
agreement or otherwise).
"Environmental Approvals" shall mean any Governmental
Action pursuant to or required under any federal, state or
local Environmental Law.
"Environmental Claim" shall mean, with respect to any
Person, any action, suit, proceeding, notice, claim,
complaint, lien, demand, request for information or other
communication (written or oral) by any other Person
(including but not limited to any governmental authority,
citizens' group or present or former employee of such Person)
based upon, alleging, asserting or claiming any actual or
potential (a) violation of any Environmental Law, (b)
liability under any Environmental Law or (c) liability for
investigatory costs, cleanup costs, governmental response
costs, natural resources damages, property damages, material
personal injuries, fines or penalties arising out of, based
on or resulting from the presence, or release into the
Environment, of any Environmental Concern Materials at any
location, whether or not owned by such Person.
"Environmental Cleanup Site" shall mean any location
which is listed or proposed for listing on the National
Priorities List (as defined in 40 C.F.R. 300.5), on CERCLIS
or on any similar state list of sites requiring investigation
or cleanup.
"Environmental Concern Materials" shall mean (a) any
flammable substance, explosive, radioactive material,
hazardous material, hazardous waste, toxic substance, solid
waste, pollutant, contaminant or any related material, raw
material, substance, product or by-product or any substance
specified in or regulated by any Environmental Law, (b) any
toxic chemical or other substance from or related to
industrial, commercial or institutional activities, and (c)
asbestos, gasoline, diesel fuel, motor oil, waste and used
oil, heating oil and other petroleum products or compounds,
polycholorinated biphenyls, radon, urea formaldehyde, lead
containing materials, radiation, heat, noise, and other
physical agents.
-6-<PAGE>
"Environmental Law" shall mean any Law, domestic or
foreign, whether now existing or subsequently enacted or
amended, relating to (a) pollution or protection of the
Environment, including natural resources, (b) exposure of
Persons, including but not limited to employees, to
Environmental Concern Materials, (c) protection of the public
safety, health or welfare from the effects of products, by-
products, wastes, emissions, discharges or releases of
Environmental Concern Materials or (d) regulation of the use
or introduction into commerce of Environmental Concern
Materials including their manufacture, formulation,
packaging, labeling, distribution, transportation, handling,
storage or disposal. Without limitation, "Environmental Law"
shall also include any Environmental Approval and the terms
and conditions thereof.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended, and any successor statute of similar
import, and regulations thereunder, in each case as in effect
from time to time. References to sections of ERISA shall be
construed to also refer to any successor sections.
"Euro-Rate" and "Euro-Rate Option" shall have the
meanings assigned to those terms in Section 2.07(a)(ii)
hereof.
"Euro-Rate Loan" shall mean any Loan bearing interest
under the Euro-Rate Option.
"Event of Default" shall mean any of the Events of
Default described in Article VII hereof.
"Expiration Date" shall be the third anniversary of the
Closing Date, or if extended in accordance with Section 2.02,
such extended date.
"Facility Fee" shall have the meaning provided in
Section 2.05(a).
"FDIC" shall mean the Federal Deposit Insurance
Corporation.
"Federal Reserve Board" shall mean the Board of
Governors of the Federal Reserve System.
"Federal Funds Effective Rate" shall have the meaning
assigned to such term in Section 2.07(a)(i) hereof.
"Fitch" shall mean Fitch Investors' Services, Inc.
"GAAP" shall mean generally accepted accounting
principles in the United States of America (as such
principles may change from time to time) applied on a
consistent basis (except for changes in application with
-7-<PAGE>
which the Company's independent certified public accountants
concur), applied both to classification of items and amounts.
"Governmental Action" shall have the meaning set forth
in Section 3.08(b) hereof.
"Guaranty" shall mean, with respect to any Person, any
obligation, contingent or otherwise, of such Person directly
or indirectly guaranteeing any Indebtedness or other payment
obligation of any other Person or in any manner providing for
the payment of any Indebtedness of any other Person or
otherwise protecting the holder of such Indebtedness or other
payment obligation against loss (whether by virtue of
partnership arrangements, by agreement to indemnify, or
purchase assets, goods, securities or services, or to take-
or-pay or otherwise), provided that the term "Guaranty" does
not include endorsements for collection or deposit in the
ordinary course of business.
"Guaranty Agreement" shall mean the Guaranty and
Suretyship Agreement to be delivered by the Company pursuant
to Section 4.01(b) hereof, as amended, modified or
supplemented from time to time.
"Indebtedness" of a Person shall mean:
(i) all indebtedness or liability for or on
account of money borrowed by, or for or on account of
deposits with or advances to, such Person;
(ii) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments;
(iii) all indebtedness or liability for or on
account of property or services purchased or acquired by
such Person except trade accounts that arise in the
ordinary course of business but only so long as such
trade accounts are payable on customary trade terms;
(iv) any amount secured by a Lien on property
owned by such Person (whether or not assumed) and
capitalized lease obligations of such person (without
regard to any limitation of the rights and remedies of
the holder of such Lien or the lessor under such
capitalized lease to repossession or sale of such
property);
(v) the face amount of all letters of credit
issued for the account of such Person and, without
duplication, the unreimbursed amount of all drafts drawn
thereunder, and all other obligations of such Person
associated with such letters of credit or draws thereon;
-8-<PAGE>
(vi) all obligations of such Person in respect of
acceptances or similar obligations issued for the
account of such Person; and
(vii) all obligations of such Person due and owing
under any interest rate or currency protection
agreement, interest rate or currency future, interest
rate or currency option, interest rate or currency swap
or cap or other interest rate or currency hedge
agreement.
"Indemnified Parties" shall have the meaning assigned to
such term in Section 9.06(c) hereof.
"Initial Commitment Amount" shall have the meaning set
forth in Section 2.01 hereof.
"Intangibles" shall mean all intangible Assets
determined in accordance with GAAP, including but not limited
to goodwill, organization costs, patents, copyrights,
trademarks, trade names, franchises, licenses, research and
development expenses, deferred charges (except deferred
acquisition costs), leasehold improvements not recoverable at
the expiration of leases, and 11% of excess mortgage
servicing rights as defined in and determined in accordance
with GAAP (it being understood for purposes hereof that 89%
of such excess mortgage servicing rights shall be deemed to
be tangible Assets) and further including but not limited to
write-ups after the date hereof in the value of Assets above
historical cost less depreciation or amortization required by
GAAP, except for write-ups in the value of (i) marketable
securities to the extent permitted by the GAAP valuation
principle of "lower of cost or market", and (ii) investments
in common stock accounted for by the equity method, to the
extent permitted by GAAP.
"Insured Subsidiary" shall mean a Subsidiary of the
Company which is an "insured depository institution" under
and as defined in the Federal Deposit Insurance Act (12
U.S.C. 1813(c)(3)) or any successor statute, provided,
however, that the term "Insured Subsidiary" shall not include
Advanta Financial Corp. until such time as its shareholders'
equity first exceeds $50,000,000.
"Interest Period" shall have the meaning assigned to
that term in Section 2.07(b) hereof.
"Law" shall mean any law (including common law),
constitution, statute, treaty, regulation, rule, ordinance,
order, injunction, writ, decree or award of any Official
Body.
"Lien" shall mean any mortgage, deed of trust, pledge,
lien, security interest, charge or other encumbrance or
-9-<PAGE>
security arrangement of any nature whatsoever, including but
not limited to any conditional sale or title retention
arrangement, and any assignment, deposit arrangement or lease
intended as, or having the effect of, security.
"Loan" shall mean any loan made by a Bank to a Borrower
under this Agreement, and "Loans" shall mean all Loans made
by the Banks under this Agreement.
"Loan Documents" shall mean this Agreement, the Notes,
the Assignment Supplements, the Guaranty Agreement and all
other ancillary agreements, instruments, certificates and/or
documents which are required to be or are otherwise executed
and delivered by a Borrower to the Agent and/or to any Bank
in connection with this Agreement, and all other agreements
extending, renewing, refinancing or refunding any
indebtedness, obligation or liability arising under any of
the foregoing, in each case as the same may be amended,
supplemented or modified from time to time hereafter.
"London Business Day" shall mean a Business Day (as
herein defined) which is also a day for dealing in deposits
in Dollars by and among banks in the London interbank market.
"Material Subsidiary" shall mean: (i) ANB and (ii) any
Subsidiary of the Company which at the time of determination
has or had Assets constituting 10% or more of Consolidated
Assets at any time during the Rolling Period immediately
preceding the date of determination or accounts for 10% or
more of Consolidated Net Income for the Rolling Period
immediately preceding the date of determination. When used
with respect to any transaction or series of related
transactions, the term "Material Subsidiary" shall include
any Person which, after giving effect thereto, would be a
Material Subsidiary.
"Maturity Date" shall have the meaning assigned to that
term in Section 2.07(b) hereof.
"Moody's" shall mean Moody's Investors Service, Inc.
"month", with respect to a Euro-Rate Interest Period,
means the interval between Fixed Dates in consecutive
calendar months as to such Euro-Rate Interest Period. The
"Fixed Date" in a calendar month at the end of any Euro-Rate
Interest Period shall mean the day in such calendar month
numerically corresponding to the first day of such Euro-Rate
Interest Period, except:
(i) if there is no such numerically corresponding
day in a calendar month, the Fixed Date for such
calendar month shall mean the last London Business Day
of such calendar month;
-10-<PAGE>
(ii) if the first day of such Euro-Rate Interest
Period is the last day of a calendar month, the Fixed
Date for any later calendar month shall mean the last
London Business Day of such calendar month; and
(iii) otherwise, if a numerically corresponding
day in a given calendar month is not a London Business
Day, the Fixed Date for such calendar month shall mean
the next following day that is a London Business Day but
not later than the last London Business Day of such
calendar month.
"Multiemployer Plan" shall mean at any time any employee
benefit plan which is a "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA and to which either
Borrower or any Controlled Group Member has or had an
obligation to contribute within the preceding six years.
"Note" shall mean a promissory note of a Borrower
executed and delivered under this Agreement, or any note
executed and delivered pursuant to Section 2.03 or 2.13
hereof, together with all extensions, renewals, refinancings
or refundings in whole or part, all of which are collectively
referred to as the "Notes".
"Notional Euro-Rate Funding Office" shall have the
meaning given to that term in Section 2.13(a) hereof.
"Office", when used in connection with the Agent, shall
mean its office located at One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258, or at such other office or
offices within the United States of the Agent or branch,
Subsidiary or Affiliate thereof as may be designated in
writing from time to time by the Agent to the Company and the
Banks.
"Official Body" shall mean any government or political
subdivision or any agency, authority, bureau, central bank,
commission, department or instrumentality of either, or any
court, tribunal, grand jury or arbitrator, in each case
whether foreign or domestic.
"Option" or "Interest Rate Option" shall mean the Base
Rate Option or the Euro-Rate Option, as the case may be.
"Participant" shall have the meaning assigned to such
term in Section 9.14(b) hereof.
"PBGC" means the Pension Benefit Guaranty Corporation
established under Title IV of ERISA or any other governmental
agency, department or instrumentality succeeding to the
functions of said corporation.
-11-<PAGE>
"Pension-Related Event" shall mean any of the following
events or conditions:
(a) Any action is taken by any Person (i) to
terminate, or which would result in the termination of,
a Plan, either pursuant to its terms or by operation of
law (including, without limitation, any amendment of a
Plan which would result in a termination under Section
4041(e) of ERISA), other than in a "standard
termination" under Section 4041(b) of ERISA or (ii) to
have a trustee appointed for a Plan pursuant to Section
4042 of ERISA;
(b) PBGC notifies any Person of its determination
that an event described in Section 4042 of ERISA has
occurred with respect to a Plan, that a Plan should be
terminated, or that a trustee should be appointed for a
Plan;
(c) Any Reportable Event occurs with respect to a
Plan;
(d) Any action occurs or is taken which could
result in either Borrower becoming subject to liability
for a complete or partial withdrawal by any Person from
a Multiemployer Plan (including, without limitation,
seller liability incurred under Section 4204(a)(2) of
ERISA), or a Borrower or any Controlled Group Member
receives from any Person a notice or demand for payment
on account of any such alleged or asserted liability; or
(e) (i) There occurs any failure to meet the
minimum funding standard under Section 302 of ERISA or
Section 412 of the Code with respect to a Plan, or any
tax return is filed showing any tax payable under
Section 4971(a) of the Code with respect to any such
failure, or either Borrower or any Controlled Group
Member receives a notice of deficiency from the Internal
Revenue Service with respect to any alleged or asserted
such failure, and the aggregate amount of unpaid or
delinquent contributions exceeds $100,000 and continues
uncured for 30 days after the Company has knowledge or
receives notice thereof from the Internal Revenue
Service or the Agent or (ii) any request is made by any
Person for a variance from the minimum funding standard,
or an extension of the period for amortizing unfunded
liabilities, with respect to a Plan.
"Permitted Lien" shall mean a Lien permitted by Section
6.02 hereof.
"Person" or "person" shall mean an individual,
corporation, partnership, trust, unincorporated association,
joint venture, joint-stock company, government (including
-12-<PAGE>
political subdivisions), governmental authority or agency, or
any other entity.
"Plan" means any employee pension benefit plan within
the meaning of Section 3(2) of ERISA (other than a
Multiemployer Plan) covered by Title IV of ERISA by reason of
Section 4021 of ERISA, of which either Borrower or any
Controlled Group Member is or has been within the preceding
five years a "contributing sponsor" within the meaning of
Section 4001(a)(13) of ERISA, or which is or has been within
the preceding five years maintained for employees of either
Borrower or any Controlled Group Member.
"Postretirement Benefits" shall mean any benefits, other
than retirement income, provided by the Company and its
Subsidiaries to retired employees, or to their spouses,
dependents or beneficiaries, including, without limitation,
group medical insurance or benefits, or group life insurance
or death benefits.
"Postretirement Benefit Obligation" shall mean that
portion of the actuarial present value of all Postretirement
Benefits expected to be provided by the Company and its
Subsidiaries which is attributable to employees' service
rendered to the date of determination (assuming that such
liability accrues ratably over an employee's working life to
the earlier of his date of retirement or the date on which
the employee would first become eligible for full benefits),
reduced by the fair market value as of the date of
determination of any Assets which are segregated from the
Assets of the Company or a Subsidiary and which have been
restricted so that they cannot be used for any purpose other
than to provide Postretirement Benefits or to defray related
expenses.
"Potential Default" shall mean any event or condition
which with notice, passage of time or a determination by the
Agent, or any combination of the foregoing, would constitute
an Event of Default.
"Primary Federal Regulator," when used with respect to
an Insured Subsidiary, shall mean the "appropriate Federal
banking agency" for such Insured Subsidiary under and as
defined in the Federal Deposit Insurance Act, as amended (12
U.S.C. 1813(q)), or any successor statute.
"Pro Rata" shall mean from or to each Bank in proportion
to its Commitment Percentage.
"Purchasing Bank" shall have the meaning assigned to
such term in Section 9.14(c) hereof.
"RAP" shall mean regulatory accounting principles as in
effect from time to time.
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"Rating Level" of a Borrower shall mean the number set
forth below in the column entitled "Rating Level" which
corresponds to the ratings assigned to the senior long-term
unsecured debt of such Borrower by Moody's, S&P, Fitch, Duff
& Phelps or Thomson's. If ANB's long-term senior unsecured
debt is not rated by any of the foregoing, then the ratings
of the Company's long-term senior unsecured debt will be used
to determine the Rating Level of both the Company and ANB.
If the Company (or ANB, if applicable) is rated by two or
more agencies and different Rating Levels result, then the
Rating Level shall be that which corresponds to the lower of
the two highest ratings. Each change in a Borrower's Rating
Level shall take effect on the effective date of any change
in the Company's (or ANB's, if applicable) long-term senior
unsecured debt rating.
Senior Debt Ratings of Company
(or of ANB, if applicable)
Rating Duff &
Level Moody's S&P Fitch Phelps Thomson's
1 Aaa AAA AAA AAA AAA
2 Aa1 AA+ AA+ AA+ AA+
3 Aa2 AA AA AA AA
4 Aa3 AA- AA- AA- AA-
5 A1 A+ A+ A+ A+
6 A2 A A A A
7 A3 A- A- A- A-
8 Baal BBB+ BBB+ BBB+ BBB+
9 Baa2 BBB BBB BBB BBB
10 Baa3 BBB- BBB- BBB- BBB-
11 Below Below Below Below Below
Baa3 BBB- BBB- BBB- BBB-
or Not or Not or Not or Not or Not
Rated Rated Rated Rated Rated
"Reportable Event" means (i) a reportable event
described in Section 4043 of ERISA and regulations thereunder
for which the thirty-day notice period has not been waived,
(ii) a withdrawal by a substantial employer from a Plan to
which more than one employer contributes, as referred to in
Section 4063(b) of ERISA, (iii) a cessation of operations at
a facility causing more than twenty percent (20%) of Plan
participants to be separated from employment, as referred to
in Section 4068(f) of ERISA or (iv) a failure to make a
required installment or other payment with respect to a Plan
when due in accordance with Section 412 of the Code or
Section 302 of ERISA which causes the total unpaid balance of
missed installments and payments (including unpaid interest)
to exceed $750,000.
-14-<PAGE>
"Register" shall have the meaning provided in Section
9.14(d).
"Required Banks" shall mean, as of any date, Banks which
have made Loans constituting, in the aggregate, at least
66 2/3% of the principal amount of Loans outstanding on such
date, or if no Loans are outstanding on such date, Banks
which have Current Commitments constituting, in the
aggregate, at least 66 2/3% of the Total Current Commitments
of all the Banks.
"Responsible Officer" of a Borrower shall mean the Chief
Executive Officer, Chief Financial Officer, President,
Treasurer or Controller of such Borrower, or such other
officer or officers of such Borrower as such Borrower may
designate from time to time and otherwise acceptable to the
Agent.
"Rolling Period" shall mean with respect to any fiscal
quarter, such fiscal quarter and the three immediately
preceding fiscal quarters considered as a single accounting
period.
"Set" of Loans shall mean those Loans made concurrently
by the Banks hereunder requested by a Borrower to be made on
a given day, having the same Maturity Date and bearing
interest at the same Interest Rate Option.
"S&P" shall mean Standard & Poor's Ratings Group.
"Standard Notice" shall mean an irrevocable notice
provided to the Agent on a Business Day which is
(i) the same Business Day in the case of any Set
of Base Rate Loans;
(ii) at least three London Business Days in advance
in the case of any Set of Euro-Rate Loans.
Standard Notice must be provided on or before 12:00 o'clock
noon, Pittsburgh time, on the last day permitted for such
notice.
"Stock Payment" by any Person shall mean any dividend,
distribution or payment of any nature (whether in cash,
securities, or other property) on account of or in respect of
any shares of the capital stock (or warrants, options or
rights therefor) of such Person, including but not limited to
any payment on account of the purchase, redemption,
retirement, defeasance or acquisition of any shares of the
capital stock (or warrants, options or rights therefor) of
such Person, in each case regardless of whether required by
the terms of such capital stock (or warrants, options or
rights) or any other agreement or instrument.
-15-<PAGE>
"Subsidiary" with respect to any Person shall mean any
corporation, association, joint venture, partnership or other
business entity (whether now existing or hereafter organized)
of which a majority (by number of shares or number of votes)
of any class of outstanding capital stock normally entitled
to vote or other ownership interest having ordinary voting
power is at the time as of which any determination is being
made, owned or controlled directly or indirectly by such
Person or by such Person and one or more Subsidiaries of such
Person, provided, however, that any entity in which a Person
has made any equity investment which qualifies as an equity
investment under venture capital accounting principles is
specifically excluded for all purposes of this definition.
"Thomson's" shall mean Thomson BankWatch.
"Total Commitment" or "Total Current Commitment" shall
have the meaning assigned to such term in Section 2.01
hereof.
"Total Liabilities" at any time shall mean the "total
liabilities" of the Company and all Uninsured Subsidiaries at
such time, determined in accordance with GAAP.
"Uninsured Subsidiaries" of the Company shall mean all
Subsidiaries of the Company which are not Insured
Subsidiaries.
"Utilization Fee" shall have the meaning provided in
Section 2.05(b).
1.02. Construction. Unless the context of this
Agreement otherwise clearly requires, references to the plural
include the singular, the singular the plural and the part the
whole, and "or" has the inclusive meaning represented by the
phrase "and/or". References in this Agreement to "determination"
by the Agent or the Banks or any Bank include good faith estimates
by the Agent or the Banks or any Bank (in the case of quantitative
determinations) and good faith beliefs by the Agent or the Banks
or any Bank (in the case of qualitative determinations). The
words "hereof", "herein", "hereunder" and similar terms in this
Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement. The section and other
headings contained in this Agreement and the Table of Contents
preceding this Agreement are for reference purposes only and shall
not control or affect the construction of this Agreement or the
interpretation thereof in any respect. Section, subsection and
exhibit references are to this Agreement unless otherwise
specified. All of the times set forth herein shall, unless
otherwise expressly noted, refer to the time in Pittsburgh,
Pennsylvania.
1.03. GAAP/RAP. Notwithstanding the definitions of
GAAP and RAP contained herein, if any change in GAAP or RAP, as
-16-<PAGE>
the case may be, after the date of this Agreement is or shall be
required to be applied to transactions then or thereafter in
existence, and (a) a violation of one or more provisions of this
Agreement shall have occurred (or in the opinion of the Agent or
the Company would be likely to occur) which would not have
occurred or be likely to occur if no change in accounting
principles had taken place or (b) the effect of such change is or
shall likely be to distort materially the effect of any of the
definitions of financial terms in Article I hereof or any of the
covenants of the Borrowers so that the intended economic effect
thereof will not in fact be accomplished, the Borrowers and the
Banks agree in such event to negotiate in good faith an amendment
of this Agreement which shall approximate to the extent possible
the economic effect of the original provisions after taking into
account such change in GAAP or RAP, as the case may be. If in the
event of any such change in GAAP or RAP the Borrowers and the
Banks shall be unable to agree on an amendment of this Agreement
as provided in the preceding sentence, then for purposes of the
provision or provisions so affected, GAAP or RAP, as the case may
be, shall mean GAAP or RAP as in effect prior to such change.
ARTICLE II
THE CREDITS
2.01. Revolving Credit Loans. Subject to the terms and
conditions and relying upon the representations and warranties
herein set forth, each Bank severally agrees (such agreement being
herein called such Bank's "Commitment") to make Loans to the
Company or to ANB at any time or from time to time on or after the
Closing Date and to but not including the earlier of the
Expiration Date or the termination of the Commitment of such Bank,
in a combined aggregate principal amount for both Borrowers not
exceeding at any one time outstanding the amount of such Bank's
Current Commitment. The "Current Commitment" of each Bank at any
time shall mean the "Initial Commitment Amount" set opposite its
name below as such amount may have been reduced under Section 2.06
hereof at such time, and subject to transfer to another Bank as
provided in Section 9.14 hereof. Each Set of such Loans shall be
made Pro Rata by the Banks in accordance with the Commitment
Percentage of each Bank:
Approximate
Initial Initial
Commitment Commitment
Name of Bank Amount Percentage
Mellon Bank, N.A. $30,000,000 5.88235%
The Chase Manhattan Bank, N.A. 25,000,000 4.90196
Chemical Bank 25,000,000 4.90196
NationsBank of Texas, N.A. 25,000,000 4.90196
PNC Bank, National Association 25,000,000 4.90196
-17-<PAGE>
Swiss Bank Corporation,
New York Branch 25,000,000 4.90196
CIBC Inc. 20,000,000 3.92157
The First National Bank of Chicago 20,000,000 3.92157
Shawmut Bank Connecticut, N.A. 20,000,000 3.92157
The Bank of New York 15,000,000 2.94118
The Bank of Tokyo Trust Company 15,000,000 2.94118
Commerzbank AG, New York Branch 15,000,000 2.94118
Caisse Nationale de Credit Agricole 15,000,000 2.94118
Deutsche Bank AG, New York
and/or Cayman Islands Branches 15,000,000 2.94118
Dresdner Bank AG, New York
and Grand Cayman Branches 15,000,000 2.94118
First Hawaiian Bank 15,000,000 2.94118
First Interstate Bank of California 15,000,000 2.94118
Harris Trust and Savings Bank 15,000,000 2.94118
Lloyds Bank Plc 15,000,000 2.94118
Meridian Bank 15,000,000 2.94118
Morgan Guaranty Trust
Company of New York 15,000,000 2.94118
Union Bank 15,000,000 2.94118
Bank of America Illinois 10,000,000 1.96078
The Bank of California, N.A. 10,000,000 1.96078
Credit Suisse 10,000,000 1.96078
The Dai-Ichi Kangyo Bank, Ltd.,
New York Branch 10,000,000 1.96078
The First National Bank of Maryland 10,000,000 1.96078
LaSalle National Bank 10,000,000 1.96078
The Northern Trust Company 10,000,000 1.96078
Union Bank of Switzerland 10,000,000 1.96078
Westdeutsche Landesbank
Girozentrale, New York and
Cayman Islands Branches 10,000,000 1.96078
The Yasuda Trust & Banking Co., Ltd. 10,000,000 1.96078
Total Commitment $510,000,000 100.00000%
Within such limits of time and amount and subject to the
provisions of this Agreement, the Company and ANB may borrow,
repay and reborrow hereunder. The aggregate Current Commitments
of all the Banks at any time is sometimes referred to as the
"Total Commitment" or "Total Current Commitment".
2.02. Extension of Expiration Date. (a) Provided that
no Potential Default or Event of Default shall have occurred and
be continuing, the Company may, prior to the date of each of the
first and second anniversaries of the Closing Date hereof (each an
"Anniversary Date"), request that the then effective Expiration
Date be extended (in each case) for one additional year by
providing written notice to the Agent requesting such extension
not earlier than 120 days nor later than 90 days before each such
Anniversary Date hereof (each an "Extension Request") . Any
-18-<PAGE>
Extension Request shall be accompanied by a certificate of a
Responsible Officer of the Company (an "Extension Certificate"),
dated the date of such Extension Request, to the effects that (1)
the representations and warranties of the Company contained in
Article III hereof (except for Sections 3.06, 3.15 and 3.19
hereof, which are made solely as of the Closing Date) are true and
correct in all material respects on and as of the date of such
Extension Request and (2) no Potential Default or Event of Default
has occurred and is continuing. The Agent shall, promptly upon
its receipt of any Extension Request, notify the Banks of such
request. At least thirty days prior to such Anniversary Date,
each Bank shall provide the Agent with written notice of its
approval or denial of the Company's Extension Request which
approval or denial shall be in the sole and absolute discretion of
each Bank (it being understood that the failure of any Bank to
provide such notice shall be deemed a rejection of the Extension
Request). Promptly upon receipt of such notice (or deemed notice)
from each Bank, the Agent shall notify the Company of the approval
or denial by each Bank of the Extension Request.
(b) Any extension of the Expiration Date shall be
effective only if approved by the Required Banks and shall be
binding only upon the Banks approving such Extension Request.
Upon the approval of the Required Banks of any Extension Request,
but effective on the then effective Expiration Date, and provided
that no Potential Default or Event of Default shall then have
occurred and be continuing, the Expiration Date shall be
automatically extended for a period of one year from the then
effective Expiration Date to the extent of the Current Commitments
of the Banks approving such extension. Failure of the Agent to
receive notice from the Company to the contrary before the date of
such extension shall constitute a representation and warranty by
the Company to the same effects as the Extension Certificate but
as of the date of such extension. In the event any Bank denies
(or is deemed to have denied) an Extension Request (each a "Non-
Extending Bank") which is otherwise approved by the Required Banks
then on the then scheduled Expiration Date or on such earlier date
as the Company may request, (i) such Non-Extending Bank's
Commitment shall terminate and taking into account any purchase of
the Notes of such Non-Extending Bank by a Replacement Bank as
provided below, the Borrowers shall pay to the Agent for
distribution to such Non-Extending Bank, the unpaid principal
balance of the Loans of such Non-Extending Bank together with
accrued and unpaid interest, fees or other amounts due such Non-
Extending Bank pursuant to this Agreement; and (ii) the Company
may request another Bank or Banks (each a "Replacement Bank") or,
with the prior consent of the Agent (which consent shall not be
unreasonably withheld), other bank or banks (each, also a
"Replacement Bank") to assume all or part of the Commitment of
such Non-Extending Bank. Upon any part of the Commitment of a
Non-Extending Bank being assumed by a Replacement Bank, such
Replacement Bank shall, to the extent of the Commitment it has so
assumed, purchase the Notes of such Non-Extending Bank, which
shall sell the same without recourse or warranty (except as to the
-19-<PAGE>
amount due thereon, its title to such Notes and its right to sell
the same) to such Replacement Bank at a price in immediately
available funds equal to the outstanding principal amount of the
Loans of the Non-Extending Bank assumed whereupon (a) the then
effective Expiration Date with respect to the Commitment assumed
shall be extended for the period requested by the Company
(effective and subject to the conditions as aforesaid), (b) each
Replacement Bank, if applicable, shall be deemed to be a "Bank"
for purposes of this Agreement, (c) the Borrowers shall pay to the
Non-Extending Bank accrued and unpaid interest, fees and any other
amounts due such Non-Extending Bank hereunder with respect to its
Notes and Commitment (except with respect to any portion thereof
retained by the Non-Extending Bank) and (d) each Non-Extending
Bank shall cease to be a "Bank" for purposes of this Agreement
(except with respect to any unpaid principal, interest, fees or
other amounts accrued but not then due on any portion of its
Commitment and Notes it has retained and to its rights hereunder
to be reimbursed for costs and expenses, and to indemnification
with respect to matters attributable to events, acts or conditions
occurring prior to such assumption and purchase) and shall no
longer have any obligations hereunder.
2.03. The Notes. The obligations of each of the
Company and ANB to repay the aggregate unpaid principal amount of
the Loans made by each Bank to such Borrower hereunder and to pay
interest thereon shall be evidenced in part by a single promissory
note of such Borrower for each Bank dated on or prior to the
Closing Date in substantially the form attached hereto as Exhibit
A or Exhibit B, as the case may be, with the blanks appropriately
filled and payable to the order of the Bank in the amount of the
lesser of such Bank's Commitment or the unpaid principal amount of
all Loans made to such Borrower by such Bank. The outstanding
principal amount of each Note and of each Loan, the unpaid
interest accrued thereon, the interest rate or rates applicable
and the Interest Period applicable to each Loan shall be
determined from the Agent's records, which shall be presumed
correct absent manifest error. The executed Notes shall be
delivered by the Borrowers to the Agent on or prior to the Closing
Date, and the Agent shall promptly furnish such Notes to the
respective Banks.
2.04. Making of Revolving Loans. (a) Whenever a
Borrower desires that the Banks make a Set of Loans to such
Borrower hereunder, it shall give Standard Notice thereof to the
Agent setting forth the following information substantially in the
form of Loan Request attached hereto as Exhibit C:
(i) The date, which shall be a Business Day, on which
such Loans are to be made;
(ii) The Interest Rate Option applicable to such Set of
Loans, selected in accordance with Section 2.07(a) hereof;
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(iii) The Interest Period to apply to such Set of Loans,
selected in accordance with Section 2.07(b) hereof; and
(iv) The total principal amount of such Set of Loans,
selected in accordance with Section 2.07(c) hereof.
Standard Notice having been so given, the Agent shall promptly
advise each Bank of the information set forth therein and of the
amount of such Bank's Loan. On the date specified in such Notice
each Bank shall make the proceeds of its Loan available to the
Borrower so requesting at the Agent's Office no later than 2:30
o'clock p.m., in funds immediately available at such Office. The
failure of any Bank to fund any Loan required of such Bank
hereunder shall not impose any increases in the obligations of the
other Banks hereunder, but such failure shall not relieve the
other Banks of their obligations to lend hereunder. The proceeds
of each Set of Loans may be applied by the Agent in whole or in
part ratably against amounts then due and payable by such Borrower
to the Agent or any Bank hereunder.
(b) Absent contrary notice from the Borrower by 12:00
o'clock noon, three Business Days prior to any Maturity Date of a
set of Loans of such Borrower, such Borrower shall, at the Agent's
option, be deemed to have given the Agent notice at such time
pursuant to Section 2.04(a) hereof to the effect that such
Borrower requests that the Banks make a Set of Loans to such
Borrower on such Maturity Date at the Base Rate Option (1) in an
aggregate principal amount equal to the aggregate principal amount
of the Loans of such Borrower becoming due and payable on such
Maturity Date and (2) having an Interest Period of seven days or,
if less, equal to the number of days remaining until the
Expiration Date.
2.05. Facility Fee; Utilization Fee; Closing Fee.
(a) Facility Fee. The Company agrees as a consideration
for the Commitments of the Banks hereunder, to pay to the Agent
for the Pro Rata account of the Banks, a facility fee (the
"Facility Fee") for the period from the Closing Date to and
including the Expiration Date calculated (based on a year of 360
days and actual days elapsed) at a rate per annum equal to (and in
the amount of) the Applicable Facility Fee Percentage of the daily
average aggregate Current Commitments in effect during the
calendar quarter (or other period, if shorter than a calendar
quarter) for which the Facility Fee is to be determined. The
Facility Fee shall be payable quarterly in arrears beginning on
July 1, 1995 (for the period from the Closing Date through June
30, 1995) and on the first day of each October, January, April and
July thereafter, and on the Expiration Date or the date of
complete termination of the Commitments of the Banks hereunder, in
each case for the immediately preceding calendar quarter or other
period for which such fee has not been paid.
-21-<PAGE>
(b) Utilization Fee. Each Borrower agrees as a
consideration for the Commitments of the Banks hereunder and in
addition to any other fees payable by the Borrowers pursuant
hereto, to pay to the Agent for the Pro Rata account of the Banks,
for each day from the Closing Date to and including the Expiration
Date on which the aggregate principal amount of all Loans to both
Borrowers outstanding hereunder exceeds 50% of the Total Current
Commitments on such day, a utilization fee (the "Utilization Fee")
equal to (and in the amount of) (i) one three hundred sixtieth
(1/360) times (ii) the product of (A) such Borrower's Applicable
Utilization Fee Percentage for such day, times (B) the aggregate
principal amount of all Loans to such Borrower outstanding
hereunder on such day, provided, however, that no Utilization Fee
shall be payable for, and there shall be excluded from the
calculation of the Utilization Fee, any day on which the aggregate
principal amount of all Loans to both Borrowers outstanding
hereunder is 50% or less of the Total Current Commitments on such
day. The Utilization Fee shall be payable quarterly in arrears
beginning on July 1, 1995 (for the period from the Closing Date
through June 30, 1995) and on the first day of each October,
January, April and July thereafter, and on the Expiration Date or
the date of complete termination of the Commitments of the Banks
hereunder, in each case for the immediately preceding calendar
quarter or other period for which such Utilization Fee has not
been paid.
(c) Closing Fee. The Company agrees, as a
consideration for the Commitments of the Banks hereunder and in
addition to all other fees payable by the Company pursuant hereto,
to pay to the Agent on or before the Closing Date, for the account
of each Bank a closing fee (the "Closing Fee") in an aggregate
amount equal to the Applicable Closing Fee Percentage for each
such Bank multiplied by the Initial Commitment Amount of each such
Bank.
2.06. Termination or Reduction. The Company may at any
time at which there are no Loans outstanding hereunder terminate
in whole the Total Current Commitments of the Banks or at any time
or from time to time terminate Pro Rata in part the Current
Commitments of the Banks to an amount not less than the sum of the
aggregate principal amount of the Loans then outstanding plus the
principal amount of all Loans not yet made as to which notice has
been given by the Company or ANB under Section 2.04, in either
case by giving not less than ten (10) Business Days' prior written
or telephonic notice confirmed in writing to the Agent; provided
that any such partial termination shall be in a minimum aggregate
amount of $1,000,000 or an integral multiple thereof; and provided
further that the minimum Total Current Commitments shall be at
least $51,000,000 after giving effect to any partial termination.
After each such partial termination, the Facility Fee shall be
calculated upon the amount of the Total Current Commitments of the
Banks as so reduced. Any partial or complete termination of the
Current Commitments pursuant hereto shall be permanent and
irrevocable and may not thereafter be reinstated.
-22-<PAGE>
2.07. Interest Rates; Maturity Periods; Transactional
Amounts.
(a) Optional Basis of Borrowing. Each Loan shall bear
interest for each day until due on a single basis selected by the
respective Borrower from among the Interest Rate Options set forth
below, it being understood that subject to the provisions of this
Agreement all Loans within a single Set of Loans shall be subject
to the same Option, but the Borrowers may select different Options
to apply simultaneously to different Sets of Loans:
(i) Base Rate Option: A rate per annum (computed on
the basis of a year of 365 or 366 days, as the case may be)
for each day equal to the Base Rate for such day, such
interest rate to change automatically from time to time
effective as of the effective date of each change in the Base
Rate. "Base Rate", as used herein, shall mean the interest
rate per annum equal to the higher of: (A) the Prime Rate
for such day; or (B) the Federal Funds Effective Rate for
such day plus 1/2 of 1%. As used herein "Prime Rate" shall
mean that rate of interest per annum announced from time to
time by Mellon Bank, N.A. as its Prime Rate. The Prime Rate
may be greater or less than other interest rates charged by
Mellon Bank, N.A. (or any of the Banks) to other borrowers
and is not solely based or dependent upon the interest rate
which Mellon Bank, N.A. (or any other Bank) may charge a
particular borrower or class of borrowers. "Federal Funds
Effective Rate" for any day, as used herein, shall mean the
rate per annum (rounded upward to the nearest 1/100 of 1%)
determined by the Agent (which determination shall be
conclusive) to be the rate per annum announced by the Federal
Reserve Bank of New York (or any successor) on such day as
being the weighted average of the rates on overnight Federal
funds transactions arranged by Federal funds brokers on the
previous trading day, as computed and announced by such
Federal Reserve Bank (or any successor) in substantially the
same manner as such Federal Reserve Bank computes and
announces the weighted average it refers to as the "Federal
Funds Effective Rate" as of the date of this Agreement;
provided, if such Federal Reserve Bank (or its successor)
does not announce such rate on any day under circumstances
that are temporary, the "Federal Funds Effective Rate" for
such day shall be the Federal Funds Effective Rate for the
last day on which such rate was announced. The Agent shall
promptly notify the Company and each Bank of each change in
the Base Rate and the effective date thereof, but any failure
of the Agent to so notify shall not relieve the Borrowers of
their obligations hereunder or under the Notes.
(ii) Euro-Rate Option: A rate per annum (based on a
year of 360 days and actual days elapsed) for each day equal
to the Euro-Rate for such day plus the Applicable Margin.
"Euro-Rate" for any day, as used herein, shall mean for each
Set of Euro-Rate Loans corresponding to a proposed or
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existing Euro-Rate Interest Period the rate of interest
(which shall be the same for each day in such Euro-Rate
Interest Period) determined in good faith by the Agent (which
determination shall be conclusive) to be the rate per annum
for deposits in Dollars offered to the Agent in the London
interbank market at approximately 11:00 o'clock a.m., London
time, two London Business Days prior to the first day of such
Euro-Rate Interest Period for delivery on the first day of
such Euro-Rate Interest Period in amounts comparable to the
amount of such Set of Euro-Rate Loans and for a period
comparable to such Euro-Rate Interest Period. The Agent
shall give prompt notice to the Company and the Banks by
telephone, telecopier or facsimile of the Euro-Rate so
offered or adjusted from time to time and the Agent's
determination thereof shall be conclusive in the absence of
manifest error.
Without limiting the effect of Sections 4.02(c) and 2.07(d)
hereof, a Borrower may not select the Euro-Rate Option during the
continuance of any Event of Default.
(b) Interest Periods. At any time when a Borrower
shall request the Banks to make a Set of Loans, such Borrower
shall specify the term of such Loans (the "Interest Period" of
such Set of Loans) within the limitations set forth in the chart
below:
Type of Loan Available Interest Periods
Base Rate Loan Any number of days not exceeding the
number of days remaining until the
Expiration Date ("Base Rate Interest
Period")
Euro-Rate Loan One, two, three or six months ("Euro-Rate
Interest Period")
provided, that:
(i) Each Base Rate Interest Period beginning before the
Expiration Date, which would otherwise end after the
Expiration Date, shall instead end on the Expiration Date;
(ii) Each Base Rate Interest Period which would
otherwise end on a day which is not a Business Day shall be
extended to the next succeeding Business Day unless such
Business Day is after the Expiration Date in which event such
Base Rate Interest Period shall end on the immediately
preceding Business Day;
(iii) Each Euro-Rate Interest Period shall begin on a
London Business Day, and the duration of each Euro-Rate
Interest Period shall be determined in accordance with the
definition of the term "month" herein;
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(iv) Notwithstanding any other provision of this
Agreement, a Borrower may not fix an Interest Period which
would end after the Expiration Date;
The principal amount of each Loan shall be due and
payable on the last day of the Interest Period corresponding
thereto (the "Maturity Date" therefor). Subject to Section 2.02
hereof, the principal amount of all Loans, together with accrued
and unpaid interest thereon, shall be due and payable on the
Expiration Date.
(c) Transactional Amounts. Every request for a Set of
Loans and every prepayment of a Set of Loans shall be in a
principal amount such that after giving effect thereto the
principal amount of such Set of Loans shall be as set forth in the
table below:
Type of Loan Allowable Principal Amounts
Base Rate Loan $10,000,000 plus an integral multiple of
$1,000,000
Euro-Rate Loan $10,000,000 plus an integral multiple of
$1,000,000
(d) Interest After Maturity. After the principal
amount of any Loan shall have become due (on a Maturity Date, the
Expiration Date, by acceleration or otherwise), such Loan shall
bear interest for each day until paid (before and after judgment)
at a rate per annum (based on a year of 365 or 366 days, as the
case may be) which shall be 2% above the then current Base Rate,
such interest rate to change automatically from time to time
effective as of the effective date of each change in such Base
Rate.
(e) Euro-Rate Unascertainable; Impracticability. If
(i) on any date on which a Euro-Rate would otherwise be
set the Agent (in the case of A or B below) or any Bank (in
the case of C below) shall have in good faith determined
(which determination shall be conclusive) that:
(A) adequate and reasonable means do not exist for
ascertaining such Euro-Rate,
(B) a contingency has occurred which materially and
adversely affects the London interbank market, or
(C) the effective cost to such Bank of funding a
proposed Euro-Rate Loan from a Corresponding Source of
Funds shall exceed the Euro-Rate applicable to such
Loan, or
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(ii) at any time any Bank shall have determined in good
faith (which determination shall be conclusive) that the
making, maintenance or funding of any Euro-Rate Loan has been
made impracticable or unlawful by compliance by such Bank or
a Notional Euro-Rate Funding Office of such Bank in good
faith with any Law or guideline or interpretation or
administration thereof by an Official Body charged with the
interpretation or administration thereof or with any request
or directive of any such Official Body (whether or not having
the force of law);
then, and in any such event, such Bank, if other than the Agent,
may notify the Agent and the Agent shall notify the Company of
such determination. Upon such date as shall be specified in such
notice (which shall not be earlier than the date such notice is
given to the Company) the obligation of the Banks to allow the
Borrowers to select the Euro-Rate Option shall be suspended until
the Agent shall have later notified the Company of the Agent's or
such Bank's determination, as the case may be, (which
determination shall be conclusive) that the circumstances giving
rise to such previous determination no longer exist.
If a Bank notifies the Agent of a determination under
subsection (ii) of this Section 2.07(e), all Euro-Rate Loans of
such Bank (the "Affected Bank") then outstanding shall
automatically be converted to the Base Rate Option as of the date
specified in such notice, and accrued interest thereon shall be
due and payable on such date.
If at the time the Agent or a Bank makes a determination
under this Section 2.07(e) a Borrower has previously notified the
Agent that it wishes the Banks to make a Set of Euro-Rate Loans
but such Loans have not yet been made, such notification shall be
deemed to request the making of Base Rate Loans instead of Euro-
Rate Loans with respect to such Set of Loans or, in the case of a
determination under Section 2.07(e)(i)(C) or 2.07(e)(ii), the Loan
of the Affected Bank.
2.08. Prepayments. Each Borrower shall have the right
at its option from time to time to prepay any Set of Loans in
whole or in part upon at least: (i) one Business Day's prior
written notice to the Agent in the case of any Set of Base Rate
Loans; and (ii) subject to the provisions of Section 2.11(b)
hereof, three Business Days' prior written notice to the Agent in
the case of any Set of Euro-Rate Loans. Whenever a Borrower
desires to prepay any part of any Set of Loans, it shall provide
the foregoing notice, which shall be irrevocable, to the Agent
setting forth the following information:
(a) The date, which shall be a Business Day, on which
the proposed prepayment is to be made;
-26-<PAGE>
(b) The Maturity Date, principal amount of, and
Interest Rate Option applicable to, the Set of Loans to be
prepaid; and
(c) The principal amount selected in accordance with
Section 2.07(c) hereof to be prepaid.
Such notice must be provided no later than 12:00 noon on the last
day permitted for such notice. Upon receiving the foregoing
notice, the Agent shall promptly advise each Bank of the
information set forth therein and on the date specified in such
notice the principal amount of the Set of Loans specified in such
notice, together with interest on such principal amount to such
date, shall be due and payable.
2.09. Interest Payment Dates. Interest on each Set of
Base Rate Loans shall be due and payable on the Maturity Date
thereof and on each March 31, June 30, September 30 and December
31 during the applicable Interest Period. Interest on each Set of
Euro-Rate Loans shall be due and payable on the Maturity Date
thereof and, if the corresponding Euro-Rate Interest Period is
longer than three months, also every third month during such
Interest Period or, in the case of any prepayment, on the date
specified for such prepayment pursuant to Section 2.08(a) hereof
or specified for a required prepayment of Euro-Rate Loans in a
notice to be provided pursuant to Section 2.07(e) hereof. After
maturity of any Set of Loans (on a Maturity Date, Expiration Date,
by acceleration or otherwise), interest on such Loans shall be due
and payable on demand.
2.10. Pro Rata Treatment; Payments Generally.
(a) Pro Rata Treatment. Each Set of Loans hereunder
shall be made, and all payments made in respect of principal,
interest, Facility Fees and Utilization Fees due from the
Borrowers hereunder or under the Notes shall be applied, Pro Rata
from and to each Bank, except for payments of interest involving
an Affected Bank as provided in Section 2.07(e) hereof and
payments to a Bank subject to a withholding deduction under
Section 2.12(c) hereof.
(b) Payments Generally. All payments and prepayments
to be made by the Borrowers in respect of principal, interest,
fees, indemnity, expenses or other amounts due from the Borrowers
hereunder or under any Loan Document shall be payable in Dollars
at 12:00 o'clock noon, Pittsburgh time, on the day when due
without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived, and an action therefor shall
immediately accrue, without setoff, counterclaim, withholding or
other deduction of any kind or nature, except for payments to a
Bank subject to a withholding deduction under Section 2.12(c)
hereof and except that the principal amount of any Loans then due
by a Borrower to the Banks shall automatically be set off against
the principal amount of any Loans then due from the Banks to such
-27-<PAGE>
Borrower hereunder as provided in Section 2.04. Except for
payments expressly provided herein to be made directly to a Bank,
such payments shall be made to the Agent at its Office in Dollars
in funds immediately available at such Office, and payments
expressly provided herein to be made directly to a Bank shall be
made to the applicable Bank at such domestic account as it shall
specify to the Company from time to time in Dollars in funds
immediately available at such account. Any payment or prepayment
received by the Agent or such Bank after 12:00 o'clock Noon,
Pittsburgh time, on any day shall be deemed to have been received
on the next succeeding Business Day. The Agent shall distribute
to the Banks all such payments received by it from the Borrowers
as promptly as practicable after receipt by the Agent.
(c) Interest on Overdue Amounts. To the extent
permitted by Law, after there shall have become due (on a Maturity
Date, Expiration Date, by acceleration or otherwise) interest,
fees, indemnity, expenses or any other amounts due from the
Borrowers hereunder or under any other Loan Document (excluding
overdue principal, which shall bear interest as described in
Section 2.07(d) hereof, but including interest payable under this
Section 2.10), such amounts shall bear interest for each day until
paid (before and after judgment), payable on demand, at a rate per
annum (based on a year of 365 or 366 days, as the case may be) 2%
above the then current Base Rate, such interest rate to change
automatically from time to time effective as of the effective date
of each change in the Base Rate.
2.11. Additional Compensation in Certain Circumstances.
(a) Increased Costs or Reduced Return Resulting From
Taxes, Reserves, Capital Adequacy Requirements, Expenses, etc. If
any Law or guideline or interpretation or application thereof by
any Official Body charged with the interpretation or
administration thereof or compliance with any request or directive
of any Official Body (whether or not having the force of law) now
existing or hereafter adopted:
(i) subjects any Bank or any Notional Euro-Rate Funding
Office of such Bank to any tax not applicable on the date
hereof or changes the basis of taxation with respect to this
Agreement, the Notes held by such Bank, the Loans or payments
by the Borrowers of principal, interest, Facility Fee,
Utilization Fee or other amounts due from the Borrowers
hereunder or under the Notes (except for taxes on the overall
net income of such Bank or such Notional Euro-Rate Funding
Office imposed by the jurisdiction in which the Bank's
principal office or Notional Euro-Rate Funding Office is
located),
(ii) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against assets held
by, credit extended by, deposits with or for the account of,
or other acquisition of funds by, any Bank or any Notional
-28-<PAGE>
Euro-Rate Funding Office of such Bank (other than
requirements included in Section 2.11(c) below),
(iii) imposes, modifies or deems applicable any capital
adequacy or similar requirement (A) against Assets (funded or
contingent) of, or credit or commitments to extend credit by,
any Bank or any Notional Euro-Rate Funding Office, or
(B) otherwise applicable to the obligations of any Bank or
Notional Euro-Rate Funding Office under this Agreement, or
(iv) imposes upon any Bank or any Notional Euro-Rate
Funding Office of such Bank any other condition or expense
with respect to this Agreement, the Notes held by such Bank
or its making, maintenance or funding of any Loans;
and the result of any of the foregoing is to increase the cost to,
reduce the income receivable by, or impose any expense (including
loss of margin) upon such Bank, any Notional Euro-Rate Funding
Office of such Bank or, in the case of clause (iii) hereof, any
Person controlling such Bank, with respect to this Agreement, the
Notes held by such Bank or the making, maintenance or funding of
any part of any Loan (or, in the case of any capital adequacy or
similar requirement, to have the effect of reducing the return on
such Bank's or controlling Person's capital, taking into account
such Bank's or controlling Person's policies with respect to
capital adequacy) by an amount which such Bank deems to be
material (such Bank being deemed for this purpose to have made,
maintained or funded each Euro-Rate Loan from a Corresponding
Source of Funds), such Bank shall from time to time notify the
Agent and the Agent shall notify the Company of the amount
determined (using any averaging and attribution methods) by such
Bank to be necessary to compensate such Bank, such Notional Euro-
Rate Funding Office or such controlling Person (on an after-tax
basis) for such increase in cost, reduction in income or
additional expense, such notice to include such Bank's
calculation, in reasonable detail, as to the amount of its claim
and such determination to be conclusive absent manifest error.
Such amount shall be due and payable by the Company to such Bank
ten Business Days after such notice is given. If the Company is
required to make a payment to a Bank under this Section 2.11(a),
the Company may at the time of such payment notify such Bank that
the Company has elected to treat it as a "Non-Extending Bank" in
which case the provisions of Section 2.02(b) shall apply except
that in applying the provisions of Section 2.02(b) for purposes of
this Section 2.11(a), (i) the term "Expiration Date" as used
therein shall mean the date specified in the notice given pursuant
to this sentence as the date when such Bank's Commitment shall be
reduced to zero, which date shall not be earlier than the latest
Maturity Date applicable to Loans of such Bank then outstanding
and (ii) the Expiration Date with respect to any Replacement Bank
shall be the Expiration Date applicable to Loans other than Loans
of the Bank being replaced.
-29-<PAGE>
(b) Indemnity. In addition to the compensation
required by subsection (a) of this Section 2.11, each of the
respective Borrowers shall indemnify each Bank against any loss or
reasonable expense (including loss of margin but excluding any
other consequential or incidental damages) which such Bank has
sustained or incurred as a consequence of any
(i) payment or prepayment of any part of any Euro-Rate
Loan of such Borrower on a day other than the last day of the
corresponding Interest Period (whether or not such payment or
prepayment is mandatory and whether or not such payment or
prepayment is then due),
(ii) attempt by such Borrower to revoke (expressly, by
later inconsistent notices or otherwise) in whole or part any
notice stated herein to be irrevocable (the Banks having in
their discretion the options (A) to give effect to any such
attempted revocation and obtain indemnity under this Section
2.11(b) or (B) to treat such attempted revocation as having
no force or effect, as if never made), or
(iii) default by such Borrower in the performance or
observance of any covenant or condition contained in this
Agreement or the Notes, including without limitation any
failure of such Borrower to pay when due (on a Maturity Date,
Expiration Date, by acceleration or otherwise) any principal,
interest, Facility Fee, Utilization Fee or any other amount
due hereunder or under any Note.
If a Bank sustains or incurs any such loss or expense it shall,
without unreasonable delay, notify the Agent and the Agent shall,
as soon as practicable, notify the Company of the amount
determined in good faith by such Bank to be necessary to indemnify
the Bank for such loss or expense (the Bank being deemed for this
purpose to have made, maintained or funded each Euro-Rate Loan
from a Corresponding Source of Funds), such notice to include the
Bank's calculation in reasonable detail, as to the amount of its
claim and such determination to be conclusive absent manifest
error. Such amount shall be due and payable by the applicable
Borrower to such Bank ten Business Days after such notice is
given.
(c) Euro-Rate Reserves. Without limiting the effect of
Section 2.11(a) hereof, for every day for which a Bank's Euro-Rate
Reserve Percentage is greater than zero, the applicable Borrower
shall pay to such Bank an additional amount for each Euro-Rate
Loan of such Bank (rounded upward if necessary to the nearest
cent) equal to: (i) 1/360 times (ii) the Euro-Rate applicable to
such Loan times (iii) the principal amount of such Loan times
(iv) a number (rounded upward if necessary to the nearest 1/100 of
1%) equal to (A) a number equal to 1.00 divided by (a) 1.00 minus
(b) the Euro-Rate Reserve Percentage minus (B) 1.00.
-30-<PAGE>
The amount payable pursuant to this 2.11(c) may also be
expressed by the following formula:
[Daily amount payable ] [Euro-Rate applicable]
[with respect to such ] = [1/360] X [to such Loan ]
[Bank's Euro-Rate Loan]
[Principal amount ] [ 1.00 ]
X [of such Loan ] X [1.00 - [Euro-Rate Reserve] - 1.00]
[ [Percentage ] ]
The "Euro-Rate Reserve Percentage" of a Bank for any day
is the maximum effective percentage (expressed as a decimal
fraction, rounded upward to the nearest 1/100 of 1%), as
determined in good faith by such Bank (which determination shall
be conclusive), which actually would be applicable to such Bank
for such day as prescribed by the Federal Reserve Board (or any
successor) for reserve requirements (including, without
limitation, supplemental, marginal and emergency reserve
requirements) with respect to any eurocurrency funding (currently
referred to as "Eurocurrency Liabilities") by such Bank on such
day.
Each Bank shall from time to time notify the Agent and
the Agent shall, as soon as practicable, notify the Company of the
amounts determined in good faith by such Bank (which determination
shall be conclusive) to be payable to it by each Borrower pursuant
to this Section 2.11(c). Such amounts shall be due and payable by
the applicable Borrower to such Bank ten Business Days after such
notice is given.
2.12. Taxes.
(a) Payments Net of Taxes. All payments made by the
Borrowers under this Agreement shall be made free and clear of,
and without reduction 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
Official Body, and all liabilities with respect thereto, excluding
(i) in the case of the Agent and each Bank, income or
franchise taxes imposed on the Agent or such Bank by the
jurisdiction under the laws of which the Agent or such Bank
is organized or any political subdivision or taxing authority
thereof or therein or as a result of a connection between
such Bank and any jurisdiction other than a connection
resulting solely from this Agreement and the transactions
contemplated hereby, and
(ii) in the case of each Bank, income or franchise
taxes imposed by any jurisdiction in which such Bank's
lending offices which made or book Loans are located or any
political subdivision or taxing authority thereof or therein
-31-<PAGE>
(all such non-excluded taxes, levies, imposts, deductions, charges
or withholdings being hereinafter called "Taxes"). If any Taxes
are required to be withheld or deducted from any amounts payable
by a Borrower to the Agent or any Bank under this Agreement, such
Borrower shall pay the relevant amount of such Taxes, and the
amounts so payable to the Agent or such Bank shall be increased to
the extent necessary to yield to the Agent or such Bank (after
payment of all Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this
Agreement. Whenever any Taxes are paid by a Borrower with respect
to payments made in connection with this Agreement, as promptly as
possible thereafter, the Borrower shall send to the Agent for its
own account or for the account of such Bank, as the case may be, a
certified copy of an original official receipt received by the
Borrower showing payment thereof.
(b) Indemnity. Each Borrower hereby indemnifies the
Agent and each of the Banks for the full amount of all Taxes
attributable to payments by or on behalf of such Borrower
hereunder, any Taxes paid by the Agent or such Bank, as the case
may be, any present or future claims, liabilities or losses with
respect to or resulting from any omission to pay or delay in
paying any Taxes (including any incremental Taxes, interest or
penalties that may become payable by the Agent or such Bank as a
result of any failure to pay such Taxes), whether or not such
Taxes were correctly or legally asserted. Such indemnification
shall be made within 30 days from the date such Bank or the Agent,
as the case may be, makes written demand therefor.
(c) Withholding and Backup Withholding. Each Bank that
is incorporated or organized under the laws of any jurisdiction
other than the United States or any State thereof agrees that, on
or prior to the date any payment is due to be made to it hereunder
or under any other Loan Document, it will furnish to the Company
and the Agent
(i) two valid, duly completed copies of United States
Internal Revenue Service Form 4224 or United States Internal
Revenue Form 1001 or successor applicable form, as the case
may be, certifying in each case that such Bank is entitled to
receive payments under this Agreement without deduction or
withholding of any United States federal income taxes and
(ii) if applicable, a valid, duly completed Internal
Revenue Service Form W-8 or W-9 or successor applicable form,
as the case may be, to establish an exemption from United
States backup withholding tax.
Each Bank which so delivers to the Company and the Agent a Form
1001 or 4224 and Form W-8 or W-9, or successor applicable forms,
agrees to deliver to the Company and the Agent two further copies
of the said Form 1001 or 4224 and, if applicable, Form W-8 or W-9,
or successor applicable forms, or other manner of certification,
as the case may be, on or before the date that any such form
-32-<PAGE>
expires or becomes obsolete or otherwise is required to be
resubmitted as a condition to obtaining an exemption from
withholding tax, or after the occurrence of any event requiring a
change in the most recent form previously delivered by it, and
such extensions or renewals thereof as may reasonably be requested
by the Company and the Agent, certifying in the case of a Form
1001 or Form 4224 that such Bank is entitled to receive payments
under this Agreement or any other Loan Document without deduction
or withholding of any United States federal income taxes, unless
in any such cases an event (including any changes in Law) 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 Bank from duly completing and delivering
any such letter or form with respect to it, and such Bank advises
the Company and the Agent that it is not capable of receiving
payments without any deduction or withholding of United States
federal income tax, and in the case of a Form W-8 or W-9,
establishing an exemption from United States backup withholding
tax.
2.13. Funding by Branch, Subsidiary or Affiliate.
(a) Notional Funding. Each Bank shall have the right
from time to time, prospectively or retrospectively, without
notice to the Borrowers, to deem any branch, Subsidiary or
Affiliate of such Bank to have made, maintained or funded any of
such Bank's Euro-Rate Loans at any time. Any branch, Subsidiary
or Affiliate so deemed shall be known as a "Notional Euro-Rate
Funding Office". A Bank shall deem any of its Euro-Rate Loans or
the funding therefor to have been transferred to a different
Notional Euro-Rate Funding Office if such transfer would avoid or
cure an event or condition described in Section 2.07(e) hereof or
would lessen compensation payable by the Company under Section
2.11(a) hereof, and if the Bank determines in its sole discretion
that such transfer would be practicable, would not have a material
adverse effect on such Loans and would not be inconsistent with
such Bank's internal policies, the Bank or any Notional Euro-Rate
Funding Office (it being assumed for purposes of such
determination that each such Euro-Rate Loan is actually made or
maintained by or funded through the corresponding Notional Euro-
Rate Funding Office). Notional Euro-Rate Funding Offices may be
selected by a Bank without regard to the Bank's actual methods of
making, maintaining or funding Loans or any sources of funding
actually used by or available to the Bank.
(b) Actual Funding. Each Bank shall have the right
from time to time to make or maintain any Euro-Rate Loan by
arranging for a branch, Subsidiary or Affiliate of such Bank to
make or maintain such Loan. Each Bank shall have the right to
(i) hold any applicable Note payable to its order for the benefit
and account of such branch, Subsidiary or Affiliate or
(ii) request the applicable Borrower to issue one or more
promissory notes in the principal amount of such Euro-Rate Loan in
substantially the form attached hereto as Exhibit A or Exhibit B,
-33-<PAGE>
as the case may be, with the blanks appropriately filled, payable
to such branch, Subsidiary or Affiliate and with appropriate
changes reflecting that the holder thereof is not obligated to
make any additional Loans to the Borrowers. The Borrowers agree
to comply promptly with any request under subsection (ii) of this
Section 2.13(b). If such Bank causes a branch, Subsidiary or
Affiliate to make or maintain any Loan hereunder, all terms and
conditions of this Agreement shall, except where the context
clearly requires otherwise, be applicable to such Loan and to any
Note payable to the order of such branch, Subsidiary or Affiliate
to the same extent as if such Loan were made or maintained by the
Bank and such note were a Note payable to the Bank's order.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Company hereby represents and warrants to the Agent
and each Bank as follows:
3.01. Organization and Qualification. The Company is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Company is duly
qualified to do business as a foreign corporation and is in good
standing in all jurisdictions in which its ownership of property
or the nature of its business activities or both makes such
qualification necessary or advisable and where failure to so
qualify could have a material adverse effect upon the business,
operations or condition (financial or otherwise) of the Company.
ANB is a national banking association duly organized, validly
existing and in good standing under the laws of the United States.
3.02. Corporate Power and Authorization. Each Borrower
has corporate power and authority to make and carry out this
Agreement, to make the borrowings provided for herein, to take all
action contemplated hereby or required hereunder, to execute and
deliver this Agreement, its Notes and the other Loan Documents to
be executed and delivered by it and to perform its obligations
hereunder and thereunder; and all such action has been duly
authorized by all necessary corporate proceedings on its part.
3.03. Audited Annual Financial Statements. The Company
has heretofore furnished to the Agent and each Bank consolidated
balance sheets of the Company and its Consolidated Subsidiaries as
of December 31, 1994 and 1993 and the related consolidated
statements of income, cash flows and changes in stockholders'
equity for the three years ended December 31, 1994, as examined
and reported on by Arthur Andersen LLP, independent public
accountants for the Company, who delivered an unqualified opinion
in respect thereof. Such financial statements (including the
notes thereto) present fairly the financial condition of the
Company and its Consolidated Subsidiaries as of such dates and the
-34-<PAGE>
results of their operations and their cash flows for such years,
all in conformity with GAAP.
3.04. Consolidating Financial Statements. The Company
has heretofore furnished to the Agent and each Bank consolidating
balance sheets of the Company and its Consolidated Subsidiaries as
of December 31, 1994, together with the related consolidating
statements of income for the year then ended. Such financial
statements (including the notes thereto) present fairly the
financial condition of the Company and its Consolidated
Subsidiaries as of such date and the results of their operations
for the year then ended, all in conformity with GAAP, except that
such financial statements do not contain all of the footnote
disclosures required by GAAP.
3.05. Bank Financial Statements. The Company has
heretofore furnished to the Agent and each Bank true and correct
copies of the Call Reports prepared on behalf of and pertaining to
each Insured Subsidiary for the year ended December 31, 1994.
Such Call Reports present fairly the financial condition of such
Insured Subsidiaries as of the end of such year and the results of
their operations, their capital positions and their cash flows for
the year then ended, all in conformity with RAP.
3.06. Absence of Material Adverse Changes. Except as
otherwise disclosed in Schedule 3.06 hereof, since December 31,
1994 and as of the Closing Date, there has been no material
adverse change in the business, performance, operations, or
condition (financial or otherwise) of the Company and its Material
Subsidiaries, either individually or taken as a whole.
3.07. Litigation and Regulatory Proceedings. Except as
set forth in the Company's Annual Report on Form 10-K for the year
ended December 31, 1994, copies of which have been provided to the
Agent and the Banks, (a) there is no litigation, arbitration or
governmental proceeding or investigation by or against the Company
or any Subsidiary of the Company pending or, to the knowledge of
the Company, after due inquiry, threatened, which in the
reasonable judgment of the Company, and if determined adversely,
either individually or in the aggregate is likely to have any
material adverse effect on the financial condition or business of
the Company or any Material Subsidiary, and (b) neither the
Company nor any Material Subsidiary is subject to any order,
directive or supervisory letter of, or agreement, memorandum of
understanding or similar arrangement (including board resolutions
adopted at the request of a regulatory authority) with, any
regulatory authority (including, without limitation, any Primary
Federal Regulator, the Federal Reserve Board or the FDIC or any
state banking or insurance department or regulatory agency)
restricting its operations, restricting it from taking any action
or requiring that certain actions be taken, and the Company has no
knowledge that any such action is threatened or contemplated by
any regulatory authority.
-35-<PAGE>
3.08. No Conflicting Laws or Agreements; Consents and
Approvals.
(a) Neither the execution and delivery of any Loan
Document, the consummation of the transactions herein contemplated
nor compliance with the terms and provisions hereof, of the Notes
or of any other Loan Document will violate, conflict with or
result in a breach of any of the terms, conditions or provisions
of the articles of incorporation, by-laws or other constituent
documents of the Company or of any of its Subsidiaries or of any
Law or of any material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound or to which any of
them or their material properties is subject, or constitute a
default thereunder or result in the creation or imposition of any
Lien of any nature whatsoever upon any of the Assets or property
of the Company or any of its Subsidiaries pursuant to the terms of
any such agreement or instrument.
(b) No authorization, consent, approval, license,
exemption or other action by, and no registration, qualification,
designation, declaration or filing with, any Official Body
(collectively, "Governmental Action") is or will be necessary or
advisable in connection with execution and delivery of this
Agreement, the Notes or any other Loan Document, consummation of
the transactions herein or therein contemplated, or the
performance of or compliance with the terms and conditions hereof
or thereof.
3.09. Execution and Binding Effect. This Agreement has
been duly and validly executed and delivered by the Company and
ANB. This Agreement constitutes as to each Borrower, and the
Notes and other Loan Documents when duly executed and delivered by
a Borrower pursuant to the provisions hereof will constitute as to
such Borrower, legal, valid and binding obligations, enforceable
in accordance with the terms thereof except, as to the enforcement
of remedies, for limitations imposed by bankruptcy, receivership,
insolvency, reorganization, moratorium or other similar Laws
affecting the enforcement of creditors' rights generally or by
Laws limiting the right of specific performance.
3.10. Employee Benefits. A copy of the most recent (as
of the date hereof) Annual Report (5500 Series Form) including all
attachments thereto as filed with the Internal Revenue Service for
each Plan has been provided to Agent and each Bank and fairly
presents the funding status (as of the date hereof) of each Plan.
There has been no material deterioration in any such Plan's
funding status since the date of such Annual Report. Schedule
3.10 sets forth as of the date hereof a list of all Plans and
Multiemployer Plans, and all information available to the Borrower
with respect to the direct, indirect or potential withdrawal
liability to any Multiemployer Plan of either Borrower or any
Controlled Group Member. Except as set forth in Schedule 3.10,
neither the Company nor any of its Subsidiaries has any liability
-36-<PAGE>
(contingent or otherwise) for or in connection with, and none of
their respective properties is subject to a Lien in connection
with, any Pension-Related Event. As of the date hereof, the
aggregate amount of Postretirement Benefit Obligations, as
certified by an actuary, does not exceed the amount set forth in
Schedule 3.10. The PBGC premiums and contributions required to
meet the minimum funding requirements of ERISA and the Code for
all Plans have not exceeded $10,000,000 on an annual basis for any
of the past three years. The amount of unfunded benefit
liabilities (as defined in Section 4001(a)(16) of ERISA) for all
Plans, as certified by the Plans' actuaries, do not exceed
$10,000,000.
3.11. Taxes. All tax and information returns required
to be filed by the Company or any Subsidiary of the Company have
been properly prepared, executed and filed. All taxes,
assessments, fees and other governmental charges upon the Company
and its Subsidiaries or upon their respective properties, incomes,
sales, deposits or franchises which are due and payable have been
paid. The reserves and provisions for taxes on the books of the
Company and its Subsidiaries are adequate for all open years and
for their current fiscal periods.
3.12. Regulation U. No part of the proceeds of any
Loan hereunder will be used for the purpose of buying or carrying
any "margin stock," as such term is used in Regulation U of the
Federal Reserve Board, or to extend credit to others for the
purpose of buying or carrying any "margin stock." Neither the
making of any Loan nor any use of proceeds of such Loan will
violate or conflict with the provisions of Regulation G, T, U or X
of the Federal Reserve Board.
3.13. Environmental Matters. (a) The Company, each of
its Material Subsidiaries and each of their respective
Environmental Affiliates is and has been in full compliance with
all applicable Environmental Laws, except for matters which,
individually or in the aggregate, are not likely to have a
material adverse effect on the Company, any of its Material
Subsidiaries or their respective business, operations or
conditions, financial or otherwise. There are no circumstances
that may prevent or interfere with such full compliance in the
future.
(b) To the best of the knowledge of all Responsible
Officers of the Company, the Company, each of its Material
Subsidiaries and each of their respective Environmental Affiliates
have all Environmental Approvals necessary or desirable for the
ownership and operation of their respective properties, facilities
and businesses as presently owned and operated and as presently
proposed to be owned and operated, except for matters which,
individually or in the aggregate, are not likely to have a
material adverse effect on the Company, its Material Subsidiaries
or their respective business, operations or conditions, financial
or otherwise.
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(c) To the best of the knowledge of all Responsible
Officers of the Company, there is no Environmental Claim pending
or threatened, and there are no past or present acts, omissions,
events or circumstances that could form the basis of any
Environmental Claim against the Company, any of its Material
Subsidiaries or any of their respective Environmental Affiliates,
except for matters which, if adversely decided, individually or in
the aggregate, are not likely to have a material adverse effect on
the Company, its Material Subsidiaries or their respective
business, operations or conditions, financial or otherwise.
(d) To the best of the knowledge of all Responsible
Officers of the Company and except as disclosed in Schedule
3.13(d) hereof, no facility or property now or previously owned,
operated or leased by the Company, any of its Material
Subsidiaries or any of their respective Environmental Affiliates
is an Environmental Cleanup Site, and neither the Company, any of
its Material Subsidiaries nor any of their respective
Environmental Affiliates has stored, treated, transported,
handled, disposed of, or arranged for the disposal of any
Environmental Concern Materials at, on, under, above, or adjacent
to any Environmental Cleanup Site. No Lien (including without
limitation any cost-reimbursement claim of any Official Body)
exists, and no condition exists which is likely to result in the
filing of a Lien, against any property of the Company, any of its
Material Subsidiaries, or any of their respective Environmental
Affiliates, under any Environmental Law.
(e) To the best of the knowledge of all Responsible
Officers of the Company, there are no facts, circumstances or
conditions that reasonably could be expected to restrict or
encumber under any Environmental Law the ownership, occupancy, use
or transferability of facilities or properties now or previously
owned, operated or leased by the Company, any of its Material
Subsidiaries, or any of their respective Environmental Affiliates.
3.14. Investment Company; Bank Holding Company; Public
Utility Holding Company. Neither Borrower: (a) is or is
controlled by an investment company within the meaning of the
Investment Company Act of 1940, as amended; (b) is a registered
bank holding company under the Bank Holding Company Act of 1956,
as amended; or (c) is a "holding company" or an "affiliate" of a
"holding company" or a "subsidiary company" of a "holding company"
within the meaning of the Public Utility Holding Company Act of
1935, as amended.
3.15. Capitalization of Insured Subsidiaries. As of
the Closing Date, each Insured Subsidiary is "Well Capitalized" as
defined under and determined pursuant to the regulations of its
Primary Federal Regulator.
3.16. Absence of Undisclosed Liabilities. Neither the
Company nor any Subsidiary of the Company has any liability or
obligation of any nature whatever (whether absolute, accrued,
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contingent or otherwise, whether or not due), forward or long-term
commitments or unrealized or anticipated losses from unfavorable
commitments, except (a) as disclosed in the financial statements
referred to in Sections 3.03, 3.04 and 3.05 hereof, (b) matters
that, individually or in the aggregate, could not have a material
adverse effect on the Company, any of its Material Subsidiaries or
their respective business, operations or conditions, financial or
otherwise, (c) liabilities, obligations, commitments and losses
incurred after December 31, 1994 in the ordinary course of
business and consistent with past practices; and (d) matters
disclosed on Schedule 3.16 hereof.
3.17. Absence of Events of Default. No event has
occurred and is continuing and no condition exists which
constitutes an Event of Default or a Potential Default.
3.18. Title to Property. The Company and each
Subsidiary of the Company has good and marketable title in fee
simple to all real property owned or purported to be owned by it
and good title to all other property of whatever nature owned or
purported to be owned by it, including but not limited to all
property reflected in the most recent audited balance sheet
referred to in Section 3.03 hereof or submitted pursuant to
Section 5.01(a) hereof, as the case may be, except as sold or
otherwise disposed of in the ordinary course of business after the
date of such balance sheet or, after the Closing Date, as
otherwise permitted hereunder, in each case free and clear of all
Liens, other than Permitted Liens.
3.19. Subsidiaries and Other Investments. Annexed
hereto as Schedule 3.19 is a correct and complete list, as of the
Closing Date, of all Subsidiaries of the Company, showing as to
each such Subsidiary, its name, the jurisdiction of its
incorporation (or formation, if other than a corporation), its
primary business activity, capitalization, the ownership of the
capital stock of such Subsidiary and whether, as of the Closing
Date, such Subsidiary is an Active Subsidiary and/or a Material
Subsidiary. The Company directly or indirectly owns the issued
and outstanding capital stock of every class and series of the
corporations, and equity interests in the joint ventures,
partnerships and other entities, set forth in Schedule 3.19 (other
than directors' qualifying shares) and directly or indirectly owns
none of the capital stock of any other corporation, association,
trust or other entity, and no interest share in the equity of any
partnership, joint venture, or other entity or enterprise except
as disclosed in Schedule 3.19 and except for investments by the
Company in the ordinary course of business and which individually
or in the aggregate are not material. Each of said Subsidiaries
and other entities has been duly organized or established and is
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, organization or establishment,
as shown in Schedule 3.19, possesses corporate or other powers
adequate to transact the business in which it is engaged, and is
engaged primarily in the business attributed to it in Schedule
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3.19. All of the outstanding shares of stock directly or
indirectly owned by the Company in each corporation listed in
Schedule 3.19 are duly authorized, validly issued, fully paid and
nonassessable (subject, in the case of the shares of ANB and CNB,
to the provisions of Section 55, Title 12, United States Code).
Each such Subsidiary is duly qualified and in good standing in all
jurisdictions in which the nature of its business or the character
of the property owned by it makes such qualification necessary
except where a failure to so qualify would not have a material
adverse effect upon its business, operations or condition,
financial or otherwise, and the Company and each such Subsidiary
is duly authorized, qualified and licensed under all laws,
regulations, ordinances or orders of public authorities to carry
on its business in the places and in the manner presently
conducted.
3.20. Compliance with Laws. The Company and its
Subsidiaries are in compliance with all Laws applicable to them
and their respective businesses except for noncompliances which,
individually or in the aggregate, would not have a material
adverse effect on the business, operations or condition (financial
or otherwise) of the Company or upon the ability of the Borrowers
to perform their obligations under the Loan Documents.
3.21. Accurate and Complete Disclosure. The Company
has disclosed to the Banks in writing every fact which materially
and adversely affects, or which so far as the Company can
reasonably foresee would materially and adversely affect (whether
by virtue of such fact's impact upon the business, operations,
performance or condition, financial or otherwise, of the Company,
ANB or any Material Subsidiary or otherwise) the ability of the
Company and ANB to perform their respective obligations under this
Agreement, the Notes and any other Loan Document.
ARTICLE IV
CONDITIONS OF LENDING
4.01. Closing Date. The obligation of each Bank to
make Loans hereunder is subject to the satisfaction as of the
Closing Date of the following conditions precedent in addition to
the satisfaction as of the date of such Loans of the conditions
set forth in Section 4.02 hereof:
(a) Agreement; Notes. The Agent shall have received an
executed counterpart of this Agreement for each Bank, duly
executed by the Borrowers, and executed Notes payable to each
Bank, conforming to the requirements hereof, duly executed on
behalf of each of the Borrowers.
(b) Guaranty Agreement. The Agent shall have received
an executed counterpart for each Bank of a Guaranty and
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Suretyship Agreement in substantially the form attached
hereto as Exhibit D, duly executed by the Company.
(c) Corporate Proceedings. The Agent shall have
received, with a counterpart for each Bank, certificates by
the Secretary or Assistant Secretary of the Company, ANB and
each other Material Subsidiary dated as of the Closing Date
as to (i) true copies of the articles of incorporation and
by-laws (or other constituent documents) of such Person as in
effect on the Closing Date and on the date of any corporate
action of such Person relative to the Loan Documents,
(ii) true copies of all corporate action taken by the Company
and ANB relative to the Loan Documents and (iii) the
authority, incumbency and signature of the respective
officers of the Company and ANB executing any Loan Document
and of the Responsible Officers authorized to sign any
certificate or other document required to be provided on
behalf of the Company or ANB pursuant hereto, all together
with satisfactory evidence of the incumbency of such
Secretary or Assistant Secretary.
(d) Good Standing Certificates. The Agent shall have
received, with a copy for each Bank, certificates from the
appropriate Secretaries of State or other applicable Official
Body dated not more than 45 days before the Closing Date
showing the good standing of the Company, ANB and each other
Material Subsidiary in its state of incorporation or
jurisdiction of organization.
(e) Financial Statements. The Agent shall have
received, with a counterpart for each Bank, copies of the
consolidated financial statements, interim financial
statements, consolidating financial statements and Call
Reports referred to in Sections 3.03, 3.04 and 3.05 hereof
respectively.
(f) Opinion of Counsel. There shall have been
delivered to the Agent a written opinion addressed to the
Agent and each Bank, dated the Closing Date, of Gene
Schneyer, Vice President and General Counsel to the Company,
in form and substance satisfactory to the Agent and each Bank
and with a signed counterpart for each Bank, (i) as to the
matters referred to in Sections 3.01, 3.02, 3.07, 3.08, 3.09
and 3.14 except that as to the matters referred to in Section
3.07 such opinion may be limited to the knowledge of such
counsel after due inquiry, and (ii) as to such other matters
incident to the transactions contemplated by this Agreement
as the Agent or any Bank may reasonably request.
(g) Officers' Certificates. The Agent shall have
received, with an executed counterpart for each Bank,
certificates from Responsible Officers as to such matters as
the Agent may reasonably request.
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(h) Fees, Expenses, etc. All fees, expenses and other
compensation required to be paid to the Agent or to the Agent
for the account of the Banks on or prior to the Closing Date
pursuant hereto or pursuant to any other written agreements,
including but not limited to those referred to in the letter
from the Agent to the Company dated March 1, 1995, shall have
been paid or received by the Agent.
(i) Termination of Predecessor Facilities. On or
before the Closing Date, the Commitments under and as defined
in the Revolving Credit Agreements dated as of March 24, 1994
among the Company, the banks named therein, Mellon Bank,
N.A., as Agent, and Nationsbank of Texas, N.A., as Co-Agent,
shall have been terminated in full, and if any loans or other
obligations of the Company are outstanding thereunder, they
shall have been paid in full.
(j) Details, Proceedings and Documents. All legal
details and proceedings in connection with the transactions
contemplated by this Agreement shall be satisfactory to the
Agent, and the Agent and the Banks shall have received all
such counterpart originals or certified or other copies of
such documents and proceedings in connection with such
transactions, in form and substance satisfactory to them, as
the Agent or any Bank may from time to time reasonably
request.
4.02. Conditions to all Loans. The obligation of each
Bank to make each and any Loan (including initial Loans) is
subject to the performance by the Borrowers of their respective
obligations to be performed hereunder on or before the date of
such Loan, satisfaction of the conditions set forth in Section
4.01 hereof, and the satisfaction of the following further
conditions precedent on and as of the date of each Loan hereunder:
(a) Notice. Standard Notice of such Loan shall have
been given by the Borrower to the Agent as provided in
Section 2.04 hereof.
(b) Representations and Warranties. The
representations and warranties contained in Article III
hereof shall be true and correct in all material respects on
and as of the date of each Loan as if made on and as of such
date, both before and after giving effect to the Loans
requested to be made on such date (except for the
representations and warranties set forth at Sections 3.06,
3.15 and 3.19 hereof, which are made solely as of the Closing
Date).
(c) No Defaults. No Event of Default or Potential
Default shall have occurred and be continuing on such date or
after giving effect to the Loans requested to be made on such
date.
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Each request by either Borrower for any Loan shall constitute a
representation and warranty by the Company that the conditions set
forth in this Section 4.02 have been satisfied as of the date of
such request. Failure of the Agent to receive notice from the
Company to the contrary before such Loan is made shall constitute
a further representation and warranty by the Company that the
conditions referred to in this Section 4.02 have been satisfied as
of the date such Loan is made.
ARTICLE V
AFFIRMATIVE COVENANTS
The Company hereby covenants to the Agent and each Bank
as follows:
5.01. Basic Reporting Requirements.
(a) Annual Audit Reports. As soon as practicable, and
in any event within 90 days after the close of each fiscal year of
the Company, the Company shall furnish to the Agent, with a copy
for each Bank, consolidated statements of income, cash flows and
changes in stockholders' equity of the Company and its
Consolidated Subsidiaries for such fiscal year and a consolidated
balance sheet of the Company and its Consolidated Subsidiaries as
of the close of such fiscal year, and notes to each, all in
reasonable detail, setting forth in comparative form the
corresponding figures for the preceding fiscal year, in the case
of the balance sheets, and for the two preceding fiscal years, in
the case of such other statements. All such financial statements
shall be accompanied by an opinion of independent public
accountants of recognized national standing selected by the
Company. Such opinion shall be free of exceptions or
qualifications of "going concern" or like nature or which relate
to a limited scope of examination. Such opinion in any event
shall contain a written statement of such accountants
substantially to the effect that (x) such accountants examined
such financial statements in accordance with generally accepted
auditing standards and accordingly made such tests of accounting
records and such other auditing procedures as such accountants
considered necessary in the circumstances and (y) in the opinion
of such accountants such financial statements present fairly the
financial position of the Company and its Consolidated
Subsidiaries, as appropriate, as of the end of such fiscal years
and the results of their operations and their cash flows and
changes in stockholders' equity for such fiscal years, in
conformity with GAAP.
(b) Quarterly Consolidated Reports. As soon as
practicable, and in any event within 45 days after the close of
each of the first three fiscal quarters of each fiscal year of the
Company, the Company shall furnish to the Agent, with a copy for
each Bank, unaudited consolidated statements of income and cash
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flows of the Company and its Consolidated Subsidiaries for such
fiscal quarter and for the period from the beginning of such
fiscal year to the end of such fiscal quarter and an unaudited
consolidated balance sheet of the Company and its Consolidated
Subsidiaries as of the close of such fiscal quarter, and notes to
each, all in reasonable detail, setting forth in comparative form
the corresponding figures for the same periods during the
preceding fiscal year (except for the consolidated balance sheet,
which shall set forth in comparative form the corresponding
balance sheet as of the prior fiscal year end). Such financial
statements shall be certified on behalf of the Company by a
Responsible Officer of the Company as presenting fairly the
financial position of the Company and its Consolidated
Subsidiaries as of the end of such fiscal quarter and the results
of their operations and their cash flows and changes in
stockholders' equity for such fiscal periods, in conformity with
GAAP, subject to normal and recurring year-end audit adjustments.
(c) Bank Financial Statements. As soon as practical
and in any event within 90 days after the close of each fiscal
year (in the case of annual Call Reports) and within 45 days after
the close of each fiscal quarter (in the case of quarterly Call
Reports) of each Insured Subsidiary for which such reports are
required by its Primary Federal Regulator, the Company shall
furnish or cause to be furnished to the Agent, with a copy for
each Bank, true and correct copies of the Call Reports prepared on
behalf of and pertaining to such Insured Subsidiary for such
fiscal year or fiscal quarter, as the case may be, in each
instance together with (i) such notes and information as the Agent
or any Bank may reasonably require in order to reconcile such Call
Reports with GAAP, and (ii) a certification by a Responsible
Officer on behalf of the Company that such Call Report fairly
presents the financial condition and capital position of such
Insured Subsidiary as of the end of the fiscal period to which it
pertains and the results of its operations and cash flows for such
fiscal periods, all in conformity with RAP.
(d) Consolidating Reports. As soon practicable, and in
any event within 45 days after the close of each of the first
three fiscal quarters of each fiscal year of the Company and 90
days after the close of each fiscal year of the Company, the
Company shall furnish to the Agent, with a copy for each Bank,
unaudited consolidating statements of income of the Company and
each of its Subsidiaries for such fiscal quarter or fiscal year,
as the case may be, and unaudited consolidating balance sheets of
the Company and each of its Subsidiaries as of the close of such
fiscal quarter or fiscal year, as the case may be, all in
reasonable detail. Such statements shall be certified on behalf
of the Company by a Responsible Officer as presenting fairly the
financial position of the Company and each of its Subsidiaries as
of the end of such fiscal quarter or fiscal year, as the case may
be, and the results of their operations for such fiscal quarter or
fiscal year, as the case may be, in conformity with GAAP
(exclusive of principles of consolidation), subject (in the case
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of quarterly reports) to normal and recurring year-end audit
adjustments.
(e) Compliance Certificates. Within 90 days after the
end of each fiscal year of the Company and within 45 days after
the end of each of the first three fiscal quarters of each fiscal
year (and in any event concurrently with the delivery of the
financial statements referred to in Subsections (a), (b) and (c)
of this Section 5.01) the Company shall deliver to the Agent, with
a copy for each Bank, a compliance certificate dated as of the end
of such fiscal year or quarter, duly executed on behalf of the
Company by a Responsible Officer of the Company and in form
acceptable to the Agent: (i) stating that, as of the date thereof,
no Event of Default or Potential Default has occurred and is
continuing or exists, or, if any Event of Default or Potential
Default has occurred and is continuing or exists, specifying in
detail the nature and period of the existence thereof and any
action taken or contemplated to be taken by the Company with
respect thereto; (ii) stating that as of the date thereof, the
Company is in compliance with the provisions of Sections 5.07,
6.01, 6.02(i) and 6.02(l) hereof and providing in reasonable
detail the information and calculations necessary or, in the
judgment of the Agent, appropriate to establish compliance with
Sections 5.07, 6.01, 6.02(i) and 6.02(l) hereof; (iii) stating
that the signer has personally reviewed this Agreement and that
such certificate is based on a reasonable and appropriate
examination made by or under the supervision of the signer
sufficient to assure that such certificate is complete and
accurate; and (iv) containing statements or certifications as to
such other matters as the Agent may from time to time reasonably
request.
(f) Asset Quality Reports. As soon as available, and
in no event later than concurrently with the delivery to the Agent
of the financial statements required pursuant to Sections 5.01(a)
and 5.01(b) hereof, the Company shall furnish to the Agent, with a
copy for each Bank, its quarterly statistical supplement in form
and substance as is currently prepared for and provided by the
Company to its outside analysts or, in the event that the Company
does not prepare such quarterly statistical supplement, the
Company shall furnish to the Agent the substantive equivalent of
such quarterly statistical supplement.
(g) Certain Other Reports and Information. Promptly
upon their becoming available to the Company, the Company shall
deliver to the Agent, with a copy for each Bank, a copy of (i) all
regular or special reports, prospectuses and amendments to the
foregoing which the Company or any Subsidiary shall file, on its
own behalf, with the Securities and Exchange Commission (or any
successor thereto) or any securities exchange, (ii) all reports,
proxy statements, financial statements and other information
distributed by the Company or any of its Subsidiaries to its
stockholders, bondholders or the financial community generally,
(iii) all reports of examination of, and if adverse information or
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comments are contained therein, any other material written
reports, letters, comments or other communications pertaining to,
any Insured Subsidiary prepared or provided by its Primary Federal
Regulator or any other Official Body (except to the extent that
such disclosure is prohibited by Law), (iv) all material reports,
filings, notices, or responses or amendments to the foregoing
which the Company or any Insured Subsidiary shall file with or
otherwise provide to any Primary Federal Regulator, the Federal
Reserve Board, the FDIC (or the successor to any of the foregoing)
or any other state or federal banking or insurance regulatory
authority, or other Official Body (except to the extent that such
disclosure is prohibited by Law). In addition to the foregoing,
at any time during which the Company's Rating Level is 11 or
lower, the Company shall provide to the Agent, without
unreasonable delay, all accountant's management letters pertaining
to, and all other reports submitted by accountants in connection
with, any audit of the Company.
(h) Further Information. The Company will promptly
furnish to the Agent, with a copy for each Bank, such other
information and in such form as the Agent or any Bank may
reasonably request from time to time.
(i) Notice of Certain Events. Promptly upon becoming
aware of any of the following (and in addition to any other
requirement of the Agent), the Company shall give the Agent notice
thereof, together with a written statement of a Responsible
Officer of the Company setting forth the details thereof and any
action taken or proposed to be taken by the Company with respect
thereto (which notice and/or written statement will be promptly
communicated by the Agent to each Bank):
(i) Any Event of Default or Potential Default.
(ii) Any pending or threatened arbitration or action,
suit, proceeding or investigation by or before any court or
regulatory authority (including, without limitation, any
Primary Federal Regulator, the Federal Reserve Board or the
FDIC or any state banking or insurance department or
regulatory agency) against or affecting the Company or any
Material Subsidiary, except for matters that if adversely
decided, individually or in the aggregate, would not be
likely to have a material adverse effect upon the business,
operations, performance or condition (financial or otherwise)
of the Company and its Subsidiaries taken as a whole or upon
the ability of either Borrower to perform its obligations
under the Loan Documents.
(iii) Any material violation, breach or default by the
Company or any Subsidiary of the Company of or under any
agreement or instrument evidencing any Indebtedness of the
Company or any such Subsidiary or otherwise material to the
business, operations, performance or condition (financial or
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otherwise) of the Company and its Subsidiaries taken as a
whole.
(iv) Any Pension-Related Event. Such notice shall be
accompanied by: (A) a copy of any notice, request, return,
petition or other document received by a Borrower or any
Controlled Group Member from any Person, or which has been or
is to be filed with or provided to any Person (including
without limitation the Internal Revenue Service, PBGC or any
Plan participant, beneficiary, alternate payee or employer
representative), in connection with such Pension-Related
Event, and (B) in the case of any Pension-Related Event with
respect to a Plan, the most recent Annual Report (5500
Series), with attachments thereto, and the most recent
actuarial valuation report, for such Plan.
(v) Any Environmental Claim pending or threatened
against the Company or any Subsidiary of the Company or any
of their respective Environmental Affiliates, or any past or
present acts, omissions, events or circumstances (including
but not limited to any dumping, leaching, deposition,
removal, abandonment, escape, emission, discharge or release
of any Environmental Concern Material at, on or under any
facility or property now or previously owned, operated or
leased by the Company or any Subsidiary or any of their
respective Environmental Affiliates) that could reasonably
form the basis of such an Environmental Claim.
(vi) Any change in the Company's or ANB's senior
unsecured debt rating by Moody's, S&P, Fitch, Duff & Phelps
and/or Thompson's.
(vii) Any change in any Law or regulation which could
reasonably be expected to have a material adverse effect upon
the business, operations, performance or condition (financial
or otherwise) of the Company or any Material Subsidiary.
(viii) Any change after the date hereof in the status
of any Subsidiary of the Company from that which is
designated in Schedule 3.19 attached hereto, including the
reasonable details thereof, which results in any Subsidiary
of the Company becoming or ceasing to be a Material
Subsidiary of the Company.
(j) Visitation; Verification. The Company shall, upon
reasonable notice and during normal business hours, permit such
persons as the Agent or any Bank may designate from time to time
to visit and inspect any of the properties of the Company and of
any Material Subsidiary, to examine their respective books and
records and take copies and extracts therefrom and to discuss
their respective affairs with their respective executive officers
and independent accountants at such times and as often as the
Agent or any Bank may reasonably request. The Company hereby
authorizes such executive officers and independent accountants to
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discuss with the Agent or any Bank the affairs of the Company and
its Subsidiaries. The Agent and the Banks shall have the right to
examine and verify accounts, inventory and other properties and
liabilities of the Company and its Material Subsidiaries from time
to time, and the Company shall cooperate, and shall cause each
Material Subsidiary to cooperate, with the Agent and the Banks in
such verification.
5.02. Insurance. The Company shall, and shall cause
each Active Subsidiary to, maintain with financially sound and
reputable insurers insurance with respect to its properties and
business and against such liabilities, casualties and
contingencies and of such types and in such amounts as is
customary in the case of entities engaged in the same or similar
businesses or having similar properties similarly situated.
5.03. Payment of Taxes and Other Potential Charges and
Priority Claims. The Company shall, and shall cause each of its
Subsidiaries to, pay or discharge
(a) on or prior to the date on which penalties attach
thereto, all taxes, assessments and other governmental
charges imposed upon it or any of its properties;
(b) on or prior to the date when due, all lawful claims
of materialmen, mechanics, carriers, warehousemen, landlords
and other like Persons which, if unpaid, might result in the
creation of a Lien upon any such property; and
(c) on or prior to the date when due, all other lawful
claims which, if unpaid, might result in the creation of a
Lien upon any such property or which, if unpaid, might give
rise to a claim entitled to priority over general creditors
of the Company or such Subsidiary in a case under Title 11
(Bankruptcy) of the United States Code, as amended, or
pursuant to any other insolvency or receivership Law;
provided, that unless and until foreclosure, distraint, levy, sale
or similar proceedings shall have been commenced, the Company or
such Subsidiary need not pay or discharge any such tax,
assessment, charge or claim so long as (x) the validity thereof is
contested in good faith and by appropriate proceedings diligently
conducted, and (y) such reserves or other appropriate provisions
as may be required by GAAP shall have been made therefor.
5.04. Preservation of Existence and Franchises.
Without limiting the right of the Company (or any of its
Subsidiaries) to merge or consolidate in accordance with and to
the extent permitted by Section 6.03 hereof, the Company shall and
shall cause each Material Subsidiary to: (a) maintain its
corporate existence and good standing in full force and effect in
its jurisdiction of incorporation; (b) preserve, renew and keep in
full force and effect the franchises, licenses, charters and
rights necessary for the conduct of its business; and (c) qualify
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and remain qualified as a foreign corporation in each jurisdiction
in which the ownership of its properties or the nature of its
business or both make such qualification necessary except for
matters for which the failure to receive or retain such
qualification individually or in the aggregate would not have a
material adverse effect on the business, operations, performance
or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole.
5.05. Maintenance of Properties/Business. The Company
shall, and shall cause each of its Subsidiaries to, maintain or
cause to be maintained in good repair, working order and condition
the properties now or hereafter owned, leased or otherwise
possessed by it and shall make or cause to be made all needful and
proper repairs, renewals, replacements and improvements thereto so
that the business carried on in connection therewith may be
properly and advantageously conducted at all times.
5.06. Avoidance of Other Conflicts. The Company shall
not, and shall not permit any of its Subsidiaries to, violate or
take or omit to take any action in conflict with, be in violation
of or conflict with, or be or remain subject to any liability
(contingent or otherwise) on account of any violation or conflict
with:
(a) any Law,
(b) its articles of incorporation or by-laws (or other
constituent documents), or
(c) any material agreement or instrument to which it is
a party or by which it or any of its Assets (now owned or
hereafter acquired) may be subject or bound.
5.07. Capitalization of Insured Subsidiaries. The
Company shall at all times cause all Insured Subsidiaries to be at
least "adequately capitalized" as determined and defined pursuant
to the regulations of their respective Primary Federal Regulators.
5.08. Financial Accounting Practices. The Company
shall, and shall cause each of its Consolidated Subsidiaries to,
make and keep books, records and accounts which, in reasonable
detail, accurately and fairly reflect its transactions and
dispositions of its Assets and maintain a system of internal
accounting controls sufficient to provide reasonable assurances
that (a) transactions are executed in accordance with management's
general or specific authorization, (b) transactions are recorded
as necessary (i) to permit preparation of financial statements in
conformity with GAAP (and any other accounting principles
applicable thereto) and (ii) to maintain accountability for
Assets, (c) access to Assets is permitted only in accordance with
management's general or specific authorization and (d) the
recorded accountability for Assets is compared with the existing
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Assets at reasonable intervals and appropriate action is taken
with respect to any differences.
5.09. Use of Proceeds. The Borrowers shall use the
proceeds of all Loans hereunder only for the Borrowers' working
capital and general corporate purposes. The Borrowers shall not
use the proceeds of any Loans hereunder, directly or indirectly,
in any manner inconsistent with Section 3.12 hereof, for any
unlawful purpose or in any manner inconsistent with any other
provision hereof.
5.10. Continuation of or Change in Business. The
Company shall and shall cause each of its Subsidiaries to continue
to engage in their respective businesses substantially as
conducted and operated during the present and preceding fiscal
year, and the Company shall not, and shall not permit any of its
Subsidiaries to, engage in any other business which is not of
substantially the same general nature as the business engaged in
by the Company and its Subsidiaries as of the date hereof except
that the Company may, and may cause any Subsidiary to, engage in
any other business whatsoever to the extent that the aggregate
Assets of all such business(es) do not exceed an amount equal to
6% of Consolidated Assets. As used herein, "businesses of
substantially the same general nature" shall be deemed to include
businesses in and relating to all types of financial products and
services (consumer and commercial) (in the case of commercial
products and services, other than the business of engaging in
highly leveraged transactions; the business of financing the
purchase of commercial real estate and/or the business of
investing in commercial real estate) and related technology;
businesses in and relating to direct marketing, assessing consumer
needs and preferences, dissemination of information, and data
manipulation; and businesses in and relating to insurance and
leasing products and services and the servicing of all types of
receivables (in each case, to the extent not included in the
financial products and services referred to above).
5.11. Consolidated Tax Return. The Company shall not,
and shall not suffer any of its Subsidiaries to, file or consent
to the filing of any consolidated income tax return with any
Person other than the Company and its Subsidiaries.
5.12. Fiscal Year. The Company shall not, and shall
not suffer any of its Subsidiaries to, change its fiscal year or
fiscal quarter.
ARTICLE VI
NEGATIVE COVENANTS
The Company covenants to the Agent and each Bank as
follows:
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6.01. Financial Covenants.
(a) Consolidated Tangible Net Worth. Consolidated
Tangible Net Worth shall not at any time be less than the sum of
(i) $370,000,000 plus (ii) an amount equal to 65% of the aggregate
of positive Consolidated Net Income (without deduction for
quarterly losses) for each fiscal quarter which begins after
December 31, 1994 and ends prior to the date for which compliance
with this Section 6.01(a) is being determined.
(b) Double Leverage Ratio. The Double Leverage Ratio
shall not at any time exceed 1.3 to 1.0.
(c) Total Liabilities to Consolidated Tangible Net
Worth. The ratio of Total Liabilities of the Company to
Consolidated Tangible Net Worth shall not at any time exceed 5.0
to 1.0.
(d) Consolidated Interest Coverage Ratio. The
Consolidated Interest Coverage Ratio for the Rolling Period shall
at no time be less than 1.25 to 1.0.
(e) Contingent Obligations. The aggregate of all
Contingent Obligations of the Company shall not at any time exceed
Consolidated Tangible Net Worth.
(f) Doubtful Accounts Managed and/or Owned. At no time
shall the aggregate amount of reserves for credit losses
maintained by the Company and its Consolidated Subsidiaries, on a
managed and/or owned basis, against and in respect of all
receivables either managed or owned by the Company and its
Consolidated Subsidiaries be less than an amount equal to 75% of
the total of all receivables 90 or more days contractually past
due which are either managed or owned by the Company and its
Consolidated Subsidiaries.
6.02. Liens. The Company shall not, and shall not
permit any of its Subsidiaries to, at any time, create, incur,
assume or suffer to exist any Lien on any of its property or
Assets, tangible or intangible, now owned or hereafter acquired,
(including, without limitation, the capital stock of any
Subsidiary) or agree or become liable to do so, except for the
following ("Permitted Liens"):
(a) Liens existing on the date hereof securing
obligations existing on the date hereof and listed on
Schedule 6.02(a).
(b) Liens arising from taxes, assessments, charges,
levies or claims described in Section 5.03 hereof that are
not yet due or that remain payable without penalty or to the
extent permitted to remain unpaid under the provisions of
such Section 5.03.
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(c) Liens on property securing all or part of the
purchase price thereof to the Company or a Subsidiary of the
Company, as the case may be, and Liens (whether or not
assumed) existing in property at the time of purchase thereof
by the Company or such Subsidiary (and extension, renewal and
replacement Liens upon the same property), provided
(i) such Lien is created before or substantially
simultaneously with the purchase of such property by the
Company or such Subsidiary;
(ii) each such Lien is confined solely to the
property so purchased, improvements thereto and proceeds
thereof, and
(iii) the aggregate amount of the obligations
secured by all such Liens on any particular property at
any time purchased by the Company or such Subsidiary
shall not exceed 90% of the lesser of the fair market
value of such property at such time or the actual
purchase price of such property.
(d) Deposits or pledges of cash or securities (other
than the capital stock of any Subsidiary of the Company) in
the ordinary course of business to secure (i) workmen's
compensation, unemployment insurance or other social security
obligation, (ii) performance of bids, tenders, trade
contracts (other than for payment of money) or leases, (iii)
stay, surety or appeal bonds or (iv) other obligations of a
like nature incurred in the ordinary course of business.
(e) Zoning restrictions, easements, minor restrictions
on the use of real property, minor irregularities in title
thereto and other minor Liens that do not in the aggregate
materially detract from the value of a property or asset, or
materially impair its use in the business of, the Company or
its Subsidiaries, as the case may be.
(f) Deposits or pledges of cash or securities (other
than the capital stock of the Company or any Subsidiary of
the Company) by the Company or any Subsidiary of the Company
in the ordinary course of business to secure performance
obligations of the Company or any such Subsidiary, as the
case may be, under any interest rate or currency swap or cap
or other interest rate or currency hedge agreement incurred
by the Company or any such Subsidiary in the ordinary course
of business or other obligations of a like nature incurred by
the Company or any such Subsidiary in the ordinary course of
business.
(g) Liens granted by Insured Subsidiaries in the
ordinary course of business.
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(h) Liens created, incurred or otherwise arising to
secure obligations incurred in direct connection with
conveyances of Assets by the Company or any Subsidiary of the
Company for the purpose of the securitization of those Assets
for cash in the ordinary course of business and other Liens
arising in connection with any other securitization structure
consented to in advance by the Required Banks, which consent
shall not be unreasonably withheld.
(i) Liens granted by the Company or a Subsidiary of the
Company to secure Indebtedness or other obligations of such
Person incurred in anticipation of and relating to the
securitization of loan assets of and by such Person in the
ordinary course of business, provided, however, that neither
the aggregate amount of all Indebtedness or other obligations
so secured nor the aggregate value of all loan assets upon
which such Liens are granted by the Company and all
Subsidiaries shall at any time exceed $200,000,000 and
provided further that the Indebtedness or other obligations
so secured shall be evidenced in writing and shall, by their
terms, have a final maturity of not more than 120 days from
the date upon which such Liens are granted, whereupon such
Liens shall be discharged and released.
(j) Liens granted by the Company or a Subsidiary of the
Company to secure Indebtedness or any other obligations of
any such Person, provided that neither the aggregate amount
of all Indebtedness or other obligations so secured nor the
aggregate value of all Assets upon which such Liens are
granted shall exceed $1,000,000 at any time. For purposes
hereof, the value of Assets upon which Liens are granted
shall be determined by reference to, and equal to, the face
amount payable to the Company or a Subsidiary of all Assets
consisting of accounts, instruments, notes or other evidences
of Indebtedness and at the fair market value of all tangible
or other Assets.
(k) Liens securing the claims or demands of
materialmen, mechanics, contractors, landlords and other like
Persons for labor, materials, supplies or rentals incurred in
the ordinary course of business or in connection with the
construction of a corporate headquarters building facility of
the Company and its Subsidiaries, but only if the payment
thereof is not at the time required, or the validity thereof
is being contested in good faith and reserves have been made
with respect thereto pursuant to Section 5.03.
(l) Liens granted by the Company on Investment
Securities owned by the Company, provided that: (i) each
such Lien is incurred in connection with a Repurchase
Agreement entered into by the Company in the normal course of
business; (ii) the Company's Rating Level is 9 or better; and
(iii) the aggregate principal face amount of all Repurchase
Agreements to which the Company is a party at any time shall
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not exceed 10% of Consolidated Assets. For purposes of this
Section 6.02(l), "Investment Securities" shall mean United
States government and other securities customarily utilized
in repurchase transactions; and "Repurchase Agreement" shall
mean an agreement between the Company and a creditworthy
counterparty to exchange securities for cash and/or
securities for a specified period of time.
(m) Liens on life insurance policies owned by the
Company securing Company borrowings on such life insurance
policies pursuant to a corporate-owned life insurance program
with respect to employees of the Company and its
Subsidiaries.
"Permitted Lien" shall in no event include any Lien imposed by, or
required to be granted pursuant to, ERISA or any Environmental
Law.
6.03. Mergers, Acquisitions, etc. The Company shall
not, and shall not permit any of its Material Subsidiaries to
(v) merge with or into or consolidate with any other Person,
(w) liquidate, wind up, dissolve or divide, (x) acquire all or any
substantial portion of the properties of any going concern or
going line of business, (y) acquire all or any substantial portion
of the properties of any other Person other than in the ordinary
course of business, or (z) agree, become or remain liable
(contingently or otherwise) to do any of the foregoing, except:
(a) A wholly-owned Material Subsidiary of the Company
may merge with or into or consolidate with any other wholly-
owned Subsidiary of the Company, provided that no Event of
Default or Potential Default shall occur and be continuing or
shall exist at such time or after giving effect to such
transaction;
(b) A wholly-owned Material Subsidiary of the Company
may merge with or consolidate with the Company, provided that
the Company shall be the surviving corporation and no Event
of Default or Potential Default shall occur and be continuing
or shall exist at such time or after giving effect to such
transaction; and
(c) The Company or a Material Subsidiary of the Company
may merge with or into or consolidate with any other Person,
or may, subject to the other provisions of this Agreement,
acquire all or substantially all of the properties of any
going concern or of any other Person provided that (i) with
respect to the Company, the Company is the surviving entity
or, with respect to any such Material Subsidiary, the
surviving entity is a wholly-owned Subsidiary of the Company;
(ii) the Person into or with which the Company or such
Subsidiary is merged or consolidated or whose properties are
acquired is engaged in business of substantially the same
general nature (as specified in the last sentence of Section
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5.10 hereof) as the Company and its Subsidiaries except as
otherwise permitted pursuant to Section 5.10 hereof, and
(iii) no Event of Default or Potential Default shall occur
and be continuing or shall exist at such time or after giving
effect to such merger, consolidation or acquisition;
provided, however, that in the case of any permitted merger or
consolidation involving ANB, the surviving or resulting entity, if
other than the Company or ANB, (1) shall have expressly assumed,
in a manner satisfactory to the Agent, the obligations of ANB
hereunder and under the other Loan Documents and (2) if requested
by any Bank, shall execute and deliver to such Bank, in exchange
for the Note of ANB then held by such Bank, a Note of the
surviving or resulting entity in substantially the same form.
6.04. Dispositions of Properties. (a) The Company
shall not, and shall not permit any of its Subsidiaries to, sell,
convey, assign, transfer, pledge or otherwise dispose of any
capital stock in a Material Subsidiary. (b) The Company shall
not, and shall not permit any of its Material Subsidiaries to,
sell, convey, assign, lease, transfer, abandon or otherwise
dispose of, voluntarily or involuntarily (any of the foregoing
being referred to in this Section 6.04(b) as a "transaction" and
any series of related transactions constituting but a single
transaction) any Indebtedness of a Material Subsidiary or any of
its other properties or Assets (tangible or intangible), or agree,
become or remain liable (contingently or otherwise) to do any of
the foregoing, except:
(i) Transactions in the ordinary course of business and
on customary terms;
(ii) Transactions between Subsidiaries of the Company
or between the Company and its Subsidiaries, subject to
Section 6.05 hereof;
(iii) CNB's sale and transfer of the Accounts as
permitted by Section 6.02(n); and
(iv) Sales, conveyances, assignments or other transfers
or dispositions in immediate exchange for cash or tangible
Assets (excluding Indebtedness of any Person), provided that
such transaction shall not otherwise be prohibited by any
other provision of this Agreement and no Event of Default
shall occur and be continuing or shall exist at such time or
after giving effect to such transaction.
By way of illustration, and without limitation, it is understood
that the following are dispositions of property or Assets subject
to this Section 6.04(b): any disposition of accounts, chattel
paper or general Intangibles; and any disposition of any leasehold
interest. Nothing in this Section 6.04(b) shall be construed to
limit the restriction set forth in Section 6.04(a) hereof or any
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other restriction on dispositions of property imposed by this
Agreement.
6.05. Dealings with Affiliates. The Company shall not,
and shall not permit any of its Subsidiaries to, enter into or
carry out any transaction with (including, without limitation,
purchase or lease property or services from, sell or lease
property or services to, loan or advance to, or enter into, suffer
to remain in existence or amend any contract, agreement or
arrangement with) any Affiliate of the Company or of such
Subsidiary, directly or indirectly, or agree, become or remain
liable (contingently or otherwise) to do any of the foregoing,
except:
(a) Existence and performance of contracts, agreements
and arrangements in existence as of the date hereof and any
renewals, extensions, or continuations thereof;
(b) Directors, officers and employees of the Company
and its Subsidiaries may be compensated for services rendered
in such capacity to the Company or such Subsidiary, provided
that such compensation is in good faith and on terms no less
favorable to the Company or such Subsidiary than those that
could have been obtained in a comparable transaction on an
arm's-length basis from an unrelated Person, and the board of
directors of the Company or such Subsidiary (including a
majority of the directors having no direct or indirect
interest in such transaction) approve the same;
(c) Transactions in the ordinary course of business and
consistent with past practices between a Subsidiary of the
Company, on the one hand, and the Company or another
Subsidiary of the Company, on the other hand, in good faith
and on terms not substantially less favorable to the Company
or either such Subsidiary than those that could have been
obtained in a comparable transaction on an arm's-length basis
from an unrelated Person; and
(d) Other transactions with Affiliates in good faith
and on terms not substantially less favorable to the Company
or such Subsidiary than those that could have been obtained
in a comparable transaction on an arm's-length basis from an
unrelated Person.
6.06. Limitation on Other Restrictions on Dividends by
Subsidiaries, etc. The Company shall not permit any Subsidiary of
the Company to be or become subject to any restriction of any
nature (whether arising by operation of Law, by agreement, by its
articles of incorporation, by-laws or other constituent documents
of such Subsidiary, or otherwise) on the right of such Subsidiary
from time to time to (w) declare and pay Stock Payments with
respect to capital stock owned by the Company or any Subsidiary,
(x) pay any Indebtedness, obligations or liabilities from time to
time owed to the Company or any Subsidiary including, without
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limitation, any management fees, tax payments or otherwise
pursuant to any contractual arrangement for the provision of goods
or services, or (y) make loans or advances to the Company or any
Subsidiary, or (z) transfer any of its properties or assets to the
Company or any Subsidiary, except:
(a) Restrictions pursuant to this Agreement;
(b) Legal restrictions of general applicability under
the corporation law under which such Subsidiary is
incorporated, and fraudulent conveyance or similar laws or
general applicability for the benefit of creditors of such
Subsidiary generally;
(c) With respect to clause (z) above: (i) non-
assignment provisions of any executory contract or of any
lease by the Company or such Subsidiary as lessee, and (ii)
restrictions on transfer of property subject to a Permitted
Lien for the benefit of the holder of such Permitted Lien;
(d) Any restriction contained in an agreement or
instrument applicable to a Subsidiary of the Company acquired
by the Company or its Subsidiary after the date hereof, which
restriction was not entered into in connection with or in
contemplation of such acquisition, and which restriction is
not applicable to any Person, property or assets, other than
such acquired Subsidiary and its property and assets;
(e) Any restriction or limitation imposed by an
Official Body having jurisdiction thereof;
(f) Restrictions resulting from requirements imposed on
Advanta Mortgage Corp. USA ("AMC USA") as a FNMA approved
mortgage servicer or requirements contained in various
mortgage servicing agreements and whole loan sales agreements
entered into and to be entered into by AMC USA, in each case,
requiring AMC USA and/or its parent Advanta Mortgage Holding
Corp. ("AMHC") to maintain minimum equity in or of AMC USA to
the extent that the failure to comply with such requirements
would be likely to have a material adverse effect on the
business, operations, condition, (financial or otherwise) of
AMC USA and/or AMHC and provided further that in no event
shall the Company agree to, or cause or permit any agreement
by AMC USA or AMHC to, maintain or cause to be maintained
equity in AMC USA in excess of $10,000,000;
(g) Restrictions resulting from requirements imposed on
Advanta Business Services Corp. ("ABS") by the Municipal Bond
Investors Assurance Corporation or requirements contained in
various credit enhancement agreements entered into and to be
entered into by ABS, in each case, requiring ABS and/or its
parent to maintain minimum equity in or of ABS to the extent
that the failure to comply with such requirements would be
likely to have a material adverse effect on the business,
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operations, condition, (financial or otherwise) of ABS and
provided further that in no event shall the Company agree to,
or cause or permit any agreement by ABS to, maintain or cause
to be maintained equity in ABS in excess of $10,000,000; and
(h) Any restriction or limitation negotiated in good
faith at arms' length which is contained in an agreement or
instrument applicable to a Subsidiary of the Company (other
than a Material Subsidiary) such as provisions relating to
dividend and other payment restrictions, capital maintenance
and contracted-for distribution mechanisms intended (i) to
protect a minority capital or quasi-capital position
(evidenced by common stock, preferred stock, subordinated
notes, limited partnership interests and the like) in such
Subsidiary and (ii) to assure the minority investors of their
proportionate share in distributions from such Subsidiary;
provided, however, that the aggregate initial investments and
any subsequent capital contribution by the Company and its
Subsidiaries (other than through retained earnings or
distributions not taken from any such Subsidiary) in all such
Subsidiaries shall not exceed an amount equal to 10% of the
Consolidated Assets at any time.
ARTICLE VII
EVENTS OF DEFAULT
7.01. Events of Default. If one or more of the
following described Events of Default shall occur and be
continuing or shall exist (for any reason, whether voluntary,
involuntary or effected or required by Law), that is to say:
(a) Either Borrower shall default in the payment when
due of principal of any Note; or
(b) Either Borrower shall default in the payment when
due of interest on any Note or of any Facility Fee,
Utilization Fee or other amount payable hereunder or under
any other Loan Document, and such default shall have
continued for a period of five days thereafter; or
(c) The Company shall default in the observance,
performance or fulfillment of any covenant contained in
Article VI hereof, or any of the covenants contained in
Sections 5.01(i)(i), 5.04(a), 5.04(b), 5.07, 5.09 or 5.10
hereof; or
(d) Any representation or warranty made by either
Borrower herein or in any other Loan Document, or any
certificate or financial statement furnished pursuant to the
provisions hereof or thereof, shall prove to have been
incorrect, false or misleading in any material respect as of
the time made, furnished or deemed made; or
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(e) Either Borrower shall default in the observance,
performance or fulfillment of any other covenant (not
otherwise referred to in (a), (b), (c) or (d) above),
condition or provision hereof or of any other Loan Document
and such default shall not be remedied for a period of 30
days after written notice thereof to the Company from the
Agent or the holder of any Note issued hereunder; or
(f) The Company or any Subsidiary of the Company shall
default (i) in any payment of principal of or interest on any
Indebtedness in principal amount of $10,000,000 or more
beyond any period of grace provided with respect thereto, or
(ii) in the performance of any other covenant, term or
condition contained in any agreement under which any such
Indebtedness is created, evidenced or secured if the effect
of such default is to cause, or permit the holder or holders
of such obligation or their agents (or trustee on behalf of
such holder or holders) to cause, such obligation to become
due prior to its stated maturity; or
(g) Any one or more Pension-Related Events referred to
in subsection (a)(ii), (b) or (e) of the definition of
"Pension-Related Event" shall have occurred; or any one or
more other Pension-Related Events shall have occurred with
respect to a Plan or Plans having "unfunded benefit
liabilities" within the meaning of Section 4001(a)(16) of
ERISA) aggregating in excess of $10,000,000, or with respect
to a Multiemployer Plan or Multiemployer Plans where the
aggregate potential liability to the Borrowers and all
Controlled Group Members exceeds $10,000,000; or
(h) One or more judgments for the payment of money
shall have been entered against the Company or any Subsidiary
of the Company, which judgment or judgments exceed
$10,000,000 in the aggregate, and such judgment or judgments
shall have remained undischarged and unstayed for a period of
thirty days; or
(i) This Agreement or any other Loan Document for any
reason shall be or become, in whole or in material part,
nullified or other than in full force and effect; or
(j) Any judicial or regulatory action or proceeding is
initiated against the Company or any Material Subsidiary by
any regulatory authority (including, without limitation, any
Primary Federal Regulator, the Federal Reserve Board or the
FDIC or any state banking or insurance department or
regulatory agency) which, if resolved against the Company or
such Material Subsidiary, could, either individually or in
the aggregate, reasonably be expected to restrict the ability
of the Borrowers to repay all outstanding Loans hereunder; or
(k) A Change of Control shall have occurred; or
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(l) (A) An involuntary proceeding shall be commenced in
a court of competent jurisdiction (or by or before any
Official Body having the power to appoint a conservator or
receiver for an Insured Subsidiary) or an involuntary
petition shall be filed in a court of competent jurisdiction
seeking (i) relief in respect of the Company or any
Subsidiary of the Company or of a substantial part of the
property or assets of the Company or such Subsidiary under
Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal or state bankruptcy,
insolvency, conservatorship, receivership or similar law,
(ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Company
or any Subsidiary of the Company or for a substantial part of
the property or assets of the Company or such Subsidiary or
(iii) the winding-up or liquidation of the Company or a
Subsidiary of the Company, and (B) such proceeding or
petition shall continue undismissed and unstayed for 60 days
or an order or decree approving or ordering any of the
foregoing shall be entered or any such appointment shall be
made; or
(m) The Company or a Subsidiary of the Company shall
institute proceedings to be adjudicated a voluntary bankrupt,
or shall consent to the filing of a bankruptcy proceeding
against it, or shall file a petition or answer or consent
seeking reorganization under the Federal bankruptcy laws, or
any other similar applicable Federal or state law, or shall
consent to the filing of any such petition, or shall seek or
consent to the appointment of a conservator or receiver or of
a liquidator or trustee or assignee in bankruptcy or
insolvency of it or of a substantial part of its property, or
shall make an assignment for the benefit of creditors, or
shall admit in writing its inability to pay its debts
generally as they become due, or corporate action shall be
taken by the Company or such Subsidiary in furtherance of any
of the aforesaid purposes;
then, (i) as to any Event of Default specified under subsections
(a) through (k) of this Article VII, the Banks shall be under no
further obligation to make Loans hereunder, and the Agent shall,
upon the request of the Required Banks, by notice to the Company,
declare the unpaid balance of all Notes then outstanding and
interest accrued thereon and all other liabilities of the
Borrowers under the Loan Documents to be forthwith due and
payable, and the same shall thereupon become and be immediately
due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived, and
an action therefor shall immediately accrue; and (ii) as to any
Event of Default specified under subsections (l) or (m) of this
Article VII, the Banks shall be under no further obligation to
make Loans hereunder and the unpaid balance of all Notes
outstanding hereunder and interest accrued thereon and all other
liabilities of the Borrowers under the Loan Documents shall be
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immediately due and payable, without presentment, demand, protest
or notice of any kind, all of which are hereby expressly waived,
and an action therefor shall immediately accrue.
ARTICLE VIII
THE AGENT
8.01. Appointment. Each Bank hereby appoints Mellon
Bank, N.A. as Agent for such Bank under this Agreement and the
other Loan Documents and authorizes the Agent to take such action
on its behalf under the provisions of this Agreement and the other
Loan Documents, and to exercise such powers and perform such
duties, as are expressly delegated to the Agent by the terms
hereof or thereof, together with such other powers as are
reasonably incidental thereto. The Agent agrees to act as such,
upon the express conditions contained in this Article VIII. Each
Bank hereby irrevocably authorizes the Agent to execute and
deliver each of the Loan Documents requiring execution by the
Agent and to accept delivery of each of the Loan Documents.
Notwithstanding any provision to the contrary elsewhere in the
Loan Documents, the Agent shall have no duties or responsibilities
except those expressly set forth in the Loan Documents, or any
fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. The provisions of this Article
VIII are solely for the benefit of the Agent and the Banks, and
neither the Borrowers nor any other Person shall have any rights
as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under the Loan Documents, the
Agent shall act solely as Agent of the Banks and shall not be
deemed to have assumed any obligation or relationship of agency or
trust with or for the Borrowers. Each Bank agrees that the rights
and remedies granted to the Agent under the Loan Documents shall
be exercised exclusively by the Agent, and that no Bank shall have
any right individually to exercise any such right or remedy,
except to the extent provided herein or therein.
8.02. Exercise of Powers. The Agent shall take any
action of the type specified in this Agreement or any other Loan
Document as being within the Agent's rights, powers or discretion
in accordance with directions from the Required Banks (or, to the
extent this Agreement or such Loan Document expressly requires the
direction or consent of some other Person or set of Persons, then
instead in accordance with the directions of such other Person or
set of Persons). In the absence of such directions, the Agent
shall have the authority (but under no circumstances shall be
obligated), in its sole discretion, to take any such action,
except to the extent this Agreement or such Loan Document
expressly requires the direction or consent of the Required Banks
(or some other Person or set of Persons), in which case the Agent
shall not take such action absent such direction or consent. Any
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action or inaction pursuant to such direction, discretion or
consent shall be binding on all the Banks. The Agent shall not
have any liability to any Person as a result of (x) the Agent
acting or refraining from acting in accordance with the directions
of the Required Banks (or other applicable Person or set of
Persons), (y) the Agent refraining from acting in the absence of
instructions to act from the Required Banks (or other applicable
Person or set of Persons), whether or not the Agent has
discretionary power to take such action, or (z) the Agent taking
discretionary action it is authorized to take under this Section
(subject, in the case of this clause (z), to the provisions of
Section 8.04(i) hereof).
8.03. Delegation of Duties. The Agent may execute any
of its duties under the Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall
not be responsible for the negligence or misconduct of any agents
or attorneys-in-fact selected by it with responsible care except
to the extent otherwise required by Section 8.04.
8.04. Exculpatory Provisions. None of the Agent or any
of its officers, directors, employees, representatives, agents,
attorneys-in-fact or Affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such person under
or in connection with the Loan Documents (except for its or such
person's own gross negligence or willful misconduct), or (ii)
responsible in any manner for any recitals, statements,
representations or warranties made contained in any Loan Document
or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or
in connection with, this Agreement or any other Loan Document, or
for any failure of either Borrower or any of its officers to
perform its obligations hereunder or thereunder. The Agent shall
be under no obligation (i) to ascertain, inquire or give any
notice as to (A) the observance or performance of any of the
terms, conditions, provisions, covenants or agreements contained
in this Agreement or any other Loan Document, (B) the business,
operations, condition (financial or otherwise) or prospects of
either Borrower or any other Person or (C) except to the extent
set forth in Section 8.06 hereof, the existence of any Event of
Default or Potential Default or (ii) to inspect the properties,
books or records of the Company or any Subsidiary. The Agent
shall not be responsible to any Bank for the execution, delivery,
effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement, the Notes or any
other Loan Documents or for any representations, warranties,
recitals or statements made herein or therein or made in any
written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in
connection herewith or therewith furnished by the Agent to the
Banks or by or on behalf of either Borrower to the Agent or any
Bank. The duties and responsibilities of the Agent under this
Agreement shall be mechanical and administrative in nature. The
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Agent shall be under no obligation to take any action hereunder or
under any other Loan Document if the Agent believes in good faith
that taking such action may conflict with any Law or provision of
this Agreement or another Loan Document.
8.05. Reliance by Agent. The Agent shall be entitled
to rely, and shall be fully protected in relying, upon any notice,
writing, resolution, note, consent, certificate, affidavit,
letter, cablegram, telegram, facsimile, telex or teletype message,
statement, order or other document or conversation (written or
oral, and including telephone conversations) believed by it to be
genuine and correct and to have been signed, sent or made by the
proper person or persons (whether or not made in a manner
permitted or required by this Agreement or any Loan Document), and
the Agent shall not have any duty to verify the identity or
authority of any Person giving such notice or other communication.
The Agent may consult with legal counsel (including, without
limitation, in-house counsel for the Agent or in-house or other
counsel for any Borrower), independent public accountants and any
other experts selected by it from time to time, and the Agent
shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel,
accountants or experts. The Agent may conclusively rely upon the
truth of the statements and the correctness of the opinions
expressed in any certificates or opinions furnished to the Agent
in accordance with the requirements of this Agreement or any other
Loan Document. Whenever the Agent shall deem it necessary or
desirable that a matter be proved or established with respect to
any Borrower or Bank, such matter may be established by a
certificate of such Person, and the Agent may conclusively rely
upon such certificate (unless other evidence with respect to such
matter is specifically prescribed in this Agreement or another
Loan Document). The Agent shall be fully justified in failing or
refusing to take or continue to take any action under this
Agreement or any other Loan Document unless it shall first receive
such advice or concurrence of the Required Banks (or to the extent
specifically provided herein, of all of the Banks) as it deems
appropriate. The Agent may fail or refuse to take any action
unless it shall be indemnified to its satisfaction from time to
time against any and all amounts, liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature which may be
imposed on, incurred by or asserted against the Agent by reason of
taking or continuing to take any such action.
8.06. Notice of Default. The Agent shall not be deemed
to have knowledge or notice of the occurrence of any Potential
Default or Event of Default hereunder unless the Agent has
received notice from a Bank or a Borrower referring to this
Agreement, describing such Potential Default or Event of Default
and stating that such notice is a "notice of default". In the
event that the Agent receives such notice, the Agent shall give
prompt notice thereof to the Banks.
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8.07. Non-Reliance on Agent and Other Banks. Each Bank
expressly acknowledges that neither the Agent nor any of its
officers, directors, employees, agents, representatives,
attorneys-in-fact or Affiliates has made any representations or
warranties to it and that no act by the Agent hereinafter taken,
including any review of the affairs of the Company or any of its
Subsidiaries, shall be deemed to constitute any representation or
warranty by the Agent or any other such Person to any Bank. Each
Bank represents to the Agent that it has, independently and
without reliance upon the Agent or any other Bank, and based on
such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, assets,
operations, property, financial and other conditions, prospects
and creditworthiness of the Borrowers, made its own analysis of
all legal matters relating to the Loan Documents and made its own
decision to make its Commitment hereunder and enter into this
Agreement. Each Bank also represents that it will, independently
and without reliance upon the Agent or any other Bank, and based
on such documents and information as it shall deem appropriate at
the time, continue to make its own credit analysis, legal
analysis, appraisals and decisions in taking or not taking action
under the Loan Documents, and will make such investigation as it
deems necessary to inform itself as to the business, Assets,
operations, property, financial and other conditions, prospects
and creditworthiness of the Borrowers. In each instance where a
Loan Document provides that the Company or a Borrower shall
furnish to the Agent copies or counterparts for each Bank of any
notice, report or other document, the Agent shall, promptly upon
receipt thereof, furnish to the Banks the copies or counterparts
thereof so received. Except as provided in the preceding sentence
and except for any other notices, reports and other documents
expressly required by the Loan Documents to be furnished to the
Banks by the Agent, the Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to
provide any Bank with any credit or other information concerning
the business, operations, assets, property, financial and other
conditions, prospects or creditworthiness of the Borrowers which
is presently or may hereafter come into the possession of the
Agent or any of its officers, directors, employees, agents,
representatives, attorneys-in-fact or Affiliates, or with any
other reports, notices or information of any nature.
8.08. Indemnification. The Banks agree to reimburse
and indemnify the Agent and each Co-Agent in its capacity as such
and its directors, officers, employees, agents and Affiliates (to
the extent not reimbursed by the Borrowers and without limitation
of the obligations of the Borrowers to do so) Pro Rata (or if the
Total Commitment has been terminated and all Loans have been
repaid, their respective Commitments immediately prior to such
termination and repayment) from and against any and all
liabilities, obligations, losses, damages, penalties, claims,
actions, judgments, suits, costs, reasonable expenses or
disbursements of any kind whatsoever (including, without
limitation, the fees and disbursements of counsel for the Agent,
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such Co-Agent or such other Person) in connection with any
investigative, administrative or judicial proceeding commenced or
threatened (whether or not the Agent, such Co-Agent or such other
Person shall be designated a party thereto) which may at any time
(including without limitation at any time following the repayment
of the Loans) be imposed on, incurred by or asserted against the
Agent or such Co-Agent in its capacity as such or such other
Person in any way relating to or arising out of this Agreement or
any other Loan Documents or other documents contemplated by or
referred to herein or the transactions contemplated hereby or
thereby or any action taken or omitted to be taken by the Agent,
such Co-Agent or such other Person under or in connection with any
of the foregoing, but only to the extent that any of the foregoing
is not paid by the Company or any of its Subsidiaries, provided
that no Bank shall be liable to the Agent, a Co-Agent or any such
other Person for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, claims, actions,
judgments, suits, costs, expenses or disbursements resulting
solely from the negligence or willful misconduct of the Agent,
such Co-Agent or such other Person, as finally determined by a
court of competent jurisdiction. The agreements in this Section
8.08 shall survive the payment of all the Loans.
8.09. Agent In Its Individual Capacity. The Agent and
its Affiliates may, without liability to account, make loans to,
accept deposits from and generally engage in any kind of business
with the Company and its Subsidiaries as though the Agent were not
the Agent hereunder. With respect to its Commitment and the Loans
made by it, the Agent shall have the same rights and powers under
this Agreement and each other Loan Document as any other Bank and
may exercise the same as though it were not the Agent, and the
terms "Banks," "holders of Notes" and like terms shall include the
Agent in its individual capacity.
8.10. Successor Agent. The Agent may resign at any
time by giving 30 days' prior written notice thereof to the Banks
and the Company. The Agent may be removed by the Required Banks
at any time by giving 10 days' prior written notice thereof to the
Agent, the other Banks and the Company. Upon any such resignation
or removal, the Required Banks shall have the right to appoint a
successor Agent. If no successor Agent shall have been so
appointed, and shall have accepted such appointment, within 30
days after such notice of resignation or within 10 days after such
notice of removal, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent. Upon the acceptance by a
successor Agent of its appointment as Agent hereunder, such
successor Agent shall thereupon succeed to and become vested with
all the properties, rights, powers, privileges and duties of the
former Agent, without further act, deed or conveyance. Upon the
effective date of resignation or removal of a retiring Agent, such
Agent shall be discharged from its duties as Agent under this
Agreement and the other Loan Documents, but the provisions of this
Agreement shall inure to its benefit as to any actions taken or
omitted by it while it was Agent under this Agreement. If and so
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long as no successor Agent shall have been appointed, then any
notice or other communication required or permitted to be given by
the Agent shall be sufficiently given if given by the Required
Banks, all notices or other communications required or permitted
to be given to the Agent shall be given to each Bank, and all
payments to be made to the Agent shall be made directly to the
Borrower or Bank for whose account such payment is made.
8.11. Calculations. The Agent shall not be liable for
any calculation, apportionment or distribution of payments made by
it in good faith. If such calculation, apportionment or
distribution is subsequently determined to have been made in
error, the sole recourse of any Bank to whom payment was due but
not made shall be to recover from the other Banks any payment in
excess of the amount to which they are determined to be entitled
or, if the amount due was not paid by the appropriate Borrower, to
recover such amount from such Borrower.
8.12. Holders of Notes. The Agent may deem and treat
the Bank which is payee of a Note as the owner and holder of such
Note for all purposes hereof unless and until an Assignment
Supplement with respect to the assignment or transfer thereof
shall have been filed with the Agent in accordance with Section
9.14 hereof. Any authority, direction or consent of any Person
who at the time of giving such authority, direction or consent is
shown in the Register as being a Bank shall be conclusive and
binding on each present and subsequent holder, transferee or
assignee of any Note or Notes payable to such Bank or of any Note
or Notes issued in exchange therefor.
8.13. Agent's Fee. The Company agrees to pay to the
Agent, for its individual account, a nonrefundable Agent's fee in
an amount and at such time or times as the Agent and the Company
have heretofore agreed by letter from the Agent to the Company
dated March 1, 1995.
8.14. Funding by Agent. Unless the Agent shall have
been notified in writing by any Bank not later than (1) in the
case of Euro-Rate Loans, the close of business on the day before
the day on which such Loans are requested by a Borrower to be made
or (2) in the case of Base Rate Loans, 1:00 p.m. on the date such
loans are requested by a Borrower to be made, that such Bank will
not make its Pro Rata share of such Loans, the Agent may assume
that such Bank will make its Pro Rata share of the Loans, and in
reliance upon such assumption the Agent may (but in no
circumstances shall be required to) make available to such
Borrower a corresponding amount. If and to the extent that any
Bank fails to make such payment to the Agent on such date, such
Bank shall pay such amount on demand (or, if such Bank fails to
pay such amount on demand, such Borrower shall pay such amount on
demand) (such obligations of such Bank and such Borrower being
several and not joint), together with interest, for the Agent's
own account, for each day until repayment to the Agent from and
including the date of the Agent's payment and to and including the
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date which is two days thereafter at the Federal Funds Effective
Rate for each such day, and for each day thereafter (before and
after judgment) at the rate or rates per annum applicable to such
Loans. All payments to the Agent under this Section shall be made
to the Agent at its Office in Dollars in funds immediately
available at such Office, without set-off, withholding,
counterclaim or other deduction of any nature.
8.15. The Co-Agents. None of the Banks identified
herein as a "Co-Agent" shall have any right, power, obligation,
liability, responsibility or duty under the Loan Documents other
than those applicable to all Banks as such. Each Bank
acknowledges that it has not relied, and will not rely, upon any
of the Banks so identifited in deciding to enter into this
Agreement or in taking or not taking any action hereunder.
ARTICLE IX
MISCELLANEOUS
9.01. Holidays. Unless specifically otherwise provided
herein or therein, whenever any payment or action to be made or
taken under any Loan Document shall be stated to be due on a day
which is not a Business Day, such payment or action shall be made
or taken on the next following Business Day, and such extension of
time shall be included in computing interest or fees, if any, in
connection with such payment or action.
9.02. Records. The unpaid principal amount of the
Loans owing to each Bank, the unpaid interest accrued thereon, the
interest rate or rates applicable to such unpaid principal amount,
the duration of such applicability, each Bank's Current
Commitment, and the accrued and unpaid Facility Fees and
Utilization Fees shall at all times be ascertained from the
records of the Agent, which shall be conclusive absent manifest
error.
9.03. Amendments and Waivers. Neither this Agreement
nor any other Loan Document may be amended, modified or
supplemented except in accordance with the provisions of this
Section. Subject to the consent of the requisite Banks as
hereinafter provided, the Agent and the Borrower or Borrowers
party thereto may from time to time amend, modify or supplement
the provisions of this Agreement or any other Loan Document for
the purpose of amending, adding to, or waiving any provisions, or
changing in any manner the rights and duties of either or both of
the Borrowers, the Agent or any Bank. Any such amendment,
modification or supplement made by the Borrower(s) and the Agent
in accordance with the provisions of this Section shall be binding
upon each Borrower, each Bank and the Agent. The Agent shall
enter into such amendments, modifications or supplements from time
to time as directed by the Required Banks, and only as so
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directed, provided, that no such amendment, modification or
supplement may be made which will:
(a) Increase the Commitment of any Bank over the amount
thereof then in effect, extend any Maturity Date or extend
the Expiration Date other than as provided in Section 2.02,
amend Section 2.02, or amend or waive any of the provisions
of Section 4.01, Section 4.02(b) or Section 4.02(c), in each
case without the written consent of each Bank affected
thereby;
(b) Reduce the principal amount of or extend the time
for any scheduled payment of principal of any Loan, or reduce
the rate or amount of interest or extend the time for payment
of interest borne by any Loan or extend the time for payment
of or reduce the amount of any Facility Fee or Utilization
Fee or reduce or postpone the date for payment of any other
fees, expenses, indemnities or amounts payable under any Loan
Document, without the written consent of each Bank affected
thereby;
(c) Change the definition of "Required Banks" or "Pro
Rata," release the obligations of the Company under the
Guaranty or amend the Guaranty so as to reduce such
obligations, amend Section 2.01 so as to increase the Total
Commitment or amend Section 2.10(a), Section 9.13, Section
9.14(a) or this Section 9.03, without the written consent of
all the Banks; or
(d) Amend or waive any of the provisions of Article
VIII hereof, or impose additional duties upon the Agent or
otherwise adversely affect the rights, interests or
obligations of the Agent, without the written consent of the
Agent;
and provided further, that Assignment Supplements may be entered
into in the manner provided in Section 9.14 hereof. Any such
amendment, modification, supplement or waiver must be in writing
and shall be effective only to the extent set forth in such
writing. Any Event of Default or Potential Default waived or
consented to in any such amendment, modification or supplement
shall be deemed to be cured and not continuing to the extent and
for the period set forth in such waiver or consent, but no such
waiver or consent shall extend to any other or subsequent Event of
Default or Potential Default or impair any right consequent
thereto.
9.04. No Implied Waiver; Cumulative Remedies. No
course of dealing and no delay or failure of the Agent or any Bank
in exercising any right, power or privilege under this Agreement
or any other Loan Document shall affect any other or future
exercise thereof or the exercise of any other right, power or
privilege; nor shall any single or partial exercise of any such
right, power or privilege or any abandonment or discontinuance of
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steps to enforce such a right, power or privilege preclude any
further exercise thereof or of any other right, power or
privilege. The rights and remedies of the Agent and the Banks
under this Agreement and any other Loan Document are cumulative
and not exclusive of any rights or remedies which the Agent or any
Bank would otherwise have hereunder or thereunder, at Law, in
equity or otherwise.
9.05. Notices.
(a) Except to the extent otherwise expressly permitted
hereunder or thereunder, all notices, requests, demands,
directions and other communications (collectively "Notices") under
this Agreement or any Loan Document shall be in writing (including
telexed and telecopied communication) and shall be sent by first
class mail, or by nationally recognized overnight courier, or by
telex or telecopier (with confirmation in writing mailed first
class or sent by such an overnight courier), or by personal
delivery. All notices shall be sent to the applicable party at
the address stated on the signature pages hereof or in accordance
with the last unrevoked written direction from such party to the
other parties hereto, in all cases with postage or other charges
prepaid. Any such properly given notice to the Agent or any Bank
shall be effective when received. Any such properly given notice
to a Borrower shall be effective on the earliest to occur of
receipt, telephone confirmation of receipt of telex or telecopy
communication, one Business Day after delivery to a nationally
recognized overnight courier, or three Business Days after deposit
in the mail.
(b) Any Bank giving any notice to a Borrower or any
other party hereto shall simultaneously send a copy thereof to the
Agent, and the Agent shall promptly notify the other Banks of the
receipt by it of any such notice.
(c) The Agent and each Bank may rely on any notice
(whether or not such notice is made in a manner permitted or
required by this Agreement or any other Loan Document) purportedly
made by or on behalf of either Borrower, and neither the Agent nor
any Bank shall have any duty to verify the identity or authority
of any Person giving such notice.
9.06. Expenses; Taxes; Indemnity.
(a) The Company agrees to pay or cause to be paid and
to save the Agent and each of the Banks harmless against liability
for the payment of all reasonable out-of-pocket costs and expenses
(including but not limited to reasonable fees and expenses of
counsel, including internal counsel for the Agent or any Bank,
local counsel, auditors, consulting engineers, appraisers, and all
other professional, accounting, evaluation and consulting costs)
incurred by the Agent or any Bank from time to time arising from
or relating to (i) any requested amendments, modifications,
supplements, waivers or consents (whether or not ultimately
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entered into or granted) to this Agreement or any Loan Document,
and (ii) the enforcement or preservation of rights under this
Agreement or any Loan Document (including but not limited to any
such costs or expenses arising from or relating to collection or
enforcement of an outstanding Loan or any other amount owing
hereunder or thereunder by the Agent or any Bank, and any
litigation, proceeding (including any bankruptcy or receivership
proceeding), dispute, work-out, restructuring or rescheduling
related in any way to this Agreement or the Loan Documents).
(b) The Company hereby agrees to pay all stamp,
document, transfer, recording, filing, registration, search, sales
and excise fees and taxes and all similar impositions now or
hereafter determined by the Agent or any Banks to be payable in
connection with this Agreement or any other Loan Documents or any
other documents, instruments or transactions pursuant to or in
connection herewith or therewith, and the Company agrees to save
the Agent and each Bank harmless from and against any and all
present or future claims, liabilities or losses with respect to or
resulting from any omission to pay or delay in paying any such
fees, taxes or impositions.
(c) The Company hereby agrees to reimburse and
indemnify each of the Agent, the Banks, and their respective
Affiliates, officers, directors, employees, attorneys and agents
(the "Indemnified Parties") from and against any and all losses,
liabilities, claims, damages, expenses, obligations, penalties,
actions, judgments, suits, costs or disbursements of any kind or
nature whatsoever (including, without limitation, the reasonable
fees and disbursements of counsel for such Indemnified Party,
including internal counsel, in connection with any investigative,
administrative or judicial proceeding commenced or threatened,
whether or not such Indemnified Party shall be designated a party
thereto) that may at any time be imposed on, asserted against or
incurred by such Indemnified Party as a result of, or arising out
of, or in any way related to or by reason of, this Agreement or
any transaction from time to time contemplated hereby or any
transaction financed in whole or in part or directly or indirectly
with the proceeds of any Loan and (without in any way limiting the
generality of the foregoing) including any violation or breach of
any Environmental Law or any other Law by the Company or any
Subsidiary of the Company or any Environmental Affiliate of any of
them; any Environmental Claim arising out of the management, use,
control, ownership or operation of property by any of such
Persons, including all on-site and off-site activities involving
Environmental Concern Materials; or any exercise by the Agent or
any Bank of any of its rights or remedies under this Agreement;
but excluding any such losses, liabilities, claims, damages,
expenses, obligations, penalties, actions, judgments, suits, costs
or disbursements resulting solely from the negligence or willful
misconduct of such Indemnified Party, as finally determined by a
court of competent jurisdiction. If and to the extent that the
foregoing obligations of the Company under this subsection (c) or
any other indemnification obligation of the Company hereunder are
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unenforceable for any reason, the Company hereby agrees to make
the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable Law.
9.07. Severability. The provisions of the Loan
Documents are intended to be severable. If any provision of any
Loan Document shall be held invalid or unenforceable in whole or
in part in any jurisdiction, such provision shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining
provisions of such Loan Document in any jurisdiction.
9.08. Prior Understandings. This Agreement and the
other Loan Documents supersede all prior and contemporaneous
understandings and agreements, whether written or oral, among the
parties hereto relating to the transactions provided for herein
and therein.
9.09. Duration; Survival. All representations and
warranties contained herein or in any other Loan Document or made
in connection herewith or therewith shall survive the making of,
and shall not be waived by the execution and delivery of, this
Agreement or any other Loan Document, any investigation by or
knowledge of the Agent or any Bank, the making of any Loan, or any
other event or condition whatever. All covenants and agreements
contained herein or in any other Loan Document shall continue in
full force and effect from and after the date hereof so long as
the Borrowers may borrow hereunder and until payment in full of
all obligations of the Borrowers hereunder and thereunder.
Without limitation, all obligations of the Borrowers hereunder or
under any other Loan Document to make payments to or indemnify the
Agent or any Bank shall survive the payment in full of all other
obligations hereunder and thereunder, termination of the
Borrowers' right to borrow hereunder, and all other events and
conditions whatever. In addition, all obligations of each Bank to
make payments to or indemnify the Agent shall survive payment in
full by the Borrowers of all said obligations, termination of the
Borrowers' right to borrow hereunder, and all other events and
conditions whatever.
9.10. Counterparts. This Agreement and the Guaranty
Agreement may be executed in any number of counterparts, and by
the different parties hereto and thereto on separate counterparts,
each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same
instrument.
9.11. Limitation on Payments. The parties hereto
intend to conform to all applicable Laws in effect from time to
time limiting the maximum rate of interest that may be charged or
collected. Accordingly, notwithstanding any other provision
hereof or of any other Loan Document, the Borrowers shall not be
required to make any payment to or for the account of any Bank,
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and each Bank shall refund any payment made by a Borrower, to the
extent that such requirement or such failure to refund would
violate or conflict with nonwaivable provisions of applicable Laws
limiting the maximum amount of interest which may be charged or
collected by such Bank.
9.12. Set-Off. Each Borrower hereby agrees that, to
the fullest extent permitted by Law, if an Event of Default or
Potential Default shall have occurred and be continuing or shall
exist and if any obligation of such Borrower hereunder or under
any other Loan Document shall be due and payable (on a Maturity
Date, Expiration Date, by acceleration or otherwise), each Bank
shall have the right, without notice to such Borrower, to set off
against and to appropriate and apply to such obligation any
Indebtedness, liability or obligation of any nature owing to such
Borrower by such Bank, including but not limited to all deposits
(whether time or demand, general or special, provisionally
credited or finally credited, whether or not evidenced by a
certificate of deposit) now or hereafter maintained by such
Borrower with such Bank. Such right shall be absolute and
unconditional in all circumstances and, without limitation, shall
exist whether or not such Bank or any other Person shall have
given notice or made any demand to such Borrower or any other
Person, whether such Indebtedness, obligation or liability owed to
such Borrower is contingent, absolute, matured or unmatured (it
being agreed that such Bank may deem such Indebtedness, obligation
or liability to be then due and payable at the time of such set-
off), and regardless of the existence or adequacy of any
collateral, guaranty or any other security, right or remedy
available to any Bank or any other Person. Each Borrower hereby
agrees that, to the fullest extent permitted by Law, any
Participant and any branch, Subsidiary or Affiliate of any Bank or
any Participant shall have the same rights of set-off as a Bank as
provided in this Section (regardless of whether such Participant,
branch, Subsidiary or Affiliate would otherwise be deemed in
privity with or a direct creditor of such Borrower). The rights
provided by this Section are in addition to all other rights of
set-off and banker's lien and all other rights and remedies which
any Bank (or any such Participant, branch, Subsidiary or
Affiliate) may otherwise have under this Agreement or any other
Loan Document, at Law or in equity, or otherwise, and nothing in
this Agreement or any other Loan Document shall be deemed a waiver
or prohibition of or restriction on the rights of set-off or
banker's lien of any such Person.
9.13. Sharing of Collections. The Banks hereby agree
among themselves that if any Bank shall receive (by voluntary
payment, realization upon security, set-off or from any other
source) any amount on account of the Loans, interest thereon, or
any other obligation contemplated by this Agreement or another
Loan Document to be made by a Borrower Pro Rata to all Banks in
greater proportion than any such amount received by any other
Bank, then the Bank receiving such proportionately greater payment
shall notify each other Bank and the Agent of such receipt, and
-72-<PAGE>
equitable adjustment will be made in the manner stated in this
Section so that, in effect, all such excess amounts will be shared
ratably among all of the Banks. The Banks receiving such excess
amount shall purchase (which it shall be deemed to have done
simultaneously upon the receipt of such excess amount) for cash
from the other Banks a participation in the applicable obligations
owed to such other Banks in such amount as shall result in a
ratable sharing by all Banks of such excess amount (and to such
extent the receiving Bank shall be a Participant). If all or any
portion of such excess amount is thereafter recovered from the
Bank making such purchase, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery,
together with interest or other similar amounts, if any, required
by Law to be paid by the Bank making such purchase. The Borrowers
hereby consent to and confirm the foregoing arrangements. Each
Participant shall be bound by this Section as fully as if it were
a Bank hereunder.
9.14. Successors and Assigns; Participations;
Assignments.
(a) Successors and Assigns. This Agreement and the
other Loan Documents shall be binding upon and inure to the
benefit of the Borrowers, the Banks, all future holders of the
Notes, the Agent and their respective successors and assigns,
except that the Borrowers may not assign or transfer any of their
rights or obligations hereunder or thereunder or interests herein
or therein without the prior written consent of all the Banks and
the Agent, and any purported assignment without such consent shall
be void.
(b) Participations. Any Bank may, in the ordinary
course of its business and in accordance with applicable Law, at
any time sell participations to one or more commercial banks or
other Persons (each a "Participant") in all or a portion of its
rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, all or a portion of its
Commitment and the Loans owing to it and any Note held by it);
provided, that
(i) any such Bank's obligations under this Agreement
shall remain unchanged,
(ii) such Bank shall remain solely responsible to the
other parties hereto for the performance of such obligations,
(iii) the parties hereto shall continue to deal solely
and directly with such Bank in connection with such Bank's
rights and obligations under this Agreement and the other
Loan Documents, and
(iv) such Participant shall be bound by the provisions
of Section 9.13 hereof.
-73-<PAGE>
The Borrowers agree that any such Participant shall be entitled to
the benefits of Sections 2.11, 2.12 and 9.06 with respect to its
participation in the Commitments and the Loans outstanding from
time to time; provided, that no such Participant shall be entitled
to receive any greater amount pursuant to such Sections than the
transferor Bank would have been entitled to receive in respect of
the amount of the participation transferred to such Participant
had no such transfer occurred.
(c) Assignments. Any Bank may, in the ordinary course
of its business and in accordance with applicable Law, at any time
assign all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including, without
limitation, all or any portion of its Commitment and Loans owing
to it and any Note held by it) to any Bank, any Affiliate of a
Bank or to one or more additional commercial banks or other
Persons (each a "Purchasing Bank"); provided, that
(i) any such assignment to a Purchasing Bank which is
not a Bank or an Affiliate of a Bank shall be made only with
the consent of the Company and the Agent (which in each case
shall not be unreasonably withheld or delayed), provided,
however, that the consent of the Company required by this
Subsection (i) of Section 9.14(c) shall not be required at
any time during the occurrence, continuance, or existence of
an Event of Default or Potential Default,
(ii) if a Bank makes such an assignment of less than
all of its then remaining rights and obligations under this
Agreement and the other Loan Documents, such transferor Bank
shall retain, after such assignment, a minimum principal
amount of $5,000,000 of its Commitment and Loans then
outstanding, and such assignment shall be in a minimum
aggregate principal amount of $2,500,000 of the Commitments
and Loans then outstanding,
(iii) each such assignment shall be of a constant, and
not a varying, percentage of the Commitment of the transferor
Bank and of all of the transferor Bank's rights and
obligations under this Agreement and the other Loan
Documents, and
(iv) each such assignment shall be made pursuant to an
Assignment Supplement in substantially the form of Exhibit E
to this Agreement, duly completed (an "Assignment
Supplement").
In order to effect any such assignment, the transferor Bank and
the Purchasing Bank shall execute and deliver to the Agent a duly
completed Assignment Supplement (which shall be signed on behalf
of the Purchasing Bank and the transferor Bank and shall include
the effective date of such assignment (the "Assignment Effective
Date"), the portion of the Commitment and Loans being assigned,
the name, address and payment and notice instructions of the
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Purchasing Bank and the consents required in Clause (i) above),
together with any Notes subject to such assignment and a
processing and recording fee of $2,000; and, upon receipt thereof,
the Agent shall accept such Assignment Supplement. Upon receipt
of the Purchase Price Receipt Notice pursuant to such Assignment
Supplement, the Agent shall record such acceptance in the
Register. Upon such execution, delivery, acceptance and
recording, from and after the Assignment Effective Date specified
in such Assignment Supplement
(x) the Purchasing Bank shall be a party hereto and, to
the extent provided in such Assignment Supplement, shall have
the rights and obligations of a Bank hereunder, and
(y) the transferor Bank thereunder shall be released
from its obligations under this Agreement to the extent so
transferred (and, in the case of an Assignment Supplement
covering all or the remaining portion of a transferor Bank's
rights and obligations under this Agreement, such transferor
Bank shall cease to be a party to this Agreement) from and
after the Assignment Effective Date.
On or prior to the Assignment Effective Date specified in an
Assignment Supplement, the Borrowers, at their expense, shall
execute and deliver to the Agent (for delivery to the Purchasing
Bank) new Notes evidencing such Purchasing Bank's assigned
Commitment or Loans and (for delivery to the transferor Bank)
replacement Notes in the principal amount of the Loans or
Commitment retained by the transferor Bank (such Notes to be in
exchange for, but not in payment of, those Notes then held by such
transferor Bank). Each such replacement Note shall be dated the
date and be substantially in the form of the predecessor Note.
The Agent shall mark the predecessor Notes "exchanged" and deliver
them to the Company. Accrued interest and accrued fees shall be
paid to the Purchasing Bank at the same time or times provided in
the predecessor Notes and this Agreement.
(d) Register. The Agent shall maintain at its Office a
copy of each Assignment Supplement delivered to it and a register
(the "Register") for the recordation of the names and addresses of
the Banks and the Commitment of, and principal amount of the Loans
owing to, each Bank from time to time. The entries in the
Register shall be conclusive (absent manifest error), and the
Borrowers, the Agent and the Banks may treat each Person whose
name is recorded in the Register as a Bank hereunder for all
purposes of the Agreement. The Register shall be available for
inspection by the Borrowers or any Bank at any reasonable time and
from time to time upon reasonable prior notice.
(e) Financial and Other Information. Subject to the
provisions of the second sentence of this Section 9.14(e), the
Borrowers authorize the Agent and each Bank to disclose to any
Participant or Purchasing Bank (each, a "transferee") and any
prospective transferee any and all financial and other information
-75-<PAGE>
in the possession of the Agent or such Bank, as the case may be,
concerning the Company and its Subsidiaries and Affiliates which
has been or may be delivered to such Person by or on behalf of the
Borrowers in connection with this Agreement or the Agent's or such
Bank's credit evaluation of the Borrowers and their respective
Subsidiaries and Affiliates. Each Bank and the Agent agrees (on
behalf of itself and each of its Affiliates, directors, officers,
employees and representatives) to use reasonable precautions to
keep confidential, in accordance with their customary procedures
for handling confidential information of this nature and in
accordance with safe and sound banking practices, any non-public
information supplied to it by the Borrowers pursuant to this
Agreement, provided that nothing herein shall limit the disclosure
of any such information (i) to the extent required by statute,
rule, regulation or judicial process, (ii) to counsel for any of
the Banks or the Agent, (iii) to bank examiners, auditors or
accountants, (iv) to the Agent or any other Bank, (v) in
connection with any litigation to which any one or more of the
Banks is a party or (vi) to any assignee or Participant (or
prospective assignee or Participant) so long as such assignee or
Participant (or prospective assignee or Participant) first
executes and delivers to the respective Bank a confidentiality
agreement in such form and substance as is customary in
transactions of this type and consistent with this Section;
provided, further, that, unless specifically prohibited by
applicable law or court order, each Bank shall, prior to
disclosure thereof, notify the Company of any request for
disclosure of any such non-public information (x) by any
governmental agency or representative thereof (other than any such
request in connection with an examination of the financial
condition of such Bank by such governmental agency) or
(y) pursuant to legal process; and provided, finally, that in no
event shall any Bank or the Agent be obligated or required to
return any materials furnished by the Borrowers. Each Bank agrees
that it will not use any non-public information supplied to it by
the Borrowers pursuant to this Agreement for any purpose unrelated
to this Agreement and the Loans. At the request of any Bank, the
Company, at its expense, shall provide to each prospective
transferee the conformed copies of documents referred to in
Section 4 of the form of Assignment Supplement.
(f) Assignments to Federal Reserve Bank.
Notwithstanding any other provision contained herein, any Bank may
at any time assign all or any portion of its rights under this
Agreement, including without limitation any Loans owing to it, and
any Note held by it to a Federal Reserve Bank. No such assignment
shall relieve the transferor Bank from its obligations hereunder.
9.15. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial; Limitation of Liability.
(a) Governing Law. THIS AGREEMENT AND ALL OTHER LOAN
DOCUMENTS SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN
-76-<PAGE>
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA,
WITHOUT REGARD TO CHOICE OF LAW PRINCIPLES.
(b) Certain Waivers. EACH BORROWER HEREBY IRREVOCABLY
AND UNCONDITIONALLY:
(i) AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY
PERSON ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT,
OMISSION, OR EVENT OCCURRING IN CONNECTION HEREWITH OR
THEREWITH (COLLECTIVELY, "RELATED LITIGATION") MAY BE BROUGHT
IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
SITTING IN ALLEGHENY COUNTY, PENNSYLVANIA, AND SUBMITS TO THE
JURISDICTION OF SUCH COURTS (BUT NOTHING HEREIN SHALL AFFECT
THE RIGHT OF THE AGENT OR ANY BANK TO BRING ANY ACTION, SUIT
OR PROCEEDING IN ANY OTHER FORUM);
(ii) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME
TO THE LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT IN
ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY SUCH RELATED
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, AND
WAIVES ANY RIGHT TO OBJECT, WITH RESPECT TO ANY RELATED
LITIGATION BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES
NOT HAVE JURISDICTION OVER SUCH BORROWER;
(iii) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY
REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO SUCH
BORROWER AT THE ADDRESS FOR NOTICES DESCRIBED IN SECTION 9.05
HEREOF (TO THE ATTENTION OF "GENERAL COUNSEL"), AND CONSENTS
AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY
RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL
AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY
OTHER MANNER PERMITTED BY LAW); AND
(iv) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED
LITIGATION.
(c) Limitation of Liability. TO THE FULLEST EXTENT
PERMITTED BY LAW, NO CLAIM MAY BE MADE BY EITHER BORROWER AGAINST
THE AGENT, ANY BANK OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE,
ATTORNEY OR AGENT OF ANY OF THEM FOR ANY SPECIAL, INCIDENTAL,
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY
CLAIM ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR
EVENT OCCURRING IN CONNECTION HEREWITH OR THEREWITH (WHETHER FOR
BREACH OF CONTRACT, TORT OR ANY OTHER THEORY OF LIABILITY). EACH
BORROWER HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY
CLAIM FOR ANY SUCH DAMAGES, WHETHER SUCH CLAIM PRESENTLY EXISTS OR
-76A-<PAGE>
ARISES HEREAFTER AND WHETHER OR NOT SUCH CLAIM IS KNOWN OR
SUSPECTED TO EXIST IN ITS FAVOR.
IN WITNESS WHEREOF, the parties hereto, by their
officers thereunto duly authorized, have executed and delivered
this Agreement as of the date first above written.
ADVANTA CORP.
By:
(Signature)
Name: David D. Wesselink
Title: Senior Vice President &
Chief Financial Officer
Address for Notices:
300 Welsh Road, Building 4
Horsham, PA 19044
Attention: Mike Nixon
Telephone: (215) 784-5315
Telecopier: (215) 657-0504
With Copy To:
300 Welsh Road, Building 5
Horsham, PA 19044
Attention: Gene S. Schneyer
Telephone: (215) 784-5343
Telecopier: (215) 784-5350
ADVANTA NATIONAL BANK
By:
(Signature)
Name: Jeffrey D. Beck
Title: Senior Vice President
and Treasurer
Address for Notices:
501 Carr Road
Wilmington, DE 19809
Attention: Ronald V. Samuels
Telephone: (302) 791-4400
Telecopier: (302) 791-6540
-77-<PAGE>
MELLON BANK, N.A., individually and
as Agent
By:
(Signature)
Name:
Title:
Address for Notices:
One Mellon Bank Center, Room 350
Pittsburgh, PA 15158-0001
Attention: Henry J. Voorhees
Vice President
Telephone: (412) 234-2905
Telecopier: (412) 234-8087
THE CHASE MANHATTAN BANK, N.A.
By:
(Signature)
Name:
Title:
Address for Notices:
1 Chase Plaza, 5th Floor
New York, NY 10081
Attention: Joan Garvin
Telephone: (212) 552-2722
Telecopier: (212) 552-1372
CHEMICAL BANK
By:
(Signature)
Name:
Title:
-78-<PAGE>
Address for Notices:
270 Park Avenue
New York, NY 10017
Attention: George C. Johnson
Vice President
Telephone: (212) 270-4133
Telecopier: (212) 270-1789
NATIONSBANK OF TEXAS, N.A.
By:
(Signature)
Name:
Title:
Address for Notices:
901 Main Street, STE. 6600
Dallas, TX 75201
Attention: Patrick K. Doyle
Telephone: (214) 508-0569
Telecopier: (214) 508-0604
PNC BANK, NATIONAL ASSOCIATION
By:
(Signature)
Name:
Title:
Address for Notices:
Land Title Building
13th Floor
Philadelphia, PA 19110
Attention: Karen L. Voight
Telephone: (215) 585-5224
Telecopier: (215) 585-7615
-79-<PAGE>
SWISS BANK CORPORATION,
NEW YORK BRANCH
By:
(Signature)
Name:
Title:
By:
(Signature)
Name:
Title:
Address for Notices:
Swiss Bank Corp., New York Branch
222 Broadway, 4th Floor
New York, NY 10038
Attention: Susan N. Isquith
Director
Telephone: (212) 574-4120
Telecopier: (212) 574-4131
CIBC INC.
By:
(Signature)
Name:
Title:
Address for Notices:
425 Lexington Ave.
8th Floor
New York, NY 10017
Attention: Lu Ann Bowers
Telephone: (212) 856-3638
Telecopier: (212) 856-3613
THE FIRST NATIONAL BANK OF CHICAGO
By:
(Signature)
Name:
Title:
-80-<PAGE>
Address for Notices:
One First National Plaza
Suite 0084
Chicago, IL 60670
Attention: William Artz
Telephone: (312) 732-2714
Telecopier: (312) 732-5296
SHAWMUT BANK CONNECTICUT, N.A.
By:
(Signature)
Name:
Title:
Address for Notices:
777 Main Street, MSN 397
Hartford, CT 06115
Attention: Philip S. Walker, Jr.
Telephone: (203) 986-5366
Telecopier: (203) 986-5367/4621
THE BANK OF NEW YORK
By:
(Signature)
Name:
Title:
Address for Notices:
Financial Institutions Division
One Wall Street, 17th Floor
New York, NY 10286
Attention: Deborah J. Graziano
Telephone: (212) 635-6477
Telecopier: (212) 809-9520
Telex: 420268/BONY UT
-81-<PAGE>
THE BANK OF TOKYO TRUST COMPANY
By:
(Signature)
Name:
Title:
Address for Notices:
1251 Avenue of the Americas
12th Floor
New York, NY 10116-3138
Attention: Mr. Mark Marron
Vice President
Telephone: (212) 782-4337
Telecopier: (212) 782-6445
COMMERZBANK AG, NEW YORK BRANCH
By:
(Signature)
Name:
Title:
Address for Notices:
2 World Financial Center
New York, NY 10281-1050
Attention: Juergen Schmieding
Telephone: (212) 266-7401
Telecopier: (212) 266-7235
Telex: 667-488/CBK UW
CAISSE NATIONALE de CREDIT
AGRICOLE
By:
(Signature)
Name:
Title:
-82-<PAGE>
Address for Notices:
55 East Monroe, Suite 4700
Chicago, IL 60603-5702
Attention: Kathleen May
Telephone: (312) 917-7444
Telecopier: (312) 372-3445
Telex/Answerback: 190063/AGRICO UT
DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES
By:
(Signature)
Name:
Title:
By:
(Signature)
Name:
Title:
Address for Notices:
31 West 52nd Street
New York, NY 10019
Attention: Christopher
de Chabert
Telephone: (212) 474-8667
Telecopier: (212) 474-8108
DRESDNER BANK AG, NEW YORK AND GRAND
CAYMAN BRANCHES
By:
(Signature)
Name:
Title:
-83-<PAGE>
Address for Notices:
Corporate Banking
75 Wall Street
New York, NY 10005-2889
Attention: Robert Grella
Vice President
Telephone: (212) 574-0252
Telecopier: (212) 574-0130
Telex: 824-151 or 421-750
FIRST HAWAIIAN BANK
By:
(Signature)
Name:
Title:
Address for Notices:
Corporate Banking Division
1132 Bishop Street, 19th Floor
Honolulu, HI 96813
Attention: Robert M. Wheeler, III
Vice President
Telephone: (808) 525-6367
Telecopier: (808) 525-6372
Telex/Answerback: 7238329/FRST HR
FIRST INTERSTATE BANK OF CALIFORNIA
By:
(Signature)
Name:
Title:
Address for Notices:
707 Wilshire, W-16
Los Angeles, CA 90017
Attention: Patrick McCormick
Telephone: (213) 614-4933
Telecopier: (213) 614-2569
-84-<PAGE>
HARRIS TRUST AND SAVINGS BANK
By:
(Signature)
Name:
Title:
Address for Notices:
111 W. Monroe
Chicago, IL 60690
Attention: Patrick A. Horne
Telephone: (312) 461-7514
Telecopier: (312) 765-8353
LLOYDS BANK PLC
By:
(Signature)
Name:
Title:
Address for Notices:
199 Water Street
New York, NY 10038
Attention: Windsor Davies
Vice President and
Manager or
Anastasia
Micklethwaite
Executive Officer
Telephone: (212) 607-4970/4949
Telecopier: (212) 607-4999/4683
MERIDIAN BANK
By:
(Signature)
Name:
Title:
-85-<PAGE>
Address for Notices:
1650 Market Street, Suite 3600
One Liberty Place
Philadelphia, PA 19103
Attention: Mr. John Fessick OL3620
Telephone: (215) 854-3136
Telecopier: (215) 854-3774
MORGAN GUARANTY TRUST COMPANY OF NEW
YORK
By:
(Signature)
Name:
Title:
Address for Notices:
60 Wall Street
New York, NY 10260-0060
Attention: Richard J. Herder
Vice President
Telephone: (212) 648-6790
Telecopier: (212)648-5548/5249
Telex: 177615/MGT UT or
620106/MGT UW
UNION BANK
By:
(Signature)
Name:
Title:
Address for Notices:
350 California Street
11th Floor
San Francisco, CA 94104
Attention: Rick Hanson
Telephone: (415) 705-7062
Telecopier: (415) 705-7037
Telex: 188316
-86-<PAGE>
BANK OF AMERICA ILLINOIS
By:
(Signature)
Name:
Title:
Address for Notices:
231 South LaSalle Street
Mail Code #1030
Chicago, Illinois 60697
Attention: Sharon Ephraim
Telephone: (312) 828-3338
Telecopier: (312) 828-1997
THE BANK OF CALIFORNIA, N.A.
By:
(Signature)
Name:
Title:
Address for Notices:
400 California Street
17th Floor
San Francisco, CA 94104
Attention: Alison A. Mason
Telephone: (415) 765-2781
Telecopier: (415) 765-3146
CREDIT SUISSE
By:
(Signature)
Name:
Title:
Address for Notices:
12 E. 49th Street
New York, NY 10017
Attention: Elizabeth Lee
-87-<PAGE>
Telephone: (212) 238-5304
Telecopier: (212) 238-5074
Telex: 420-149
THE DAI-ICHI KANGYO BANK, LTD.,
NEW YORK BRANCH
By:
(Signature)
Name:
Title:
Address for Notices:
One World Trade Center
48th Floor
New York, NY 10048
Attention: Ms. Stephanie
Rogers
Telephone: (212) 432-6648
Telecopier: (212) 488-8955
THE FIRST NATIONAL BANK OF MARYLAND
By:
(Signature)
Name:
Title:
Address for Notices:
Mail Code: 101-745
National Division
25 S. Charles Street, 18th Floor
P.O. Box 1596
Baltimore, MD 21203
Attention: Mary Beth Eikenberg
Telephone: (410) 244-4203
Telecopier: (410) 244-4294
-88-<PAGE>
LASALLE NATIONAL BANK
By:
(Signature)
Name:
Title:
Address for Notices:
120 South LaSalle Street
Suite 415
Chicago, IL 60603
Attention: John R. Swift
Sr. Vice President
or David C. Schmidt
Commercial Lending
Officer
Telephone: (312) 904-7460/7632
Telecopier: (312) 904-6382
Telex: 190393
THE NORTHERN TRUST COMPANY
By:
(Signature)
Name:
Title:
Address for Notices:
50 S. LaSalle Street
Chicago, IL 60675
Attention: David L. Love
Telephone: (312) 630-1885
Telecopier: (312) 444-3508
UNION BANK OF SWITZERLAND
By:
(Signature)
Name:
Title:
-89-<PAGE>
Address for Notices:
299 Park Avenue, 41st Floor
New York, NY 10171
Attention: Robert J. Verna
Vice President
Telephone: (212) 821-3570
Telecopier: (212) 821-4541
Telex: 620317/UBS
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK AND CAYMAN
ISLANDS BRANCHES
By:
(Signature)
Name:
Title:
By:
(Signature)
Name:
Title:
Address for Notices:
1211 Avenue of the Americas
New York, NY 10036
Attention: Lillian Tung Lum
Vice President
Telephone: (212) 852-6046
Telecopier: (212) 852-6140
THE YASUDA TRUST & BANKING COMPANY,
LIMITED
By:
(Signature)
Name:
Title:
-90-<PAGE>
Address for Notices:
666 Fifth Avenue, Suite 801
New York, NY 10103
Attention: Gerald Gill
Vice President
Telephone: (212) 373-5721
Telecopier: (212) 373-5796
Telex: 232941/YTBC UR
-91-<PAGE>
Exhibit A to
Revolving Credit Agreement
ADVANTA CORP.
Promissory Note
$ Pittsburgh, Pennsylvania
May 4, 1995
FOR VALUE RECEIVED, the undersigned ADVANTA CORP., a
Delaware corporation (the "Company"), hereby promises to pay to
the order of (the "Bank"), on or before the
Expiration Date, and at such earlier dates as may be required by
the Agreement (as defined below), the lesser of (i) the principal
sum of Dollars ($ ) or (ii) the
aggregate unpaid principal amount of all Loans made by the Bank to
the Company from time to time pursuant to the Agreement. The
Company further promises to pay to the order of the Bank interest
on the unpaid principal amount hereof from time to time
outstanding at the rate or rates per annum determined pursuant to
Section 2.07 of, or as otherwise provided in, the Agreement,
payable on the dates set forth in Section 2.09 of, or as otherwise
provided in, the Agreement.
This Promissory Note is one of the Notes referred to in
the Revolving Credit Agreement dated as of May 4, 1995, among the
Company and Advanta National Bank, as Borrowers, the Banks parties
thereto from time to time and Mellon Bank, N.A., as Agent for the
Banks (as the same may from time to time be amended, modified or
supplemented, the "Agreement"), which Agreement, among other
things, contains provisions for prepayments on account of
principal hereof prior to the maturity hereof and also for
acceleration of the maturity hereof upon the happening of certain
stated events, upon the terms and conditions therein specified.
Terms defined in the Agreement shall have the same meanings
herein.
The Company hereby expressly waives presentment, demand,
protest, and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this
Promissory Note and the Agreement, and an action for amounts due
hereunder or thereunder shall immediately accrue.
This Promissory Note shall be governed by, and construed
and enforced in accordance with, the laws of the Commonwealth of
Pennsylvania.
ADVANTA CORP.
By:
(Signature)
Name:
Title:
A-1<PAGE>
Exhibit B to
Revolving Credit Agreement
ADVANTA NATIONAL BANK
Promissory Note
$ Pittsburgh, Pennsylvania
May 4, 1995
FOR VALUE RECEIVED, the undersigned ADVANTA NATIONAL
BANK, a national banking association ("ANB"), hereby promises to
pay to the order of (the "Bank"), on or before
the Expiration Date, and at such earlier dates as may be required
by the Agreement (as defined below), the lesser of (i) the
principal sum of Dollars ($ ) or
(ii) the aggregate unpaid principal amount of all Loans made by
the Bank to ANB from time to time pursuant to the Agreement. ANB
further promises to pay to the order of the Bank interest on the
unpaid principal amount hereof from time to time outstanding at
the rate or rates per annum determined pursuant to Section 2.07
of, or as otherwise provided in, the Agreement, payable on the
dates set forth in Section 2.09 of, or as otherwise provided in,
the Agreement.
This Promissory Note is one of the Notes referred to in
the Revolving Credit Agreement dated as of May 4, 1995, among
Advanta Corp. and ANB, as Borrowers, the Banks parties thereto
from time to time and Mellon Bank, N.A., as Agent for the Banks
(as the same may from time to time be amended, modified or
supplemented, the "Agreement"), which Agreement, among other
things, contains provisions for prepayments on account of
principal hereof prior to the maturity hereof and also for
acceleration of the maturity hereof upon the happening of certain
stated events, upon the terms and conditions therein specified.
Terms defined in the Agreement shall have the same meanings
herein.
This Promissory Note is secured by and is entitled to
the benefits of the Guaranty Agreement of Advanta Corp. referred
to in the Agreement.
ANB hereby expressly waives presentment, demand,
protest, and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this
Promissory Note and the Agreement, and an action for amounts due
hereunder or thereunder shall immediately accrue.
B-1<PAGE>
This Promissory Note shall be governed by, and construed
and enforced in accordance with, the laws of the Commonwealth of
Pennsylvania.
ADVANTA NATIONAL BANK
By:
(Signature)
Name:
Title:
B-2<PAGE>
Exhibit C to
Revolving Credit Agreement
Form of LOAN Request
Mellon Bank, N.A., as
Agent for the Banks Parties
to the Credit Agreement
One Mellon Bank Center, Room 151-0350
Pittsburgh, PA 15258
Attention: Henry J. Voorhees, Vice President
Ladies & Gentlemen:
The undersigned refers to the Revolving Credit Agreement
dated as of May 4, 1995 (the "Credit Agreement") (Terms defined in
the Credit Agreement are used herein as therein defined), among
Advanta Corp. and Advanta National Bank, as Borrowers, certain
Banks parties thereto, and Mellon Bank, N.A. as Agent for said
Banks and hereby gives you notice, pursuant to Section 2.04 of the
Credit Agreement, irrevocably, that the undersigned hereby
requests a Set of Loans under the Credit Agreement (the "Proposed
Borrowing"), and in connection therewith sets forth the following
information relating to such Set of Loans as required by Section
2.04 of the Credit Agreement:
(i) The Business Day on which the Proposed Borrowing is
to be made is , 199 ;
(ii) The Interest Rate Option applicable to the
Proposed Borrowing is the [Base Rate Option] [Euro-Rate
Option];
(iii) The aggregate principal amount of the Proposed
Borrowing is $ ;
(iv) The Interest Period to apply to the Proposed
Borrowing is [ days] [ months].
Very truly yours,
[NAME OF BORROWER]
By:
(Signature)
Name:
Title:
C-1
Exhibit D to
Revolving Credit Agreement
GUARANTY AND SURETYSHIP AGREEMENT
THIS AGREEMENT, dated as of May 4, 1995, made by ADVANTA
CORP., a Delaware corporation (the "Guarantor"), in favor of
MELLON BANK, N.A., a national banking association (the "Agent") as
agent for the Banks (as hereinafter defined).
Recitals:
A. Advanta National Bank, a national banking
association (the "Borrower"), and the Guarantor have entered into
a Revolving Credit Agreement of substantially even date herewith
(as amended, modified or supplemented from time to time, the
"Credit Agreement") with the lenders party thereto from time to
time (each a "Bank" and, collectively, the "Banks") and the Agent.
The Guarantor, as owner of all of the outstanding shares of stock
of the Borrower, will derive substantial direct and indirect
benefit from the Loans to be made to the Borrower under the Credit
Agreement.
B. The Agent and the Banks shall be referred to herein,
individually, each as a "Credit Party," and collectively, as the
"Credit Parties".
C. It is a condition precedent to the extension of
credit under the Credit Agreement that the Guarantor execute and
deliver this Agreement. This Agreement is made by the Guarantor
among other things to induce the Credit Parties to enter into the
Loan Documents and to induce the Banks to extend credit under the
Credit Agreement.
D. The Guarantor acknowledges that the Credit Parties
have relied and will rely on this Agreement in entering into the
Loan Documents (as defined in the Credit Agreement) and extending
credit under the Credit Agreement. The Guarantor further
acknowledges that it has, independently and without reliance upon
any Credit Party or any representation by or other information
from any Credit Party, made its own credit analysis and decision
to enter into this Agreement.
NOW, THEREFORE, in consideration of the premises, and
intending to be legally bound, the Guarantor hereby agrees as
follows:
ARTICLE I
DEFINITIONS
1.01. Definitions. Capitalized terms not otherwise
defined herein shall have the meanings given in the Credit
Agreement. In addition to the other terms defined elsewhere in
this Agreement, as used herein the term "Guaranteed Obligations"
shall have the following meaning:
D-1<PAGE>
"Guaranteed Obligations" shall mean all obligations from
time to time of the Borrower to any Credit Party under or in
connection with any Loan Document, including all obligations
to pay principal, interest, fees, indemnities or other
amounts, in each case whether such obligations are direct or
indirect, secured or unsecured, joint or several, absolute or
contingent, due or to become due, whether for payment or
performance, now existing or hereafter arising (including
interest and other obligations arising or accruing after the
commencement of any receivership, bankruptcy, insolvency,
reorganization, dissolution or similar proceeding with
respect to the Borrower or any other Person, or which would
have arisen or accrued but for the commencement of such
proceeding, even if such obligation or the claim thereof is
not enforceable or allowable in such proceeding).
ARTICLE II
GUARANTY AND SURETYSHIP
2.01. Guaranty and Suretyship. The Guarantor hereby
absolutely, unconditionally and irrevocably guarantees and becomes
surety for the full and punctual payment and performance of the
Guaranteed Obligations as and when such payment or performance
shall become due (at scheduled maturity, by acceleration or
otherwise) in accordance with the terms of the Loan Documents.
This Agreement is an agreement of suretyship as well as of
guaranty, is a guarantee of payment and performance and not merely
of collectibility, and is in no way conditioned upon any attempt
to collect from or proceed against the Borrower or any other
Person or any other event or circumstance. The obligations of the
Guarantor under this Agreement are direct and primary obligations
of the Guarantor and are independent of the Guaranteed
Obligations, and a separate action or actions may be brought
against the Guarantor regardless of whether action is brought
against the Borrower or any other Person or whether the Borrower
or any other Person is joined in any such action or actions.
2.02. Obligations Absolute. The Guarantor agrees that,
to the fullest extent permitted by Law, the Guaranteed Obligations
will be paid and performed strictly in accordance with the terms
of the Loan Documents, regardless of any Law now or hereafter in
effect in any jurisdiction affecting the Guaranteed Obligations,
any of the terms of the Loan Documents or the rights of any Credit
Party or any other Person with respect thereto. The obligations
of the Guarantor under this Agreement shall be absolute,
unconditional and irrevocable, irrespective of any of the
following:
(a) any lack of legality, validity, enforceability or
allowability (in a bankruptcy, receivership, insolvency,
reorganization, dissolution or similar proceeding, or
otherwise), or any avoidance or subordination, in whole or in
D-2<PAGE>
part, of any Loan Document or any of the Guaranteed
Obligations;
(b) any increase, decrease or change in the amount,
nature, type or purpose of any of the Guaranteed Obligations
(whether or not contemplated by the Loan Documents as
presently constituted); any change in the time, manner,
method or place of payment or performance of, or in any other
term of, any of the Guaranteed Obligations; any execution or
delivery of any additional Loan Documents; or any amendment
to, or refinancing or refunding of, any Loan Document or any
of the Guaranteed Obligations;
(c) any impairment by any Credit Party or any other
Person of any recourse of the Guarantor against the Borrower
or any other Person; any failure to assert any breach of or
default under any Loan Document or any of the Guaranteed
Obligations; any extensions of credit in excess of the amount
committed under or contemplated by the Loan Documents, or in
circumstances in which any condition to such extensions of
credit has not been satisfied; any impairment by the exercise
or non-exercise, or any other failure, omission, breach,
default, delay or wrongful action in connection with any
exercise or non-exercise, of any right or remedy against the
Borrower or any other Person under or in connection with any
Loan Document or any of the Guaranteed Obligations; any
refusal of payment or performance of any of the Guaranteed
Obligations, whether or not with any reservation of rights
against the Guarantor; or any application of collections
(including collections resulting from realization upon any
direct or indirect security for the Guaranteed Obligations)
to other obligations, if any, not entitled to the benefits of
this Agreement, in preference to Guaranteed Obligations
entitled to the benefits of this Agreement, or if any
collections are applied to Guaranteed Obligations, any
application to particular Guaranteed Obligations;
(d) any taking, exchange, amendment, termination,
subordination, release, loss or impairment of, or any failure
to protect, perfect, or preserve the value of, or any
enforcement of, realization upon, or exercise of rights or
remedies under or in connection with, or any failure,
omission, breach, default, delay or wrongful action by any
Credit Party or any other Person in connection with the
enforcement of, realization upon, or exercise of rights or
remedies under or in connection with, or any other action or
inaction by any Credit Party or any other Person in respect
of, any direct or indirect security for any of the Guaranteed
Obligations. As used in this Agreement, "direct or indirect
security" for the Guaranteed Obligations, and similar
phrases, includes any collateral security, guaranty,
suretyship, letter of credit, capital maintenance agreement,
put option, subordination agreement or other right or
arrangement of any nature providing direct or indirect
D-3<PAGE>
assurance of payment or performance of any of the Guaranteed
Obligations, made or on behalf of any Person;
(e) any merger, consolidation, liquidation,
dissolution, winding-up, charter revocation or forfeiture, or
other change in, restructuring or termination of the
corporate structure or existence of, the Borrower or any
other Person; any receivership, bankruptcy, insolvency,
reorganization, dissolution or similar proceeding with
respect to the Borrower or any other Person; or any action
taken or election made by any Credit Party (including any
election under Section 1111(b)(2) of the United States
Bankruptcy Code), the Borrower or any other Person in
connection with any such proceeding;
(f) any defense, setoff or counterclaim (including any
defense of failure of consideration, breach of warranty,
statute of frauds, bankruptcy, lack of legal capacity,
statute of limitations, lender liability, accord and
satisfaction or usury, and excluding only the defense of
full, strict and indefeasible payment and performance), which
may at any time be available to the Borrower or any other
Person with respect to any Loan Document or any of the
Guaranteed Obligations; or any discharge by operation of law
or release of the Borrower or any other Person from the
performance or observance of any Loan Document or any of the
Guaranteed Obligations; or
(g) any other event or circumstance, whether similar or
dissimilar to the foregoing, and whether known or unknown,
which might otherwise constitute a defense available to, or
limit the liability of, the Borrower, the Guarantor, a
guarantor or a surety, excepting only full, strict and
indefeasible payment and performance of the Guaranteed
Obligations.
2.03. Waivers, etc. To the fullest extent permitted by
law, the Guarantor hereby waives any defense to or limitation on
its obligations under this Agreement arising out of or based on
any event or circumstance referred to in Section 2.02. Without
limitation, the Guarantor waives each of the following:
(a) all notices, disclosures and demands of any nature
which otherwise might be required from time to time to
preserve intact any rights against the Guarantor, including
(i) any notice of any event or circumstance described in
Section 2.02, (ii) any notice required by any Law now or
hereafter in effect in any jurisdiction, (iii) any notice of
nonpayment, nonperformance, dishonor, or protest under any
Loan Document or any of the Guaranteed Obligations, (iv) any
notice of the incurrence of any Guaranteed Obligation,
(v) any notice of any default or any failure on the part of
the Borrower or any other Person to comply with any Loan
Document or any of the Guaranteed Obligations or any direct
D-4<PAGE>
or indirect security for any of the Guaranteed Obligations,
and (vi) any notice of any information pertaining to the
business, operations, condition (financial or otherwise) or
prospects of the Borrower or any other Person;
(b) any right to any marshalling of assets, to the
filing of any claim against the Borrower or any other Person
in the event of any receivership, bankruptcy, insolvency,
reorganization, dissolution or similar proceeding, or to the
exercise against the Borrower or any other Person of any
other right or remedy under or in connection with any Loan
Document or any of the Guaranteed Obligations or any direct
or indirect security for any of the Guaranteed Obligations;
any requirement of promptness or diligence on the part of any
Credit Party or any other Person; any requirement to exhaust
any remedies under or in connection with, or to mitigate the
damages resulting from default under, any Loan Document or
any of the Guaranteed Obligations or any direct or indirect
security for any of the Guaranteed Obligations; and any
requirement of acceptance of this Agreement, and any
requirement that the Guarantor receive notice of such
acceptance; and
(c) any defense or other right arising by reason of any
law now or hereafter in effect in any jurisdiction pertaining
to election of remedies (including anti-deficiency laws, "one
action" laws or similar laws), or by reason of any election
of remedies or other action or inaction by any Credit Party
(including commencement or completion of any judicial
proceeding or nonjudicial sale or other action in respect of
collateral security for any of the Guaranteed Obligations),
which results in denial or impairment of the right of any
Credit Party to seek a deficiency against the Borrower or any
other Person, or which otherwise discharges or impairs any of
the Guaranteed Obligations or any recourse of the Guarantor
against the Borrower or any other Person.
2.04. Reinstatement. This Agreement shall continue to
be effective, or be automatically reinstated, as the case may be,
if at any time payment of any of the Guaranteed Obligations is
avoided, rescinded or must otherwise be returned by any Credit
Party for any reason, all as though such payment had not been
made.
2.05. No Stay. Without limitation of any other
provision of this Agreement, if any acceleration of the time for
payment or performance of any Guaranteed Obligation, or any
condition to any such acceleration, shall at any time be stayed,
enjoined or prevented for any reason (including stay or injunction
resulting from the pendency against the Borrower or any other
Person of a receivership, bankruptcy, insolvency, reorganization,
dissolution or similar proceeding), the Guarantor agrees that, for
purposes of this Agreement and its obligations hereunder, such
Guaranteed Obligation shall be deemed to have been accelerated,
D-5<PAGE>
and such condition to acceleration shall be deemed to have been
met.
2.06. Payments. All payments to be made by the
Guarantor pursuant to this Agreement shall be made at the times
and in the manner prescribed for payments in Article II of the
Credit Agreement, without setoff, counterclaim, withholding or
other deduction of any nature.
2.07. Subrogation, etc. Any rights which the Guarantor
may have or acquire by way of subrogation, reimbursement,
exoneration, contribution or indemnity, and any similar rights
(whether arising by operation of law, by agreement or otherwise),
against the Borrower, arising from the existence, payment,
performance or enforcement of any of the obligations of the
Guarantor under or in connection with this Agreement, shall be
subordinate in right of payment to the Guaranteed Obligations, and
the Guarantor shall not exercise any such rights until all
Guaranteed Obligations and all other obligations under this
Agreement have been paid in full and all commitments to extend
credit under the Loan Documents shall have terminated. If,
notwithstanding the foregoing, any amount shall be received by the
Guarantor on account of any such rights at any time prior to the
time at which all Guaranteed Obligations and all other obligations
under this Agreement shall have been paid in full and all
commitments to extend credit under the Loan Documents shall have
terminated, such amount shall be held by the Guarantor in trust
for the benefit of the Credit Parties, segregated from other funds
held by the Guarantor, and shall be forthwith delivered to the
Agent in the exact form received by the Guarantor (with any
necessary endorsement), to be applied to the Guaranteed
Obligations, whether matured or unmatured, in such order as the
Agent or the Required Banks may elect, or to be held by the Agent
as security for the Guaranteed Obligations and disposed of by the
Agent in any lawful manner, all as the Agent or the Required Banks
may elect.
2.08. Continuing Agreement. This Agreement is a
continuing guaranty and shall continue in full force and effect
until all Guaranteed Obligations and all other amounts payable
under this Agreement have been paid and performed in full, and all
commitments to extend credit under the Loan Documents have
terminated, subject in any event to reinstatement in accordance
with Section 2.04.
2.09. Limitation on Payments. The parties hereto
intend to conform to all applicable laws limiting the maximum rate
of interest that may be charged or collected by the Credit Parties
from the Guarantor. Accordingly, notwithstanding any other
provision hereof, the Guarantor shall not be required to make any
payment to or for the account of any Credit Party, and each Credit
Party shall refund any payment made by the Guarantor, to the
extent that such requirement or such failure to refund would
violate or conflict with mandatory and nonwaivable provisions of
D-6<PAGE>
applicable law limiting the maximum amount of interest which may
be charged or collected by such Credit Party from the Guarantor.
In any action, suit or proceeding pertaining to this Agreement,
the burden of proof, by clear and convincing evidence, shall be on
the Person claiming that this Section 2.09 applies to limit any
obligation of the Guarantor under this Agreement or to require any
Credit Party to make any refund, or claiming that this Agreement
conflicts with any applicable law limiting the maximum rate of
interest that may be charged or collected by any Credit Party from
the Guarantor, as to each element of such claim. For purposes of
the definitions of "Guaranteed Obligations" and "Loan Documents"
as used in this Agreement, any provisions in the Loan Documents
which have the effect of limiting the obligations of the Borrower
in order to conform to applicable laws limiting the maximum rate
of interest that may be charged or collected by the Credit Parties
from the Borrower shall be ignored.
ARTICLE III
MISCELLANEOUS
3.01. Amendments, Notices, etc. Sections 9.01 through
9.10 and Section 9.15 of the Credit Agreement shall be applicable
to this Agreement as if set forth in full herein.
3.02. Setoff. In the event that any obligation of the
Guarantor now or hereafter existing under this Agreement or any
other Loan Document shall have become due and payable, each Credit
Party shall have the right from time to time, without notice to
the Guarantor, to set off against and apply to such due and
payable amount any obligation of any nature of such Credit Party
to the Guarantor, including all deposits (whether time or demand,
general or special, provisionally or finally credited, however
evidenced) now or hereafter maintained by the Guarantor with such
Credit Party. Such right shall be absolute and unconditional in
all circumstances and, without limitation, shall exist whether
such obligation to the Guarantor is matured or unmatured. Nothing
in this Agreement or any other Loan Document shall be deemed a
waiver of or restriction on any right of setoff or banker's lien
available to any Credit Party. The Guarantor hereby agrees that
any affiliate of a Credit Party, and any holder of a participation
in any obligation of the Guarantor under this Agreement, shall
have the same rights of setoff as such Credit Party as provided in
this Section 3.02 (regardless of whether such affiliate or
participant otherwise would be deemed a creditor of the
Guarantor).
3.03. Construction. In this Agreement, unless the
context otherwise clearly requires, references to the plural
include the singular, the singular, the plural and the part the
whole; "or" is not exclusive; and "include" means include without
limitation (and similarly for similar terms). This Agreement has
been fully negotiated between the applicable parties, each party
having the benefit of legal counsel, and accordingly neither any
D-7<PAGE>
doctrine of construction of guaranties or suretyships in favor of
the guarantor or surety, nor any doctrine of construction of
ambiguities against the party controlling the drafting, shall
apply to this Agreement. Section and other references in this
Agreement are to this Agreement unless otherwise specified.
3.04. Successors and Assigns. This Agreement shall be
binding upon the Guarantor and its successors, and shall inure to
the benefit of and be enforceable by the Credit Parties and their
respective successors and assigns. Without limitation of the
foregoing, each Bank (and any successive assignee or transferee)
from time to time may, in the manner provided in Section 9.14 of
the Credit Agreement, assign or otherwise transfer all or any
portion of its rights or obligations under the Loan Documents
(including all or any portion of any commitment to extend credit),
or any Guaranteed Obligations, to any other Person, and such
Guaranteed Obligations (including any Guaranteed Obligations
resulting from extension of credit by such other Person under or
in connection with the Loan Documents) shall be and remain
Guaranteed Obligations entitled to the benefit of this Agreement,
and to the extent of its interest in such Guaranteed Obligations
such other Person shall be vested with all the
benefits in respect thereof granted to such Bank in this Agreement
or otherwise.
IN WITNESS WHEREOF, the Guarantor has caused this
Agreement to be duly executed and delivered as of the date first
above written.
ADVANTA CORP.
By:
(Signature)
Name: David D. Wesselink
Title: Senior Vice President &
Chief Financial Officer
ACCEPTED AND AGREED:
MELLON BANK, N.A., as Agent
By:
(Signature)
Name:
Title:
D-8
Exhibit E to
Revolving Credit Agreement
ASSIGNMENT SUPPLEMENT
THIS ASSIGNMENT SUPPLEMENT, dated as of the date
specified in Item 1 of Schedule I hereto, among the Transferor
Bank specified in Item 2 of Schedule I hereto (the "Transferor
Bank"), each Purchasing Bank specified in Item 3 of Schedule I
hereto (each a "Purchasing Bank") and Mellon Bank, N.A., as Agent
for the Banks under the Credit Agreement described below.
Recitals:
A. This Assignment Supplement is being executed and
delivered in accordance with Section 9.14(c) of the Revolving
Credit Agreement, dated as of May 4, 1995 by and among Advanta
Corp., a Delaware corporation (the "Company"), and Advanta
National Bank, a national banking association (together with the
Company, the "Borrowers"), the Banks parties thereto from time to
time and Mellon Bank, N.A., a national banking association, as
Agent for the Banks (as the same may be amended, modified or
supplemented from time to time, the "Credit Agreement").
Capitalized terms used herein without definition have the meaning
specified in the Credit Agreement.
B. Each Purchasing Bank (if it is not already a Bank)
wishes to become a Bank party to the Credit Agreement.
C. The Transferor Bank is selling and assigning to each
Purchasing Bank, and each Purchasing Bank is purchasing and
assuming, a certain portion of the Transferor Bank's rights and
obligations under the Credit Agreement, including, without
limitation, the Transferor Bank's Commitment and Loans owing to it
and any Notes held by it (the "Transferor Bank's Interests").
NOW, THEREFORE, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. Assignment Effective Notice. Upon receipt by the
Agent of five counterparts of this Assignment Supplement (to each
of which is attached a fully completed Schedule I and Schedule
II), and each of which has been executed by the Transferor Bank,
by each Purchasing Bank and by any other Person required by
Section 9.14(c) of the Credit Agreement to execute this Assignment
Supplement, the Agent will transmit to the Borrowers, the
Transferor Bank and each Purchasing Bank an assignment effective
notice, substantially in the form of Schedule III to this
Assignment Supplement (an "Assignment Effective Notice"). The
date specified in such Assignment Effective Notice as the date on
which the transfer effected by this Assignment Supplement shall
become effective (the "Assignment Effective Date") shall be the
fifth Business Day following the date of such Assignment Effective
Notice or such other date as shall be agreed upon among the
E-1<PAGE>
Transferor Bank, the Purchasing Bank, the Agent and the Borrowers.
From and after Assignment Effective Date, each Purchasing Bank (if
not already a Bank party to the Credit Agreement) shall be a Bank
party to the Credit Agreement for all purposes thereof having the
respective interests in the Transferor Bank's interests reflected
in this Assignment Supplement.
2. Purchase Price; Sale. At or before 12:00 Noon,
local time at the Transferor Bank's office specified in Schedule
III, on the Assignment Effective Date, each Purchasing Bank shall
pay to the Transferor Bank, in immediately available funds, an
amount equal to the purchase price, as agreed between the
Transferor Bank and such Purchasing Bank (the "Purchase Price"),
of the portion being purchased by such Purchasing Bank (such
Purchasing Bank's "Purchased Percentage") of the Transferor Bank's
Interests. Effective upon receipt by the Transferor Bank of the
Purchase Price from a Purchasing Bank, the Transferor Bank hereby
irrevocably sells, assigns and transfers to such Purchasing Bank,
without recourse, representation or warranty (express or implied)
except as set forth in Section 6 hereof, and each Purchasing Bank
hereby irrevocably purchases, takes and assumes from the
Transferor Bank, such Purchasing Bank's Purchased Percentage of
the Transferor Bank's Interests. The Transferor Bank shall
promptly notify the Agent of the receipt of the Purchase Price
from a Purchasing Bank ("Purchase Price Receipt Notice"). Upon
receipt by the Agent of such Purchase Price Receipt Notice, the
Agent shall record in the Register the information with respect to
such sale and purchase as contemplated by Section 9.14(d) of the
Credit Agreement.
3. Principal, Interest and Fees. All principal
payments, interest, fees and other amounts that would otherwise be
payable from and after the Assignment Effective Date to or for the
account of the Transferor Bank in respect of the Transferor Bank's
Interests shall, instead, be payable to or for the account of the
Transferor Bank and the Purchasing Banks, as the case may be, in
accordance with their respective interests as reflected in this
Assignment Supplement.
4. Closing Documents. Concurrently with the execution
and delivery hereof, the Transferor Bank will request that the
Company provide to each Purchasing Bank (if it is not already a
Bank party to the Credit Agreement) conformed copies of all
documents delivered to such Transferor Bank on the Closing Date in
satisfaction of conditions precedent set forth in the Credit
Agreement.
5. Further Assurances. Each of the parties to this
Assignment Supplement agrees that at any time and from time to
time upon the written request of any other party, it will execute
and deliver such further documents and do such further acts and
things as such other party may reasonably request in order to
effect the purposes of this Assignment Supplement.
E-2<PAGE>
6. Certain Representations and Agreements. By
executing and delivering this Assignment Supplement, the
Transferor Bank and each Purchasing Bank confirm to and agree with
each other and the Agent and the Banks as follows:
(a) Other than the representation and warranty that it
is the legal and beneficial owner of the interest being
assigned hereby free and clear of any adverse claim, the
Transferor Bank makes no representation or warranty and
assumes no responsibility with respect to (i) the execution,
delivery, effectiveness, enforceability, genuineness,
validity or adequacy of the Credit Agreement or any other
Loan Document, (ii) any recital, representation, warranty,
document, certificate, report or statement in, provided for
in, received under or in connection with, the Credit
Agreement or any other Loan Document, or (iii) the
existence, validity, enforceability, perfection,
recordation, priority, adequacy or value, now or hereafter,
of any Lien or other direct or indirect security afforded or
purported to be afforded by any of the Loan Documents or
otherwise from time to time.
(b) The Transferor Bank makes no representation or
warranty and assumes no responsibility with respect to
(i) the performance or observance of any of the terms or
conditions of the Credit Agreement or any other Loan
Document on the part of either Borrower, (ii) the business,
operations, condition (financial or otherwise) or prospects
of the Borrowers or any other Person, or (iii) the existence
of any Event of Default or Potential Default.
(c) Each Purchasing Bank confirms that it has received
a copy of the Credit Agreement and each of the other Loan
Documents, together with copies of the financial statements
referred to in Sections 3.03 through 3.06 thereof, the most
recent financial statements delivered pursuant to
Section 5.01 thereof, if any, and such other documents and
information as it has deemed appropriate to make its own
credit and legal analysis and decision to enter into this
Assignment Supplement. Each Purchasing Bank confirms that
it has made such analysis and decision independently and
without reliance upon the Agent, the Transferor Bank or any
other Bank.
(d) Each Purchasing Bank, independently and without
reliance upon the Agent, the Transferor Bank or any other
Bank, and based on such documents and information as it
shall deem appropriate at the time, will make its own
decisions to take or not take action under or in connection
with the Credit Agreement or any other Loan Document.
(e) Each Purchasing Bank irrevocably appoints the
Agent to act as Agent for such Purchasing Bank under the
E-3<PAGE>
Credit Agreement and the other Loan Documents, all in
accordance with Article VIII of the Credit Agreement and the
other provisions of the Credit Agreement and the other Loan
Documents.
(f) Each Purchasing Bank agrees that it will perform
in accordance with their terms all of the obligations which
by the terms of the Credit Agreement and the other Loan
Documents are required to be performed by it as a Bank.
7. Schedule II. Schedule II hereto sets forth the
revised Commitments of the Transferor Bank and each Purchasing
Bank as well as administrative information with respect to each
Purchasing Bank.
8. Governing Law. THIS ASSIGNMENT SUPPLEMENT SHALL BE
GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT REGARD TO PRINCIPLES
OF CHOICE OF LAW.
9. Counterparts. This Assignment Supplement may be
executed on any number of counterparts and by the different
parties hereto on separate counterparts each of which, when so
executed, shall be deemed an original, but all such counterparts
shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment Supplement to be executed by their respective duly
authorized officers on Schedule I hereto as of the date set forth
in Item 1 of Schedule I hereto.
E-4<PAGE>
Schedule I to
Assignment Supplement
COMPLETION OF INFORMATION AND
SIGNATURES FOR ASSIGNMENT SUPPLEMENT
Re: Revolving Credit Agreement, dated as of May 4, 1995,
by and among Advanta Corp., a Delaware corporation, and
Advanta National Bank, a national banking association (the
"Borrowers"), the Banks parties thereto from time to time
and Mellon Bank, N.A., a national banking association, as
Agent for the Banks (as amended, modified or supplemented
from time to time, the "Credit Agreement")
Item 1 (Date of [Insert date of
Assignment Supplement): Assignment Supplement]
Item 2 (Transferor Bank): [Insert name of Transferor
Bank]
Item 3 (Purchasing Bank[s]): [Insert name[s] of
Purchasing Bank[s]]
Item 4 (Signatures of Parties
to Assignment Supplement):
[Name of Transferor Bank] ,
as Transferor Bank
By:
Title:
[Name of Purchasing Bank] ,
as Purchasing Bank
By:
Title:
[Name of Purchasing Bank] ,
as Purchasing Bank
By:
Title:
E-5<PAGE>
The following two consents are required
only when Purchasing Bank is not already
a Bank or an Affiliate of a Bank:
CONSENTED TO AND ACKNOWLEDGED:
ADVANTA CORP.
By:
Title:
MELLON BANK, N.A., as Agent
By:
Title:
ACCEPTED FOR RECORDATION
IN PURCHASING BANK REGISTER:
MELLON BANK, N.A., as Agent
By:
Title:
E-6<PAGE>
Schedule II to
Assignment Supplement
LIST OF LENDING OFFICES, ADDRESSES
FOR NOTICES AND COMMITTED AMOUNTS
[Name of Transferor
Bank] Revised Commitment Amount: $
Revised Commitment Percentage:
[Name of Purchasing
Bank] New Commitment Amount: $
New Commitment Percentage:
Administrative Information
for Purchasing Bank:
Address:
Attention:
Telephone:
Telecopier:
E-7<PAGE>
Schedule III to
Assignment Supplement
TRANSFER EFFECTIVE NOTICE
To: [Insert Name of Borrower, Transferor
Bank and each Purchasing Bank]
The undersigned, as Agent under the Revolving Credit
Agreement, dated as of May 4, 1995, by and among Advanta Corp., a
Delaware corporation, and Advanta National Bank, a national banking
association (the "Borrowers"), the Banks parties thereto from time
to time and Mellon Bank, N.A., a national banking association, as
Agent for the Banks (as the same may be amended, modified or
supplemented from time to time, the "Credit Agreement"),
acknowledges receipt of five executed counterparts of a completed
Assignment Supplement, dated , 199 , from [name of
Transferor Bank] to [name of each Purchasing Bank] (the "Assignment
Supplement"). Terms defined in the Assignment Supplement are used
herein as therein defined.
1. Pursuant to the Assignment Supplement, you are
advised that the Assignment Effective Date will be ,
199 . [Insert fifth Business Day following date of Transfer
Effective Notice or other date agreed to among the Transferor Bank,
the Purchasing Bank, the Agent and the Company.]
2. Pursuant to Section 9.14(c) of the Credit Agreement,
the Transferor Bank has delivered to the Agent the Transferor Bank
Notes.
3. Section 9.14(c) of the Credit Agreement provides that
the Borrowers are to deliver to the Agent on or before the
Assignment Effective Date the following Notes, each dated the date
of the Note it replaces.
[Describe each new Note for Transferor Bank and
Purchasing Bank as to Borrower, date (as required by the Credit
Agreement), principal amount and payee.]
4. The Assignment Supplement provides that each
Purchasing Bank is to pay its Purchase Price to the Transferor Bank
at or before 12:00 o'clock Noon, local time at the Transferor
Bank's lending office specified in Schedule II to the Assignment
Supplement, on the Assignment Effective Date in immediately
available funds.
Very truly yours,
MELLON BANK, N.A., as Agent
By:
Title:
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