-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IZ43xoVy+afm0RNUihDM0sYXqPglOEKMavgPP12R5BCpJJ9WrunN9eHbc+IgS556 9yFKVFGo2wB4FsCSVEfMBw== 0000912057-02-006382.txt : 20020414 0000912057-02-006382.hdr.sgml : 20020414 ACCESSION NUMBER: 0000912057-02-006382 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 18 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIT GROUP INC CENTRAL INDEX KEY: 0000020388 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE LESSORS [6172] IRS NUMBER: 651051227 STATE OF INCORPORATION: NV FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01861 FILM NUMBER: 02550053 BUSINESS ADDRESS: STREET 1: 1211 AVE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2125361390 MAIL ADDRESS: STREET 1: 1211 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 FORMER COMPANY: FORMER CONFORMED NAME: CIT GROUP INC DATE OF NAME CHANGE: 19971014 FORMER COMPANY: FORMER CONFORMED NAME: CIT FINANCIAL CORP/OLD/ DATE OF NAME CHANGE: 19860512 FORMER COMPANY: FORMER CONFORMED NAME: CIT GROUP HOLDINGS INC /DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: TYCO CAPITAL CORP DATE OF NAME CHANGE: 20011015 10-Q 1 a2069484z10-q.txt 10-Q - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ------------------------ FORM 10-Q /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2001 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 1-1861 ------------------------ CIT GROUP INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) NEVADA 65-1051227 (STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NUMBER) INCORPORATION OR ORGANIZATION)
1211 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10036 (ADDRESS OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) (212) 536-1390 (REGISTRANT'S TELEPHONE NUMBER) TYCO CAPITAL CORPORATION (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST REPORT) ------------------------ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /X/ No / / As of February 5, 2002, there were 100 shares of the Registrant's common stock outstanding, all of which are held indirectly by Tyco International Ltd. THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(A) AND (B) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM 10-Q WITH THE REDUCED DISCLOSURE FORMAT. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- CIT GROUP INC. AND SUBSIDIARIES TABLE OF CONTENTS
PAGE -------- PART I--FINANCIAL INFORMATION: Item 1--Consolidated Financial Statements Consolidated Balance Sheets............................. 1 Consolidated Statements of Income (Unaudited)........... 2 Consolidated Statements of Shareholder's Equity (Unaudited)............................................ 3 Consolidated Statements of Cash Flows (Unaudited)....... 4 Notes to Consolidated Financial Statements (Unaudited)............................................ 5-17 Item 2--Management's Discussion and Analysis of Financial Condition and Results of Operations....................... 18-29 PART II--OTHER INFORMATION: Item 6--Exhibits and Reports on Form 8-K.................... 30
PART I. FINANCIAL INFORMATION ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS CIT GROUP INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN MILLIONS)
DECEMBER 31, SEPTEMBER 30, 2001 2001 ------------ ------------- (UNAUDITED) ASSETS Financing and leasing assets: Finance receivables....................................... $29,199.5 $30,791.3 Reserve for credit losses................................. (472.1) (471.7) --------- --------- Net finance receivables................................... 28,727.4 30,319.6 Operating lease equipment, net............................ 5,639.8 5,649.9 Finance receivables held for sale......................... 1,510.3 2,014.9 Cash and cash equivalents................................... 1,017.6 728.7 Receivables from affiliates................................. 1,588.1 1,640.9 Goodwill and other intangible assets, net................... 6,857.1 6,569.5 Other assets................................................ 3,689.8 3,758.2 --------- --------- TOTAL ASSETS............................................ $49,030.1 $50,681.7 ========= ========= LIABILITIES AND SHAREHOLDER'S EQUITY Debt: Commercial paper.......................................... $ 7,789.7 $ 8,621.5 Variable-rate senior notes................................ 9,237.2 9,614.6 Fixed-rate senior notes................................... 16,702.7 17,065.5 Subordinated fixed-rate notes............................. -- 100.0 --------- --------- Total debt.................................................. 33,729.6 35,401.6 Credit balances of factoring clients........................ 2,184.2 2,392.9 Accrued liabilities and payables............................ 2,005.0 2,029.2 --------- --------- TOTAL LIABILITIES....................................... 37,918.8 39,823.7 Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding solely debentures of the Company............................................ 259.0 260.0 Shareholder's Equity: Parent company investment................................. 10,441.9 10,441.9 Retained earnings......................................... 491.5 252.4 Accumulated other comprehensive loss...................... (81.1) (96.3) --------- --------- TOTAL SHAREHOLDER'S EQUITY.............................. 10,852.3 10,598.0 --------- --------- TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY.............. $49,030.1 $50,681.7 ========= =========
See Notes to Consolidated Financial Statements (Unaudited). 1 CIT GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (IN MILLIONS)
FOR THE QUARTERS ENDED DECEMBER 31, --------------------------- 2001 2000 ----------- ------------- (SUCCESSOR) (PREDECESSOR) FINANCE INCOME.............................................. $1,083.8 $1,391.2 Interest expense............................................ 349.1 652.2 -------- -------- Net finance income.......................................... 734.7 739.0 Depreciation on operating lease equipment................... 270.2 348.4 -------- -------- Net finance margin.......................................... 464.5 390.6 Provision for credit losses................................. 106.0 63.8 -------- -------- Net finance margin after provision for credit losses........ 358.5 326.8 Other revenue............................................... 241.2 217.3 -------- -------- OPERATING MARGIN............................................ 599.7 544.1 -------- -------- Salaries and general operating expenses..................... 210.3 259.3 Goodwill amortization....................................... -- 22.5 -------- -------- OPERATING EXPENSES.......................................... 210.3 281.8 -------- -------- Income before provision for income taxes.................... 389.4 262.3 Provision for income taxes.................................. (148.0) (99.3) Minority interest in subsidiary trust holding solely debentures of the Company, after tax.................................... (2.3) (2.9) -------- -------- NET INCOME.................................................. $ 239.1 $ 160.1 ======== ========
See Notes to Consolidated Financial Statements (Unaudited). 2 CIT GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY (UNAUDITED) (IN MILLIONS)
ACCUMULATED PARENT OTHER TOTAL COMPANY RETAINED COMPREHENSIVE SHAREHOLDER'S INVESTMENT EARNINGS (LOSS) INCOME EQUITY ---------- -------- ------------- ------------- SEPTEMBER 30, 2001 (SUCCESSOR)................. $10,441.9 $252.4 $ (96.3) $10,598.0 --------- Net income..................................... 239.1 239.1 Foreign currency translation adjustments....... (9.4) (9.4) Unrealized gain on equity and securitization investments, net............................. 13.9 13.9 Change in fair values of derivatives qualifying as cash flow hedges.......................... 10.7 10.7 --------- Total comprehensive income..................... 254.3 --------- ------ ------- --------- DECEMBER 31, 2001 (SUCCESSOR).................. $10,441.9 $491.5 $ (81.1) $10,852.3 ========= ====== ======= =========
See Notes to Consolidated Financial Statements (Unaudited). 3 CIT GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN MILLIONS)
FOR THE QUARTERS ENDED DECEMBER 31, --------------------------- 2001 2000 ----------- ------------- (SUCCESSOR) (PREDECESSOR) CASH FLOWS FROM OPERATIONS Net income.................................................. $ 239.1 $ 160.1 Adjustments to reconcile net income to net cash flows from operations: Provision for credit losses............................... 106.0 63.8 Depreciation and amortization............................. 273.3 382.1 Provision for deferred federal income taxes............... 125.3 169.9 Gains on equipment, receivable and investment sales....... (59.1) (96.2) Decrease (increase) in other assets....................... 17.9 (478.4) (Decrease) increase in accrued liabilities and payables... (283.7) 425.5 Other....................................................... 22.3 9.4 ---------- ---------- Net cash flows provided by operations....................... 441.1 636.2 ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES Loans extended.............................................. (12,575.9) (12,823.5) Collections on loans........................................ 11,204.0 10,592.4 Proceeds from asset and receivable sales.................... 3,024.0 2,071.2 Purchases of assets to be leased............................ (385.4) (804.9) Net decrease in short-term factoring receivables............ 568.0 264.6 Purchase of finance receivable portfolios................... (346.7) (123.3) Change in receivable from affiliate......................... (147.2) -- Other....................................................... 26.6 (18.0) ---------- ---------- Net cash flows provided by (used for) investing activities................................................ 1,367.4 (841.5) ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES Repayments of variable and fixed-rate notes................. (1,365.2) (3,007.6) Proceeds from the issuance of variable and fixed-rate notes..................................................... 525.0 3,401.6 Net decrease in commercial paper............................ (831.8) (228.8) Cash collected for prior period capital contribution from Parent.................................................... 200.0 -- Net (repayments) collection of non-recourse leveraged lease debt...................................................... (47.6) 58.9 Cash dividends paid......................................... -- (26.1) ---------- ---------- Net cash flows (used for) provided by financing activities................................................ (1,519.6) 198.0 ---------- ---------- Net increase (decrease) in cash and cash equivalents........ 288.9 (7.3) Cash and cash equivalents, beginning of period.............. 728.7 819.4 ---------- ---------- Cash and cash equivalents, end of period.................... $ 1,017.6 $ 812.1 ========== ==========
See Notes to Consolidated Financial Statements (Unaudited). 4 CIT GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CIT Group Inc. ("CIT" or "the Company"), formerly known as Tyco Capital Corporation and previously The CIT Group, Inc., is a diversified finance company engaging in vendor, equipment, commercial, consumer and structured financing and leasing activities. BASIS OF PRESENTATION--These financial statements, which have been prepared in accordance with the instructions to Form 10-Q, do not include all of the information and note disclosures required by generally accepted accounting principles ("GAAP") in the United States and should be read in conjunction with the Company's Annual Report on Form 10-K for the transitional nine-month period ended September 30, 2001. These financial statements have not been examined by independent accountants in accordance with generally accepted auditing standards, but in the opinion of management include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of CIT's financial position and results of operations. On June 1, 2001, the Company was acquired by a wholly-owned subsidiary of Tyco International Ltd. in a purchase business combination (see Note 2). Tyco International Ltd. and its subsidiaries, excluding CIT and its subsidiaries, are referred to herein as the "Parent" or "Tyco." In accordance with the guidelines for accounting for business combinations, the purchase price paid by Tyco plus related purchase accounting adjustments, were "pushed down" and recorded in CIT's financial statements for the periods after June 1, 2001, resulting in a new basis of accounting for the "successor" period beginning June 2, 2001. As of the acquisition date, assets and liabilities were recorded at estimated fair value in CIT's financial statements. Any resulting premiums or discounts are being accreted or amortized on a level yield basis over the remaining estimated lives of the corresponding assets or liabilities. Information relating to all "predecessor" periods prior to the acquisition is presented using CIT's historical basis of accounting. CIT operates its businesses independently as an indirect wholly-owned subsidiary of Tyco (see Note 2). NOTE 2--ACQUISITION BY TYCO The purchase price paid by Tyco for CIT plus related purchase accounting adjustments was valued at approximately $9.5 billion and is presented as "Parent company investment" as of June 1, 2001 in the Consolidated Statements of Shareholder's Equity. The $9.5 billion value consisted of the following: the issuance of approximately 133.0 million Tyco common shares valued at $6,650.5 million on June 1, 2001 in exchange for approximately 73% of the outstanding CIT common stock (including exchangeable shares of CIT Exchangeco, Inc.); the payment of $2,486.4 million in cash to The Dai-Ichi Kangyo Bank, Limited ("DKB") on June 1, 2001 for approximately 27% of the outstanding CIT common stock; the issuance of stock options for Tyco common shares valued at $318.6 million in exchange for CIT stock options; and the payment of $29.2 million in acquisition-related costs incurred by Tyco. In addition, $22.3 million in acquisition-related costs incurred by Tyco were paid and have been reflected in CIT's equity as an additional capital contribution. The purchase of the CIT common stock held by DKB, which was contingent upon the satisfaction of the conditions to the merger, took place on June 1, 2001 immediately prior to the closing of the merger. Additionally, Tyco made cash capital contributions totaling $898.1 million for the period June 2, 2001 through December 31, 2001. In connection with the Tyco acquisition, CIT recorded acquired assets and liabilities at their estimated fair values. Fair value estimates are subject to future adjustment when appraisals or other valuation data are obtained or when restructuring plans are committed to or finalized. Such liabilities are recorded as additional purchase accounting adjustments as provided under GAAP. 5 CIT GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE 2--ACQUISITION BY TYCO (CONTINUED) During the quarter ended December 31, 2001, CIT recorded additions to goodwill of $287.6 million, primarily related to finalizing exit and restructuring plans for the sale or liquidation of non-strategic portfolios, including franchise finance, manufactured housing and recreational vehicle, as well as the finalization of appraisals and valuation data. The Company expects to finalize exit and restructuring plans, and the related additional purchase accounting adjustments, during the first calendar quarter of 2002. Management expects that any future adjustments will relate primarily to the restructuring of the international operations. These adjustments are not expected to be significant. The following table summarizes purchase accounting liabilities recorded during the quarter ended December 31, 2001 in connection with the acquisition by Tyco ($ in millions).
SEVERANCE FACILITIES OTHER TOTAL -------------------- --------------------- -------- -------- NUMBER OF NUMBER OF EMPLOYEES RESERVE FACILITIES RESERVE RESERVE RESERVE --------- -------- ---------- -------- -------- -------- Balance at September 30, 2001................... 263 $25.6 -- $ -- $4.4 $30.0 Additions to fiscal 2001 acquisition reserves... 88 5.9 9 17.6 -- 23.5 First quarter fiscal 2002 utilization........... (351) (26.4) -- -- -- (26.4) ---- ----- -------- ----- ---- ----- Balance at December 31, 2001.................... -- $ 5.1 9 $17.6 $4.4 $27.1 ==== ===== ======== ===== ==== =====
Changes in estimates recorded during the first quarter of fiscal 2002 related to finalizing the Tyco integration plan. These changes in estimates resulted in additional purchase accounting liabilities of $23.5 million, which also increased goodwill and deferred tax asset. These revisions include the elimination of 88 additional employees related to corporate administrative personnel located in North America. In addition, CIT designated nine North American regional servicing centers for closure in the Specialty Finance and Equipment Financing and Leasing segments. The remaining $5.1 million severance reserve relates to individuals who chose to receive payments on a periodic basis. NOTE 3--DERIVATIVE FINANCIAL INSTRUMENTS The components of the adjustment to Accumulated other comprehensive loss for derivatives qualifying as hedges of future cash flows at September 30, 2001 and the balance outstanding at December 31, 2001 are presented in the following table ($ in millions):
ADJUSTMENT OF FAIR VALUE OF INCOME TAX NET UNREALIZED DERIVATIVES EFFECTS LOSS (GAIN) ------------- ---------- -------------- Balance at September 30, 2001........................... $102.3 $(38.9) $63.4 Changes in values of derivatives qualifying as cash flow hedges................................................ (17.3) 6.6 (10.7) ------ ------ ----- Balance at December 31, 2001............................ $ 85.0 $(32.3) $52.7 ====== ====== =====
6 CIT GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE 3--DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED) The unrealized losses presented in the preceding table reflect primarily our use of interest rate swaps to convert variable-rate debt to fixed-rate debt, and are due to the fact that interest rates have declined from the June 1, 2001 Tyco acquisition date, or from the inception date of the derivative contracts. During the quarter ended December 31, 2001 approximately $0.8 million, before taxes, was recorded as additional interest expense for the ineffective portion of changes in fair values of cash flow hedges. Assuming no change in interest rates, $37.2 million, net of tax, of Accumulated other comprehensive loss is expected to be reclassified to earnings over the next twelve months as contractual cash payments are made. The Accumulated other comprehensive loss (along with the corresponding swap liability) will be adjusted as market interest rates change over the remaining life of the swaps. CIT uses derivatives for hedging purposes only, and does not enter into derivative financial instruments for trading or speculative purposes. As part of managing the exposure to changes in market interest rates, CIT, as an end-user, enters into various interest rate swap transactions in the over-the-counter markets, with other financial institutions acting as principal counterparties. To ensure both appropriate use as a hedge and hedge accounting treatment, all derivatives entered into are designated according to a hedge objective against a specified liability, including senior notes and commercial paper. CIT's primary hedge objectives include the conversion of variable-rate liabilities to fixed rates, and the conversion of fixed-rate liabilities to variable rates. The notional amounts, rates, indices and maturities of CIT's derivatives are required to closely match the related terms of CIT's hedged liabilities. The following table presents the notional principal amounts of interest rate swaps by class and the corresponding hedge objectives at December 31, 2001:
INTEREST RATE SWAPS NOTIONAL AMOUNT DESCRIPTION - ------------------- --------------- ----------- ($ IN MILLIONS) Floating to fixed-rate swaps.......... $ 4,757.7 Effectively converts the interest rate on an equivalent amount of commercial paper and variable-rate senior notes to a fixed rate. Fixed to floating-rate swaps.......... 790.8 Effectively converts the interest rate on an equivalent amount of fixed-rate senior notes to a variable rate. Total interest rate swaps............. $ 5,548.5 =========
CIT also utilizes foreign currency exchange forward contracts to hedge currency risk underlying its net investments in foreign operations and cross currency interest rate swaps to hedge both foreign currency and interest rate risk underlying foreign debt. At December 31, 2001, CIT was party to foreign currency exchange forward contracts with notional amounts of $3.3 billion and maturities ranging from 2002 to 2004. CIT was also party to cross currency interest rate swaps with a notional amount of $1.7 billion and maturities ranging from 2002 to 2027. 7 CIT GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE 4--BUSINESS SEGMENT INFORMATION The following table presents reportable segment information and the reconciliation of segment balances to the consolidated financial statement totals and the consolidated managed assets totals at and for the quarters ended December 31, 2001 and 2000 ($ millions). Certain prior year balances have been restated to conform to the current year presentation.
EQUIPMENT CORPORATE FINANCING SPECIALTY COMMERCIAL STRUCTURED TOTAL AND AND LEASING FINANCE FINANCE FINANCE SEGMENTS OTHER(1) CONSOLIDATED ----------- --------- ---------- ---------- --------- ----------- ------------ AT AND FOR THE QUARTER ENDED DECEMBER 31, 2001 (SUCCESSOR) Operating margin............... $ 169.6 $ 230.6 $ 121.5 $ 29.4 $ 551.1 $ 48.6 $ 599.7 Income taxes................... 36.6 61.2 33.1 8.3 139.2 8.8 148.0 Net income..................... 67.3 95.6 51.8 12.9 227.6 11.5 239.1 Total financing and leasing assets....................... 15,289.8 10,894.7 7,841.8 2,661.5 36,687.8 -- 36,687.8 Total managed assets........... 19,854.2 16,772.5 7,841.8 2,661.5 47,130.0 -- 47,130.0 AT AND FOR THE QUARTER ENDED DECEMBER 31, 2000 (PREDECESSOR) Operating margin............... $ 166.7 $ 256.7 $ 118.5 $ 18.7 $ 560.6 $(16.5) $ 544.1 Income taxes................... 37.7 44.0 29.9 5.6 117.2 (17.9) 99.3 Net income..................... 74.5 73.2 44.0 5.2 196.9 (36.8) 160.1 Total financing and leasing assets....................... 20,078.0 13,321.0 7,693.7 2,691.9 43,784.6 -- 43,784.6 Total managed assets........... 26,465.2 18,050.1 7,693.7 2,691.9 54,900.9 -- 54,900.9
- ------------------------------ (1) Goodwill amortization for the quarter ended December 31, 2000 was $19.9 million and is reflected in Corporate and Other in the table above. The adoption of Statement of Financial Accounting Standards No. 142 ("SFAS No. 142"), which eliminated goodwill amortization in October 2001, combined with improved interest margins and new basis accounting, resulted in the favorable trends in Corporate and Other in comparison to 2000. 8 CIT GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE 5--CONCENTRATIONS The following table presents the geographic and industry compositions of financing and leasing portfolio assets at December 31 and September 30, 2001 ($ in millions):
AT DECEMBER 31, 2001 AT SEPTEMBER 30, 2001 ---------------------- ------------------------ AMOUNT PERCENT AMOUNT PERCENT ---------- --------- --------- -------- North America: Northeast.......................................... $ 8,562.5 23.3% $ 9,117.9 23.5% West............................................... 7,268.0 19.8 7,561.7 19.4 Midwest............................................ 6,391.6 17.4 6,957.3 17.9 Southeast.......................................... 5,273.4 14.4 5,505.5 14.2 Southwest.......................................... 4,242.9 11.6 4,708.1 12.1 Canada............................................. 1,839.4 5.0 1,952.4 5.0 --------- ----- --------- ----- Total North America.................................. 33,577.8 91.5 35,802.9 92.1 Other foreign(1)..................................... 3,110.0 8.5 3,085.3 7.9 --------- ----- --------- ----- Total.............................................. $36,687.8 100.0% $38,888.2 100.0% ========= ===== ========= =====
AT DECEMBER 31, 2001 AT SEPTEMBER 30, 2001 ---------------------- ------------------------ AMOUNT PERCENT AMOUNT PERCENT ---------- --------- --------- -------- Manufacturing(2) (none greater than 3.3%)............ $ 7,537.7 20.5% $ 8,099.0 20.8% Retail(3)............................................ 4,132.0 11.3 4,928.1 12.7 Commercial airlines.................................. 3,453.5 9.4 3,296.6 8.5 Home mortgage........................................ 3,035.1 8.3 2,760.2 7.1 Transportation(4).................................... 2,695.5 7.3 2,643.2 6.8 Construction equipment............................... 2,123.4 5.8 2,259.9 5.8 Service industries................................... 1,768.3 4.8 1,577.6 4.1 Wholesaling.......................................... 1,389.6 3.8 1,366.6 3.5 Communications....................................... 1,298.9 3.5 1,309.5 3.4 Other (none greater than 3.0%)....................... 9,253.8 25.3 10,647.5 27.3 --------- ----- --------- ----- Total.............................................. $36,687.8 100.0% $38,888.2 100.0% ========= ===== ========= =====
- ------------------------------ (1) At December 31, 2001 the Company had approximately $200 million of U.S. dollar denominated loans and assets outstanding to customers located in or doing business in Argentina. (2) Includes manufacturers of steel and metal products, textiles and apparel, printing and paper products, and other industries. (3) Includes retailers of apparel (4.3%) and general merchandise (3.2%). (4) Includes rail, bus, over-the-road trucking and business aircraft. 9 CIT GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE 6--ACCOUNTING CHANGE--GOODWILL AMORTIZATION Effective October 1, 2001, CIT adopted SFAS No. 142, "Goodwill and Other Intangible Assets," under which goodwill is no longer amortized. Following is a reconciliation of previously reported net income to pro forma net income excluding goodwill amortization for the quarter ended December 31, 2000 ($ in millions):
2001 2000 ----------- ------------- (SUCCESSOR) (PREDECESSOR) Net income as reported................................ $239.1 $160.1 Goodwill amortization, net of tax..................... -- 19.9 ------ ------ Pro forma net income.................................. $239.1 $180.0 ====== ======
Other intangible assets, comprised primarily of proprietary computer software and related processes, totaled $20.9 million and $22.0 million at December 31, 2001 and September 30, 2001, respectively, and are included in Goodwill and other intangible assets, net on the Consolidated Balance Sheets. NOTE 7--SUMMARIZED FINANCIAL INFORMATION OF SUBSIDIARIES The following presents condensed consolidating financial information for CIT Holdings LLC and its wholly-owned subsidiary, Capita Corporation (formerly AT&T Capital Corporation). CIT has guaranteed on a full and unconditional basis the existing registered debt securities and certain other indebtedness of these subsidiaries ($ in millions). 10 CIT GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE 7--SUMMARIZED FINANCIAL INFORMATION OF SUBSIDIARIES (CONTINUED) CONSOLIDATING BALANCE SHEET DECEMBER 31, 2001 (SUCCESSOR)
CIT CAPITA HOLDINGS OTHER ($ IN MILLIONS) CIT GROUP INC. CORPORATION LLC SUBSIDIARIES ELIMINATIONS TOTAL - --------------- -------------- ----------- -------- ------------ ------------ --------- ASSETS Net finance receivables.......... $ 1,658.8 $3,244.9 $1,084.2 $22,739.5 $ -- $28,727.4 Operating lease equipment, net... -- 1,066.5 246.8 4,326.5 -- 5,639.8 Assets held for sale............. -- 39.1 106.1 1,365.1 -- 1,510.3 Cash and cash equivalents........ 833.4 145.1 110.6 (71.5) -- 1,017.6 Other assets..................... 10,729.5 466.1 128.1 11,663.6 (10,852.3) 12,135.0 ---------- -------- -------- --------- ---------- --------- TOTAL ASSETS................... $ 13,221.7 $4,961.7 $1,675.8 $40,023.2 $(10,852.3) $49,030.1 ========== ======== ======== ========= ========== ========= LIABILITIES AND SHAREHOLDER'S EQUITY Debt............................. $ 28,725.0 $2,923.0 $ 276.4 $ 1,805.2 $ -- $33,729.6 Credit balances of factoring clients........................ -- -- -- 2,184.2 -- 2,184.2 Other liabilities................ (26,355.6) 1,455.0 (501.7) 27,407.3 -- 2,005.0 ---------- -------- -------- --------- ---------- --------- Total Liabilities.............. 2,369.4 4,378.0 (225.3) 31,396.7 -- 37,918.8 Preferred securities............. -- -- -- 259.0 -- 259.0 Equity........................... 10,852.3 583.7 1,901.1 8,367.5 (10,852.3) 10,852.3 ---------- -------- -------- --------- ---------- --------- TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY......... $ 13,221.7 $4,961.7 $1,675.8 $40,023.2 $(10,852.3) $49,030.1 ========== ======== ======== ========= ========== =========
11 CIT GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE 7--SUMMARIZED FINANCIAL INFORMATION OF SUBSIDIARIES (CONTINUED) CONSOLIDATING BALANCE SHEET SEPTEMBER 30, 2001 (SUCCESSOR)
CIT CAPITA HOLDINGS OTHER ($ IN MILLIONS) CIT GROUP INC. CORPORATION LLC SUBSIDIARIES ELIMINATIONS TOTAL - --------------- -------------- ----------- -------- ------------ ------------ --------- ASSETS Net finance receivables.......... $ 1,834.6 $3,074.4 $1,506.1 $23,904.5 $ -- $30,319.6 Operating lease equipment, net... -- 1,203.2 273.4 4,173.3 -- 5,649.9 Assets held for sale............. -- 32.9 157.5 1,824.5 -- 2,014.9 Cash and cash equivalents........ 440.0 107.0 4.2 177.5 -- 728.7 Other assets..................... 10,150.2 291.4 302.8 11,822.2 (10,598.0) 11,968.6 ---------- -------- -------- --------- ---------- --------- TOTAL ASSETS................... $ 12,424.8 $4,708.9 $2,244.0 $41,902.0 $(10,598.0) $50,681.7 ========== ======== ======== ========= ========== ========= LIABILITIES AND SHAREHOLDER'S EQUITY Debt............................. $ 30,218.0 $2,879.2 $ 196.3 $ 2,108.1 $ -- $35,401.6 Credit balances of factoring clients........................ -- -- -- 2,392.9 -- 2,392.9 Other liabilities................ (28,391.2) 1,275.7 119.9 29,024.8 -- 2,029.2 ---------- -------- -------- --------- ---------- --------- Total Liabilities.............. 1,826.8 4,154.9 316.2 33,525.8 -- 39,823.7 Preferred securities............. -- -- -- 260.0 -- 260.0 Equity........................... 10,598.0 554.0 1,927.8 8,116.2 (10,598.0) 10,598.0 ---------- -------- -------- --------- ---------- --------- TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY......... $ 12,424.8 $4,708.9 $2,244.0 $41,902.0 $(10,598.0) $50,681.7 ========== ======== ======== ========= ========== =========
12 CIT GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE 7--SUMMARIZED FINANCIAL INFORMATION OF SUBSIDIARIES (CONTINUED) CONSOLIDATING STATEMENT OF INCOME QUARTER ENDED DECEMBER 31, 2001 (SUCCESSOR)
CIT CAPITA HOLDINGS OTHER ($ IN MILLIONS) CIT GROUP INC. CORPORATION LLC SUBSIDIARIES ELIMINATIONS TOTAL - --------------- -------------- ----------- -------- ------------ ------------ -------- FINANCE INCOME.................... $ 52.6 $293.4 $64.2 $673.6 $ -- $1,083.8 Interest expense.................. 32.1 82.7 1.0 233.3 -- 349.1 ------ ------ ----- ------ ------- -------- Net finance income................ 20.5 210.7 63.2 440.3 -- 734.7 Depreciation on operating lease note equipment.................. -- 139.6 31.6 99.0 -- 270.2 ------ ------ ----- ------ ------- -------- Net finance margin................ 20.5 71.1 31.6 341.3 -- 464.5 Provision for credit losses....... 27.0 5.1 2.8 71.1 -- 106.0 ------ ------ ----- ------ ------- -------- Net finance margin after provision for credit losses............... (6.5) 66.0 28.8 270.2 -- 358.5 Equity in net income of subsidiaries.................... 252.5 -- -- -- (252.5) -- Other revenue..................... 0.1 28.4 24.8 187.9 -- 241.2 ------ ------ ----- ------ ------- -------- OPERATING MARGIN.................. 246.1 94.4 53.6 458.1 (252.5) 599.7 Operating expenses................ 20.6 43.1 22.0 124.6 -- 210.3 ------ ------ ----- ------ ------- -------- Income before provision for income taxes........................... 225.5 51.3 31.6 333.5 (252.5) 389.4 Provision for income taxes........ 13.6 (13.4) (7.3) (140.9) -- (148.0) Minority interest, after tax...... -- -- -- (2.3) -- (2.3) ------ ------ ----- ------ ------- -------- NET INCOME........................ $239.1 $ 37.9 $24.3 $190.3 $(252.5) $ 239.1 ====== ====== ===== ====== ======= ========
13 CIT GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE 7--SUMMARIZED FINANCIAL INFORMATION OF SUBSIDIARIES (CONTINUED) CONSOLIDATING STATEMENT OF INCOME QUARTER ENDED DECEMBER 31, 2000 (PREDECESSOR)
CIT CAPITA HOLDINGS OTHER ($ IN MILLIONS) CIT GROUP INC. CORPORATION LLC SUBSIDIARIES ELIMINATIONS TOTAL - --------------- -------------- ----------- -------- ------------ ------------ -------- FINANCE INCOME.................... $ 85.1 $361.5 $63.0 $881.6 $ -- $1,391.2 Interest expense.................. 74.2 140.5 2.6 434.9 -- 652.2 ------ ------ ----- ------ ------- -------- Net finance income................ 10.9 221.0 60.4 446.7 -- 739.0 Depreciation on operating lease equipment....................... -- 163.7 30.0 154.7 -- 348.4 ------ ------ ----- ------ ------- -------- Net finance margin................ 10.9 57.3 30.4 292.0 -- 390.6 Provision for credit losses....... 2.8 7.7 31.7 21.6 -- 63.8 ------ ------ ----- ------ ------- -------- Net finance margin after provision for credit losses............... 8.1 49.6 (1.3) 270.4 -- 326.8 Equity in net income of subsidiaries.................... 175.9 -- -- -- (175.9) -- Other revenue..................... 5.1 35.2 23.7 153.3 -- 217.3 ------ ------ ----- ------ ------- -------- OPERATING MARGIN.................. 189.1 84.8 22.4 423.7 (175.9) 544.1 Operating expenses................ 32.8 66.8 25.9 156.3 -- 281.8 ------ ------ ----- ------ ------- -------- Income before provision for income taxes........................... 156.3 18.0 (3.5) 267.4 (175.9) 262.3 Provision for income taxes........ 3.8 (6.8) 1.3 (97.6) -- (99.3) Minority interest, after tax...... -- -- -- (2.9) -- (2.9) ------ ------ ----- ------ ------- -------- NET INCOME........................ $160.1 $ 11.2 $(2.2) $166.9 $(175.9) $ 160.1 ====== ====== ===== ====== ======= ========
14 CIT GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE 7--SUMMARIZED FINANCIAL INFORMATION OF SUBSIDIARIES (CONTINUED) CONSOLIDATING STATEMENT OF CASH FLOWS QUARTER ENDED DECEMBER 31, 2001 (SUCCESSOR)
CIT CAPITA HOLDINGS OTHER ($ IN MILLIONS) CIT GROUP INC. CORPORATION LLC SUBSIDIARIES ELIMINATIONS TOTAL - --------------- -------------- ----------- -------- ------------ ------------ -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net cash flows (used for) provided by operations................... $ (73.5) $(60.1) $(382.9) $ 957.6 $ -- $ 441.1 --------- ------ ------- --------- --------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Net decrease (increase) in financing and leasing assets.... 148.8 (169.7) 477.9 983.4 -- 1,440.4 Decrease (increase) in intercompany loans and investments..................... 1,811.1 -- -- (147.2) (1,811.1) (147.2) Other............................. -- -- -- 26.6 -- 26.6 --------- ------ ------- --------- --------- -------- Net cash flows provided by (used for) investing activities....... 1,959.9 (169.7) 477.9 862.8 (1,811.1) 1,319.8 --------- ------ ------- --------- --------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Net (decrease) increase in debt... (1,493.0) 43.8 80.1 (302.9) -- (1,672.0) Intercompany financing............ -- 224.1 (68.7) (1,766.5) 1,811.1 200.0 --------- ------ ------- --------- --------- -------- Net cash flows (used for) provided by financing activities......... (1,493.0) 267.9 11.4 (2,069.4) 1,811.1 (1,472.0) --------- ------ ------- --------- --------- -------- Net increase (decrease) in cash and cash equivalents............ 393.4 38.1 106.4 (249.0) -- 288.9 Cash and cash equivalents, beginning of period............. 440.0 107.0 4.2 177.5 -- 728.7 --------- ------ ------- --------- --------- -------- Cash and cash equivalents, end of period.......................... $ 833.4 $145.1 $ 110.6 $ (71.5) $ -- $1,017.6 ========= ====== ======= ========= ========= ========
15 CIT GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE 7--SUMMARIZED FINANCIAL INFORMATION OF SUBSIDIARIES (CONTINUED) CONSOLIDATING STATEMENT OF CASH FLOWS QUARTER ENDED DECEMBER 31, 2000 (PREDECESSOR)
CIT CAPITA HOLDINGS OTHER ($ IN MILLIONS) CIT GROUP INC. CORPORATION LLC SUBSIDIARIES ELIMINATIONS TOTAL - --------------- -------------- ----------- -------- ------------ ------------ -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net cash flows provided by (used for) operations.................. $ 11.7 $ (108.5) $ 157.2 $ 575.8 $ -- $ 636.2 -------- --------- ------- -------- ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Net decrease (increase) in financing and leasing assets..... 139.3 (610.8) (249.9) (43.2) -- (764.6) Increase in intercompany loans and investments...................... (796.8) -- -- -- 796.8 -- Other.............................. -- -- -- (18.0) -- (18.0) -------- --------- ------- -------- ------- ------- Net cash flows (used for) provided by investing activities.......... (657.5) (610.8) (249.9) (61.2) 796.8 (782.6) -------- --------- ------- -------- ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES: Net increase (decrease) in debt.... 1,614.6 (1,516.2) 42.6 24.2 -- 165.2 Intercompany financing............. -- 2,278.8 (49.8) (1,432.2) (796.8) -- Cash dividends paid................ -- -- -- (26.1) -- (26.1) -------- --------- ------- -------- ------- ------- Net cash flows provided by (used for) financing activities........ 1,614.6 762.6 (7.2) (1,434.1) (796.8) 139.1 -------- --------- ------- -------- ------- ------- Net increase (decrease) in cash and cash equivalents................. 968.8 43.3 (99.9) (919.5) -- (7.3) Cash and cash equivalents, beginning of period.............. 151.7 86.0 19.2 562.5 -- 819.4 -------- --------- ------- -------- ------- ------- Cash and cash equivalents, end of period........................... $1,120.5 $ 129.3 $ (80.7) $ (357.0) $ -- $ 812.1 ======== ========= ======= ======== ======= =======
16 CIT GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE 8--RELATED PARTY TRANSACTIONS CIT and Tyco have agreed that CIT and Tyco will not engage in transactions, including finance, underwriting and asset management and servicing transactions, unless the transactions are at arm's-length and for fair value. In particular, they have agreed that CIT will have sole discretion and decision-making authority where CIT is underwriting, managing and servicing assets in transactions originated through Tyco. CIT and Tyco have also agreed on a limitation of dividends and distributions from CIT to Tyco, calculated generally based on the net income of CIT, and that CIT will at all times maintain its books, records and assets separately from Tyco. Further, on February 4, 2002, CIT announced its intention to amend indentures to restrict or prohibit certain transactions with Tyco as discussed in Note 9. During the quarter ended December 31, 2001, certain subsidiaries of Tyco sold receivables totaling $360.0 million to CIT in a factoring transaction for $354.8 million in cash. The difference of $5.2 million represents fee income which will be recognized by CIT as income over the term of the transaction. On September 30, 2001, CIT sold certain international subsidiaries to a non-U.S. subsidiary of Tyco. As a result of this sale, CIT has receivables from Tyco affiliates totaling $1,588.1 million at December 31, 2001, representing CIT's debt investment in these subsidiaries. CIT charges arm's-length, market-based interest rates on these receivables, and recorded $19.0 million of interest income, as an offset to interest expense, related to those notes for the quarter ended December 31, 2001. A note receivable issued at the time of this transaction of approximately $295 million was collected during the quarter. Certain of CIT's expenses, such as third-party consulting and legal fees, are paid by Tyco and billed to CIT. As of December 31, 2001, CIT has outstanding payables to subsidiaries of Tyco totaling $16.3 million related primarily to these charges. NOTE 9--SUBSEQUENT EVENTS On January 22, 2002, Tyco announced a plan to separate into four independent, publicly-traded companies and CIT is one of those companies. Under the plan, common shares of CIT are expected to be distributed to Tyco shareholders in the second quarter of calendar 2002. However, Tyco will consider other options, including selling CIT. On February 4, 2002, CIT announced that it is undertaking several initiatives to strengthen its financial position. These initiatives include: plans to establish new securitization facilities that provide access to approximately $3.0 billion of financing; plans to establish a dealer group for CIT's commercial paper program; and plans to amend the Company's existing public debt indentures to restrict intercompany transactions with Tyco, including prohibiting the extension of loans and payment of dividends. On February 5, 2002, CIT drew down on its $8.5 billion unsecured bank credit facilities. The Company is using the proceeds to satisfy its outstanding commercial paper obligations at their scheduled maturities. On February 8, 2002, the Company changed its name from Tyco Capital Corporation to CIT Group Inc. On February 11, 2002, CIT repurchased the international subsidiaries that it had previously sold to an affiliate of Tyco on September 30, 2001. In conjunction with this repurchase, the receivable from affiliate of $1.6 billion on the Consolidated Balance Sheet at December 31, 2001 has been satisfied (see Note 8). 17 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW The accompanying unaudited Consolidated Financial Statements include the results of CIT Group Inc., a Nevada corporation ("we," "CIT" or the "Company"), formerly known as Tyco Capital Corporation and previously The CIT Group, Inc. On June 1, 2001, The CIT Group, Inc. was acquired by a wholly-owned subsidiary of Tyco International Ltd. ("Tyco"), a diversified manufacturing and service company, in a purchase business combination. In accordance with the guidelines for accounting for business combinations, the purchase price paid by Tyco plus related purchase accounting adjustments have been "pushed down" and recorded in CIT's financial statements, resulting in a new basis of accounting for the "successor" period beginning June 2, 2001. As of the acquisition date, assets and liabilities were recorded at estimated fair value in the CIT financial statements. Information relating to all "predecessor" periods prior to the acquisition is presented using CIT's historical basis of accounting. In September 2001, CIT changed its fiscal year end from December 31 to September 30 to conform to Tyco's fiscal year end. On February 8, 2002, we changed our name from Tyco Capital Corporation to CIT Group Inc. The following table summarizes our net income and related data ($ in millions).
QUARTER ENDED DECEMBER 31, --------------------------- 2001 2000 ----------- ------------- (SUCCESSOR) (PREDECESSOR) Net income.................................................. $239.1 $160.1 Pro forma net income excluding goodwill amortization........ $239.1 $180.0 Return on average tangible shareholder's equity............. 23.3% 16.3% Return on average earning assets............................ 2.68% 1.54%
Net income for the quarter ended December 31, 2001, of $239.1 million, improved 49.3% from the quarter ended December 31, 2000, as a stronger net interest margin, higher other revenues and reduced operating expenses, more than offset a higher provision for credit losses. Reduced operating expenses were partially a result of our adoption of Statement of Financial Accounting Standards No. ("SFAS") 142 "Goodwill and Other Intangible Assets" on October 1, 2001. As a result of the adoption, there was no goodwill amortization for the current quarter, while we had $19.9 million of goodwill amortization (after tax) in the quarter ended December 31, 2000. Excluding goodwill amortization, net income for the quarter improved 32.8% from the same quarter in 2000. Profitability as measured by the return on assets and return on average tangible equity similarly improved. These year over year improvements also reflect the sale and liquidation of low-yielding, non-strategic assets, lower 2001 market interest rates and funding costs, the effects of fair value adjustments in new basis accounting on net interest margin and lower leverage. 18 NET FINANCE MARGIN A comparison of net finance income and net finance margin for 2001 and 2000 is set forth in the table below ($ in millions):
QUARTER ENDED DECEMBER 31, INCREASE INCREASE --------------------------- (DECREASE) (DECREASE) 2001 2000 AMOUNT PERCENT ----------- ------------- ---------- ---------- (SUCCESSOR) (PREDECESSOR) Finance income................................... $ 1,083.8 $ 1,391.2 $ (307.4) (22.1)% Interest expense................................. 349.1 652.2 (303.1) (46.5)% --------- --------- --------- Net finance income............................. 734.7 739.0 (4.3) (0.6)% Depreciation on operating lease equipment........ 270.2 348.4 (78.2) (22.4)% --------- --------- --------- Net finance margin............................. $ 464.5 $ 390.6 $ 73.9 18.9% ========= ========= ========= Average earning assets(1)("AEA")................. $35,695.0 $41,669.0 $(5,974.0) (14.3)% As a % of AEA: Finance income................................... 12.15% 13.35% Interest expense................................. 3.91% 6.26% --------- --------- Net finance income............................. 8.24% 7.09% Depreciation on operating lease equipment........ 3.03% 3.34% --------- --------- Net finance margin............................... 5.21% 3.75% ========= =========
- ------------------------------ (1) Average earning assets is the average of finance receivables, operating lease equipment, finance receivables held for sale and certain investments, less credit balances of factoring clients. Net finance margin increased $73.9 million, or 18.9%, to $464.5 million for the quarter ended December 31, 2001 from the quarter ended December 31, 2000. Finance income declined $307.4 million, reflecting a 14.3% decline in average earning assets. However, as a percentage of AEA, net finance margin increased to 5.21% for the quarter ended December 31, 2001 from 3.75% for the prior year quarter. AEA declined due to the following: (1) sales and liquidation of non-strategic assets; (2) the sale of certain international assets to a subsidiary of Tyco on September 30, 2001; and (3) lower new business origination volume due to soft economic conditions and the exit of non-strategic businesses. The increase in net finance margin as a percentage of AEA in 2001 was due to the following: (1) the above mentioned exits from non-strategic and under-performing businesses; (2) the effect of fair value adjustments in new basis of accounting to reflect market interest rates on debt and asset portfolios at the time of the acquisition by Tyco; (3) the sharp decline in short term interest rates over the last 2 months of the quarter ended December 31, 2001; and (4) lower leverage in 2001. Finance income (interest on loans and lease rentals) for the quarter ended December 31, 2001 decreased $307.4 million, or 22.1% to $1,083.8 million from $1,391.2 million for the comparable 2000 quarter. As a percent of AEA, finance income was 12.15% for the quarter ended December 31, 2001, compared to 13.35% for the comparable 2000 quarter, as the impact of portfolio mix changes resulting from the sale and liquidation activities, as well as the favorable impact of new basis accounting, were offset by the effects of lower 2001 market interest rates and lower rentals in the aerospace portfolio due to the industry downturn post September 11, 2001. Interest expense for the quarter ended December 31, 2001 decreased $303.1 million from the comparable 2000 quarter. As a percent of AEA, interest expense for the quarter ended December 31, 2001 decreased to 3.91% from 6.26% for the quarter ended December 31, 2000. The lower interest expense both in dollars and as a percentage of AEA reflects the lower 2001 debt levels associated with 19 funding a lower asset base and decreased leverage, the lower market interest rates in 2001 and the effect of fair value adjustments in new basis accounting. Depreciation on operating lease equipment for the quarter ended December 31, 2001 was $270.2 million, compared to $348.4 million in the comparable 2000 quarter. The declines in both operating lease equipment and depreciation on operating leases in the quarter ended December 31, 2001 from the December 2000 quarter reflects the sale of certain international assets to a subsidiary of Tyco on September 30, 2001, as well as the sale of certain rail assets in Equipment Financing and Leasing during the prior quarter. Operating lease margin (rental income less depreciation expense) was 6.3% for the quarter ended December 31, 2001 compared to 7.3% for the quarter ended December 31, 2000. As a percent of average operating lease equipment, annualized depreciation expense was 18.7% and 19.8% for the quarters ended December 31, 2001 and 2000, respectively. The operating lease equipment portfolio was $5.6 billion at December 31, 2001, unchanged from September 30, 2001, but down from $7.2 billion at December 31, 2000. Our depreciable assets range from smaller-ticket shorter-term leases (E.G., computers) to larger-ticket, longer-term leases (E.G., aircraft and rail assets). PROVISION AND RESERVE FOR CREDIT LOSSES The provision for credit losses for the quarter ended December 31, 2001 was $106.0 million, up from $63.8 million during the quarter ended December 31, 2000. The increased provision reflects higher 2001 charge-off levels and additions to the reserve for credit losses. Net charge-offs increased to $103.8 million or 1.36% of average finance receivables during the quarter ended December 31, 2001 as compared to $60.1 million or 0.70% during the comparative 2000 quarter. As shown in a following table, excluding liquidating portfolios of non-strategic assets, net charge-offs were $56.7 million or 0.80% during the quarter ended December 31, 2001. Our provision for credit losses and reserve for credit losses are presented in the following table ($ in millions).
FOR THE QUARTER ENDED --------------------------------------- DECEMBER 31, 2001 DECEMBER 31, 2000 ------------------ ------------------ (SUCCESSOR) (PREDECESSOR) Balance beginning of period................................. $471.7 468.2 ------ ------ Provision for credit losses................................. 106.0 63.8 Reserves relating to dispositions, acquisitions, other...... (1.8) (3.4) ------ ------ Additions to reserve for credit losses.................... 104.2 60.4 ------ ------ Net credit losses: Equipment Financing and Leasing............................. 62.1 22.1 Specialty Finance--Commercial............................... 11.7 13.4 Commercial Finance.......................................... 16.6 11.3 Specialty Finance--Consumer................................. 13.4 13.3 ------ ------ Total net credit losses................................... 103.8 60.1 ------ ------ Balance end of period....................................... $472.1 $468.5 ====== ====== Reserve for credit losses as a percentage of finance receivables............................................... 1.62% 1.40%
20 The following table sets forth our net charge-off experience in amount and as a percent of average finance receivables on an annualized basis by business segment ($ in millions):
QUARTER ENDED DECEMBER 31, --------------------------------------------- 2001 2000 ------------------- ------------------- (SUCCESSOR) (PREDECESSOR) Equipment Financing and Leasing............................. $ 62.1 2.19% $22.1 0.70% Specialty Finance-commercial................................ 11.7 0.84% 13.4 0.68% Commercial Finance.......................................... 16.6 0.80% 11.3 0.55% ------ ----- Total Commercial Segments................................. 90.4 1.32% 46.8 0.62% Specialty Finance-consumer.................................. 13.4 1.70% 13.3 1.25% ------ ----- Total..................................................... $103.8 1.36% $60.1 0.70% ====== =====
The increased net charge-offs from the prior year, both in amount and percentage, resulted from general economic weakness that caused higher net charge-offs in virtually all of our business segments. The higher net charge-off percentages in relation to the prior year also reflect the $2.2 billion in receivables in liquidation status as of December 31, 2001, which include trucking, franchise, inventory finance, manufactured housing and recreational vehicle receivables. Net charge-offs, both in amount and as a percentage of average finance receivables, are shown for the liquidating and core portfolios for the quarter ended December 31, 2001 in the following table ($ in millions):
QUARTER ENDED DECEMBER 31, 2001 ----------------------------------------------------------------------- CORE LIQUIDATING TOTAL ------------------- ------------------- ------------------- Equipment Financing and Leasing............... $26.4 1.05% $35.7 11.24% $ 62.1 2.19% Specialty Finance--commercial................. 8.1 0.61% 3.6 5.37% 11.7 0.84% Commercial Finance............................ 16.6 0.80% -- -- 16.6 0.80% ----- ----- ------ Total Commercial Segments................... 51.1 0.79% 39.3 10.22% 90.4 1.32% Specialty Finance--consumer................... 5.6 0.93% 7.8 4.35% 13.4 1.70% ----- ----- ------ Total....................................... $56.7 0.80% $47.1 8.36% $103.8 1.36% ===== ===== ======
The reserve for credit losses is periodically reviewed for adequacy considering economic conditions, collateral values and credit quality indicators, including charge-off experience, and levels of past due loans and non-performing assets. The reserve increased to $472.1 million (1.62% of finance receivables) at December 31, 2001 as compared to $471.7 million (1.53% of finance receivables) at September 30, 2001 and $468.5 million (1.40% of finance receivables) at December 31, 2000. Although owned receivables declined by approximately $1.6 billion during the quarter ended December 31, 2001, the reserve was relatively unchanged in dollar amount, but increased significantly as a percentage of finance receivables due to continuing weak economic conditions. OTHER REVENUE The components of other revenue are as follows ($ in millions):
QUARTER ENDED DECEMBER 31, --------------------------- 2001 2000 ----------- ------------- (SUCCESSOR) (PREDECESSOR) Fees and other income................................. $170.0 $111.6 Factoring commissions................................. 38.3 38.8 Gains on securitizations.............................. 28.0 40.6 Gains (losses) on venture capital investments......... 2.6 (6.1) Gains on sales of leasing equipment................... 2.3 32.4 ------ ------ Total............................................... $241.2 $217.3 ====== ======
21 Other revenue was $241.2 million for the quarter ended December 31, 2001, versus $217.3 million during the quarter ended December 31, 2000, as increased fees and other income, which includes miscellaneous fees, syndication fees and gains from receivable sales, more than offset lower equipment sale gains. The increase in fees and other income was broad based, including our Equipment Financing and Leasing, Commercial Finance and Specialty Finance segments. Revenues from our consumer whole loan sale operations were relatively unchanged year over year. Securitization gains for the quarter ended December 31, 2001 were $28.0 million, or 7.2% of pre-tax income on $1.2 billion of volume securitized, compared to $40.6 million or 15.5% of pre-tax income on $1.2 billion of volume in the prior year quarter. The lower gains compared to the 2000 quarter were primarily the result of product mix differences. SALARIES AND GENERAL OPERATING EXPENSES Salaries and general operating expenses were $210.3 million for the quarter ended December 31, 2001, versus $259.3 million for the quarter ended December 31, 2000. The decrease is due to corporate staff reductions, business restructurings, as well as the sale of certain international businesses to a non-U.S. subsidiary of Tyco on September 30, 2001. As a result, both the efficiency ratio and the ratio of salaries and general operating expenses to average managed assets ("AMA") improved in 2001 as set forth in the following table:
QUARTER ENDED DECEMBER 31, --------------------------- 2001 2000 ----------- ------------- (SUCCESSOR) (PREDECESSOR) Efficiency ratio(1)................................... 29.8% 42.7% Salaries and general operating expenses as a percent of AMA(2)........................................... 1.84% 1.97%
- ------------------------------ (1) Efficiency ratio is the ratio of salaries and general operating expenses to operating margin excluding the provision for credit losses. (2) "AMA" means average managed assets, which is average earning assets plus the average of finance receivables previously securitized and still managed by us. The improvement in the efficiency ratio in 2001 over 2000 is a result of strong margins and fee income and cost reductions. Management continues to target an efficiency ratio in the mid 30% area. GOODWILL AND OTHER INTANGIBLE ASSETS AMORTIZATION As a result of the adoption of SFAS 142, there was no goodwill amortization for the quarter ended December 31, 2001, versus $22.5 million, before taxes, in the prior year quarter. Goodwill increased $287.6 million from September 30, 2001 to $6,857.1 million, reflecting valuation adjustments and liabilities recorded in conjunction with liquidation and restructuring activities as plans were finalized and approved, as well as adjustments to initial fair value estimates and purchase accounting reserves recorded related to the June 1, 2001 acquisition by Tyco. INCOME TAXES The effective income tax rate was 38.0% during the quarter ended December 31, 2001, versus 37.9% during the quarter ended December 31, 2000. FINANCING AND LEASING ASSETS Managed assets, comprised of financing and leasing assets and finance receivables previously securitized that we continue to manage, totaled $47.1 billion at December 31, 2001, down from 22 $49.0 billion at September 30, 2001, and $54.9 billion at December 31, 2000. Owned financing and leasing portfolio assets totaled $36.7 billion at December 31, 2001 compared to $38.9 billion at September 30, 2001 and $43.8 billion at December 31, 2000. The trend of declining asset levels reflects the following: (1) sales and liquidation of non-strategic assets; (2) the sale of approximately $1.8 billion of international assets to a subsidiary of Tyco at September 30, 2001; (3) the continued focus on managing down our leverage ratios; and (4) lower origination volume due to continued soft economic conditions coupled with the exit and/or liquidation of certain non-strategic businesses. During the quarter, we completed the sale of approximately $700 million in recreational vehicle receivables in the Specialty Finance--consumer segment, and the liquidation of several portfolios continued, including trucking, franchise, inventory financing, manufactured housing and recreational vehicles. The 15.7% decline in Commercial Services assets during the quarter reflected normal seasonal trends in factoring receivables. New origination volume (excluding factoring), although above the preceding quarter, remained below prior year levels by approximately 8%. The managed assets of our business segments and the corresponding strategic business units are presented in the following table ($ in millions):
DECEMBER 31, SEPTEMBER 30, 2001 2001 CHANGE PERCENT ------------ ------------- --------- -------- Equipment Financing............................... $10,310.4 $11,063.7 $ (753.3) (6.8)% Capital Finance................................... 4,979.4 4,928.7 50.7 1.0% --------- --------- --------- Total Equipment Financing and Leasing Segment..... 15,289.8 15,992.4 (702.6) (4.4)% --------- --------- --------- Specialty Finance: Commercial...................................... 7,118.8 6,979.7 139.1 2.0% Consumer........................................ 3,775.9 4,203.4 (427.5) (10.2)% --------- --------- --------- Total Specialty Finance Segment................... 10,894.7 11,183.1 (288.4) (2.6)% --------- --------- --------- Commercial Services............................... 4,300.8 5,099.4 (798.6) (15.7)% Business Credit................................... 3,541.0 3,544.9 (3.9) (0.1)% --------- --------- --------- Total Commercial Finance Segment.................. 7,841.8 8,644.3 (802.5) (9.3)% --------- --------- --------- Structured Finance Segment........................ 2,661.5 3,068.4 (406.9) (13.3)% --------- --------- --------- TOTAL FINANCING AND LEASING PORTFOLIO ASSETS...... 36,687.8 38,888.2 (2,200.4) (5.7)% Finance receivables previously securitized and still managed by us............................. 10,442.2 10,147.9 294.3 2.9% --------- --------- --------- TOTAL MANAGED ASSETS.............................. $47,130.0 $49,036.1 $(1,906.1) (3.9)% ========= ========= =========
In addition on September 30, 2001, certain international subsidiaries of CIT, with financing and leasing assets of approximately $1.8 billion, were sold to an affiliate of Tyco. On February 11, 2002 CIT repurchased these international subsidiaries. The receivable from affiliate of $1.6 billion on the Consolidated Balance Sheet at December 31, 2001 has been satisfied. PAST DUE AND NON-PERFORMING ASSETS The following table sets forth certain information concerning our past due (sixty days or more) and non-performing assets (finance receivables on non-accrual status and assets received in satisfaction of 23 loans) and the related percentages of finance receivables at December 31, 2001 and September 30, 2001.
DECEMBER 31, 2001 SEPTEMBER 30, 2001 ------------------- ------------------- Finance receivables, past due 60 days or more: Equipment Financing and Leasing...................... $ 471.8 4.36% $ 466.5 4.08% Specialty Finance-commercial......................... 213.8 3.90% 188.5 3.39% Commercial Finance................................... 197.7 2.52% 151.4 1.75% Structured Finance................................... 37.7 1.95% 38.3 1.83% -------- -------- Total Commercial................................... 921.0 3.53% 844.7 3.05% Specialty Finance-consumer........................... 183.1 5.88% 188.2 6.12% -------- -------- Total.............................................. $1,104.1 3.78% $1,032.9 3.35% ======== ======== Non-performing assets: Equipment Financing and Leasing...................... $ 421.0 3.89% $ 457.3 4.00% Specialty Finance-commercial......................... 112.4 2.05% 87.0 1.57% Commercial Finance................................... 144.6 1.84% 105.6 1.22% Structured Finance................................... 92.2 4.76% 110.0 5.27% -------- -------- Total Commercial................................... 770.2 2.95% 759.9 2.74% Specialty Finance-consumer........................... 170.3 5.47% 169.4 5.51% -------- -------- Total.............................................. $ 940.5 3.22% $ 929.3 3.02% ======== ========
Past due and non-performing assets increased as a percentage of finance receivables from September 30, 2001 as a result of weak economic conditions and the lower asset levels in the current quarter due to asset sales and liquidations. Commercial Finance past dues and non-performing assets increased due to continued weakness in the retail and manufacturing sectors. CONCENTRATIONS Our ten largest financing and leasing asset accounts in the aggregate accounted for 4.1% of our total financing and leasing assets at December 31, 2001 (with the largest account representing less than 1%), all of which are commercial accounts secured by either equipment, accounts receivable or inventory. At December 31 and September 30, 2001, our managed asset geographic diversity did not differ significantly from our owned asset geographic diversity. Our financing and leasing asset portfolio in North America is diversified by region. At December 31, 2001, with the exception of California (11.5%), New York (9.2%), and Texas (7.7%), no state or province within any region represented more than 4.5% of owned financing and leasing assets. Our December 2001 managed and owned asset geographic composition did not significantly differ from our September 2001 managed and owned asset geographic composition. Financing and leasing assets to foreign obligors other than Canada totaled $3.1 billion at both December 31 and September 30, 2001. Our foreign exposure was geographically dispersed, with no other individual country exposure greater than 1.0% of financing and leasing assets at each period. On February 11, 2002, CIT repurchased certain international subsidiaries, previously sold to an affiliate of Tyco. At December 31, 2001 we had approximately $200 million of US Dollar-denominated loans and assets outstanding to customers located or doing business in Argentina. The Argentine government has recently instituted economic reforms, including the conversion of certain dollar-denominated loans into pesos. We are currently assessing the impact of these government actions on our US Dollar-denominated loans and assets and reserve for credit losses. 24 LIQUIDITY RISK MANAGEMENT As discussed in Note 9, on February 5, 2002, we drew down our $8.5 billion unsecured bank credit facilities, which have historically been maintained as liquidity support for our commercial paper programs. The proceeds are being used to satisfy outstanding commercial paper obligations at the scheduled maturities. The facilities are revolving credit and floating-rate term bank loans. The maturities of the facilities are as follows: $4.0 billion in March 2002 (with a one year term-out option to convert the maturity to March 2003), $0.8 billion in April 2003 and $3.7 billion in March 2005. Weighted-average interest on the facilities is approximately LIBOR plus 31 basis points. We expect to return to the commercial paper market at some time in the future with a dealer-based program. This draw down followed Tyco's announcement of plans to separate into four independent public companies, as well as a similar draw down of bank lines by Tyco. Following the downgrade of Tyco, each of our ratings were downgraded by Standard & Poor's and Fitch, while Moody's confirmed our ratings, resulting in the ratings shown in the following table:
AT DECEMBER 31, 2001 AT FEBRUARY 13, 2002 ---------------------- ---------------------- SHORT TERM LONG TERM SHORT TERM LONG TERM ---------- --------- ---------- --------- Moody's.................................... P-1 A2 P-1 A2 Standard & Poor's.......................... A-1 A+ A-2 A- Fitch...................................... F1 A+ F2 A-
- ------------------------ THE SECURITY RATINGS STATED ABOVE ARE NOT A RECOMMENDATION TO BUY, SELL OR HOLD SECURITIES AND MAY BE SUBJECT TO REVISION OR WITHDRAWAL BY THE ASSIGNING RATING ORGANIZATION. EACH RATING SHOULD BE EVALUATED INDEPENDENTLY OF ANY OTHER RATING. On February 4, 2002, we announced that we are undertaking several initiatives to strengthen our financial position. These initiatives include: plans to establish new securitization facilities that provide access to approximately $3.0 billion of financing; plans to establish a dealer group for our commercial paper program; and plans to amend existing public debt indentures to limit or restrict intercompany transactions with Tyco, including prohibiting the extension of loans and payment of dividends. The contractual maturities of our commercial paper and term debt from February 4, 2002 to September 30, 2002 is shown in the following table ($ in millions):
JULY- FEBRUARY MARCH APRIL MAY JUNE SEPTEMBER TOTAL -------- -------- -------- -------- -------- --------- --------- Commercial paper maturities(1)........ $5,169.0 $2,777.0 $ 471.0 $ 154.0 $ -- $ 32.0 $ 8,603.0 Term debt maturities.................. 375.0 301.0 1,446.0 1,104.0 823.0 2,033.0 6,082.0 -------- -------- -------- -------- ------ -------- --------- Totals............................ $5,544.0 $3,078.0 $1,917.0 $1,258.0 $823.0 $2,065.0 $14,685.0 ======== ======== ======== ======== ====== ======== =========
- ------------------------------ (1) Represents commercial paper, net of overnight deposits. Our short-term liquidity plan focuses on the funds required to meet scheduled maturities of commercial paper and term debt. While we expect to access the public debt markets, the plan assumes that commercial paper maturities will be substantially paid with the $8.5 billion in proceeds from the bank lines and that funds required to meet term debt maturities will be paid via securitizations, including existing commercial equipment vehicles and the additional $3.0 billion in facilities described above. Proceeds from paydowns on our existing receivables are expected to be used to fund new portfolio volume. We expect over time to have our ratings reviewed by the rating agencies to regain cost effective access to the public debt markets. From time to time, CIT files registration statements for debt securities which it may sell in the future. At February 10, 2002, we had $14.7 billion of registered, but unissued, debt securities available 25 under a shelf registration statement and $9.6 billion of registered, but unissued, securities available under public shelf registration statements relating to our asset-backed securitization program. We expect our net finance income to decrease prospectively as a result of drawing down on bank credit facilities to repurchase outstanding commercial paper and increased costs of other alternative financing sources, as discussed above. CAPITALIZATION The following table presents information regarding our capital structure ($ in millions):
DECEMBER 31, 2001 SEPTEMBER 30, 2001 ----------------- ------------------ Commercial paper............................................ $ 7,789.7 $ 8,621.5 Term debt................................................... 25,939.9 26,780.1 Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding solely debentures of the Company ("Preferred Capital Securities")........... 259.0 260.0 Shareholder's equity(1)..................................... 10,891.1 10,661.4 --------- --------- Total capitalization........................................ 44,879.7 46,323.0 Goodwill and other intangible assets........................ (6,857.1) (6,569.5) --------- --------- Total tangible capitalization............................... $38,022.6 $39,753.5 ========= ========= Tangible shareholder's equity(1) and Preferred Capital Securities to managed assets.............................. 9.11% 8.88% Total debt (excluding overnight deposits) to tangible shareholder's equity(1) and Preferred Capital Securities................................................ 7.71x 8.06x
- ------------------------------ (1) Shareholder's equity excludes Accumulated other comprehensive loss relating to derivative financial instruments and unrealized gains on equity and securitization investments. On January 22, 2002, Tyco announced a plan to separate into four independent, publicly-traded companies. Under the plan, common shares of CIT are expected to be distributed to Tyco shareholders in the second quarter of calendar 2002. However, Tyco will consider other options, including selling CIT. On February 5, 2002, we drew down on our $8.5 billion unsecured bank credit facilities. We are using the proceeds to satisfy our outstanding commercial paper obligations at the scheduled maturities. On February 11, 2002, we repurchased the international subsidiaries, that we had previously sold to an affiliate of Tyco on September 30, 2001. In conjunction with this repurchase, the receivable of $1.6 billion with affiliates has been satisfied. SECURITIZATION AND JOINT VENTURE ACTIVITIES We utilize joint ventures and special purpose entities (SPE's) in the normal course of business to execute securitization transactions and conduct business in key vendor relationships. Securitization Transactions--SPE's are used to achieve "true sale" and bankruptcy remote requirements for these transactions in accordance with SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities." Pools of assets are originated and sold to independent trusts (the SPE's), which in turn issue securities to investors solely backed by asset pools. Accordingly, CIT has no legal obligations to repay the investment certificates in the event of a default by the Trust. CIT retains the servicing rights and participates in certain cash flows of the pools. The present value of expected net cash flows that exceeds the estimated cost of servicing is recorded in other assets as a "retained interest." Assets securitized are shown in our managed assets and our capitalization ratios on managed assets. 26 Joint Ventures--We utilize joint ventures to conduct financing activities with certain strategic vendor partners. Receivables are originated by the joint venture entity and purchased by CIT. These distinct legal entities are jointly owned by the vendor partner and CIT, and there is no third-party debt involved. These arrangements are accounted for on the equity method, with profits and losses distributed according to the joint venture agreement. Commitments and Contingencies--In the normal course of business, we grant commitments to extend additional financing and leasing asset credit and we have commitments to purchase commercial aircraft for lease to third parties. We also enter into various credit-related commitments, including letters of credit, acceptances and guarantees. These financial arrangements generate fees and involve, to varying degrees, elements of credit risk in excess of the amounts recognized on the Consolidated Balance Sheet. To minimize potential credit risk, we generally require collateral and other credit-related terms from the customer. ACCOUNTING POLICIES The preparation of financial statements in conformity with generally accepted accounting principles requires management to use judgment in making estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. The following accounting policies include inherent risks and uncertainties related to judgments and assumptions made by management. Management's estimates are based on the relevant information available at the end of each period. Investments--Investments for which the Company does not have the ability to exercise significant influence and for which there is not a readily determinable market value are accounted for under the cost method. Management uses judgment in determining when an unrealized loss is deemed to be other than temporary, in which case such loss is charged to earnings. Charge-off of Finance Receivables--Finance receivables are reviewed periodically to determine the probability of loss. Charge-offs are taken after considering such factors as the borrower's financial condition and the value of underlying collateral and guarantees (including recourse to dealers and manufacturers). Impaired Loans--Loan impairment is defined as any shortfall between the estimated value and the recorded investment in the loan, with the estimated value determined using the fair value of the collateral, if the loan is collateral dependent, or the present value of expected future cash flows discounted at the loan's effective interest rate. Retained Interests in Securitizations--Significant financial assumptions, including loan pool credit losses, prepayment speeds and discount rates, are utilized to determine the fair values of retained interests, both at the date of the securitization and in the subsequent quarterly valuations of retained interests. Any resulting losses, representing the excess of carrying value over estimated fair value, are recorded in current earnings. However, unrealized gains are reflected in shareholder's equity as part of other comprehensive income, rather than in earnings. Lease Residual Values--Operating lease equipment is carried at cost less accumulated depreciation and is depreciated to estimated residual value using the straight-line method over the lease term or projected economic life of the asset. Direct financing leases are recorded at the aggregated future minimum lease payments plus estimated residual values less unearned finance income. Management performs periodic reviews of the estimated residual values, with impairment, other than temporary, recognized in the current period. Reserve for Credit Losses--The reserve for credit losses is periodically reviewed by management for adequacy considering economic conditions, collateral values and credit quality indicators, including historical and expected charge-off experience and levels of past-due loans and non-performing assets. 27 Management uses judgment in determining the level of the consolidated reserve for credit losses and in evaluating the adequacy of the reserve. STATISTICAL DATA The following table presents components of net income as a percent of AEA, along with other selected financial data ($ in millions):
QUARTER ENDED QUARTER ENDED DECEMBER 31, DECEMBER 31, 2001 2000 ------------- ------------- (SUCCESSOR) (PREDECESSOR) FINANCE INCOME.............................................. 12.15% 13.35% Interest expense............................................ 3.91 6.26 --------- --------- Net finance income........................................ 8.24 7.09 Depreciation on operating lease equipment................... 3.03 3.34 --------- --------- Net finance margin........................................ 5.21 3.75 Provision for credit losses................................. 1.19 0.61 --------- --------- Net finance margin, after provision for credit losses....... 4.02 3.14 Other revenue............................................... 2.70 2.09 --------- --------- OPERATING MARGIN.......................................... 6.72 5.23 Salaries and general operating expenses..................... 2.36 2.49 Goodwill amortization....................................... -- 0.22 --------- --------- OPERATING EXPENSES........................................ 2.36 2.71 --------- --------- Income before income taxes................................ 4.36 2.52 Provision for income taxes.................................. (1.65) (0.95) Minority interest in subsidiary trust holding solely debentures of the Company................................. (0.03) (0.03) --------- --------- Net income................................................ 2.68% 1.54% ========= ========= Average earning assets...................................... $35,695.0 $41,669.0 ========= =========
ACCOUNTING PRONOUNCEMENTS In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations." SFAS No. 143 addresses accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This statement is effective for fiscal years beginning after June 15, 2002. We are currently assessing the impact of this new standard. In July 2001, the FASB issued SFAS No. 144, "Impairment or Disposal of Long-Lived Assets," which is effective for fiscal years beginning after December 15, 2001. The provisions of this statement provide a single accounting model for impairment of long-lived assets. We are currently assessing the impact of this new standard. FORWARD-LOOKING STATEMENTS Certain statements contained in this document are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. All statements contained herein that are not clearly historical in nature are forward-looking and the words "anticipate," "believe," "expect," "estimate" and similar expressions are generally intended to identify forward-looking statements. Any forward-looking statements contained herein, in press releases, written statements or other documents filed with the Securities and Exchange Commission or in communications and discussions with investors and analysts in the normal course of business through meetings, webcasts, phone calls and conference calls, concerning our operations, economic performance and financial 28 condition are subject to known and unknown risks, uncertainties and contingencies. Forward-looking statements are included, for example, in the discussions about: - our liquidity risk management, - our credit risk management, - our asset/liability risk management, - our separation from Tyco, and Tyco's plans with respect to such separation, - our capital, leverage and credit ratings, - our operational and legal risks, and - how we may be affected by legal proceedings. All forward-looking statements involve risks and uncertainties, many of which are beyond our control, which may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. Also, forward-looking statements are based upon management's estimates of fair values and of future costs, using currently available information. Therefore, actual results may differ materially from those expressed or implied in those statements. Factors that could cause such differences include, but are not limited to: - risks of economic slowdown, downturn or recession, - industry cycles and trends, - risks inherent in changes in market interest rates, - funding opportunities and borrowing costs, - changes in funding markets, including commercial paper, term debt and the asset-backed securitization markets, - uncertainties associated with risk management, including credit, prepayment, asset/liability, interest rate and currency risks, - adequacy of reserves for credit losses, - risks associated with the value and recoverability of leased equipment and lease residual values, - changes in regulations governing our business and operations or permissible activities, - changes in competitive factors, - future acquisitions and dispositions of businesses or asset portfolios, and - the effects, risks and uncertainties of the implementation of Tyco's plan to separate into four independent public companies. 29 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 3.4 Certificate of Amendment to the Certificate of Incorporation, effective February 8, 2001. 10.2 364-Day Credit Agreement, dated as of March 28, 2000, among CIT Group Inc. (formerly known as Tyco Capital Corporation and The CIT Group, Inc.), the banks party thereto, J.P. Morgan Securities Inc. (formerly known as Chase Securities Inc.), as Arranger, Barclays Bank PLC, Bank of America, N.A., Citibank, N.A. and The Dai-Ichi Kangyo Bank, Limited, as Syndication Agents, and JP Morgan Chase Bank (formerly known as The Chase Manhattan Bank), as Administrative Agent ("364-Day Credit Agreement"). 10.3 Amendment No. 1 to 364-Day Credit Agreement, dated as of March 27, 2001. 10.4 Assumption Agreement, dated as of June 1, 2001, to 364-Day Credit Agreement. 10.5 Additional Bank Agreement, dated as of August 1, 2000, to 364-Day Credit Agreement. 10.6 5-Year Credit Agreement, dated as of March 28, 2000, among CIT Group Inc. (formerly known as Tyco Capital Corporation and The CIT Group, Inc.), the banks party thereto, J.P. Morgan Securities Inc. (formerly known as Chase Securities Inc.), as Arranger, Barclays Bank PLC, Bank of America, N.A., Citibank, N.A. and The Dai-Ichi Kangyo Bank, Limited, as Syndication Agents, and JP Morgan Chase Bank (formerly known as The Chase Manhattan Bank), as Administrative Agent ("5 Year Credit Agreement"). 10.7 Assumption Agreement, dated as of June 1, 2001, to 5 Year Credit Agreement. 10.8 Additional Bank Agreement, dated as of August 1, 2000, to 5 Year Credit Agreement. 10.9 $765,000,000 Credit Agreement, dated as of April 13, 1998, among Capita Corporation (formerly known as AT&T Capital Corporation), as Borrower, CIT Group Inc. (formerly known as Tyco Capital Corporation and The CIT Group, Inc.), as Guarantor, the banks party thereto (the "Banks"), JP Morgan Chase Bank (formerly known as Morgan Guaranty Trust Company of New York), as Administrative Agent, Canadian Imperial Bank of Commerce, as Syndication Agent, JP Morgan Chase Bank (formerly known as The Chase Manhattan Bank) and Deutsche Bank AG, New York Branch, as Co-Documentation Agents, and J.P. Morgan Securities Inc. and CIBC Oppenheimer Corp., as Arrangers ("Capita Corporation Credit Agreement"). 10.10 Amendment No. 1 to Capita Corporation Credit Agreement, dated as of April 9, 1999. 10.11 Amendment No. 2 to Capita Corporation Credit Agreement, dated as of November 15, 1999. 10.12 Amendment No. 3 to Capita Corporation Credit Agreement, dated as of May 30, 2001. 10.13 Assumption Agreement, dated as of June 1, 2001, to Capita Corporation Credit Agreement. 10.14 Guaranty by CIT Group Inc., dated as of November 15, 1999, of Capita Corporation Credit Agreement. 10.15 364-Day Credit Agreement, dated as of March 27, 2001, among Tyco Capital (Canada) Inc. (formerly known as CIT Financial Ltd.), the banks party thereto, as lenders, Royal Bank of Canada, as Administrative Agent, and Canadian Imperial Bank of Commerce and The Chase Manhattan Bank of Canada, as Syndication Agents ("Canadian 364-Day Credit Agreement"). 10.16 Guaranty of CIT Group Inc., dated as of March 27, 2001, of Canadian 364-Day Credit Agreement. 12 Computation of Ratios of Earnings to Fixed Charges.
(b) Current Report on Form 8-K filed on October 1, 2001 reporting that the Company had changed its name and changed its fiscal year end from December 31 to September 30. Current Report on Form 8-K filed on October 22, 2001 reporting the Company's announcement of financial results for the quarter ended September 30, 2001. 30 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CIT GROUP INC. By: /s/ JOSEPH M. LEONE ----------------------------------------- Joseph M. Leone EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER PRINCIPAL ACCOUNTING AND FINANCIAL OFFICER)
Date: February 14, 2002 31 EX-3.4 3 a2069484zex-3_4.txt EXHIBIT 3.4 EXHIBIT 3.4 CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF TYCO CAPITAL CORPORATION Tyco Capital Corporation, a corporation organized under the laws of the State of Nevada, by its Executive Vice President and Assistant Secretary does hereby certify: 1. That the board of directors of said corporation passed a resolution by consent in lieu of a special meeting on the 7th day of February, 2002 declaring that the following change and amendment in the articles of incorporation is advisable. RESOLVED that Article I of said articles of incorporation be amended to read as follows: "The name of the Corporation is CIT Group Inc." FURTHER RESOLVED that this Certificate of Amendment shall be effective at 11:59 p.m. on February 8, 2002. 2. That the number of shares of the corporation outstanding and entitled to vote on an amendment to the article of incorporation is 100; that the said change and amendment has been consented to and authorized by the written consent of the sole stockholder entitled to vote thereon. IN WITNESS WHEREOF, the said Tyco Capital Corporation has caused this certificate to be signed by its Executive Vice President and its Assistant Secretary and its corporate seal to be hereto affixed this 7th day of February, 2002. TYCO CAPITAL CORPORATION (SEAL) By: ------------------------------------------- Robert J. Ingato, Executive Vice President ------------------------------------------- James P. Shanahan, Assistant Secretary STATE OF NEW JERSEY ) ) ss. COUNTY OF ESSEX ) On ___________________ personally appeared before me, Christine L. Cadmus, (date) a Notary Public for the State of New Jersey, Robert J. Ingato and James P. Shanahan, who acknowledged that they executed the above instrument. - ------------------------------------------- (Notary Public) (SEAL) EX-10.2 4 a2069484zex-10_2.txt EXHIBIT 10.2 EXHIBIT 10.2 EXECUTION COPY ================================================================================ THE CIT GROUP, INC. --------------------------------------------------------- $3,670,000,000 364-DAY CREDIT AGREEMENT Dated as of March 28, 2000 --------------------------------------------------------- CHASE SECURITIES INC., as Lead Arranger and Book Manager THE CHASE MANHATTAN BANK, as Administrative Agent BARCLAYS BANK PLC, as Syndication Agent BANK OF AMERICA, N.A., as Syndication Agent CITIBANK, N.A., as Syndication Agent THE DAI-ICHI KANGYO BANK, LIMITED, as Syndication Agent ================================================================================ TABLE OF CONTENTS
Page ---- SECTION 1. DEFINITIONS............................................................................................5 1.1. Defined Terms...................................................................................5 1.2. Other Definitional Provisions..................................................................15 SECTION 2. AMOUNT AND TERMS OF COMMITMENTS.......................................................................16 2.1. Commitments....................................................................................16 2.2. Revolving Credit Borrowing Procedure...........................................................18 2.3. Competitive Bid Borrowing Procedure............................................................19 2.4. Repayment of Loans; Evidence of Debt...........................................................21 2.5. Facility Fee; Administrative Agent's Fee.......................................................22 2.6. Utilization Fee................................................................................22 2.7. Extension of Termination Date..................................................................22 2.8. Termination or Reduction of Commitments........................................................24 2.9. Optional Prepayments of Revolving Credit Loans.................................................24 2.10. Conversion and Continuation Options............................................................24 2.11. Applicable Interest Rate Margins, Facility Fee Rate and Utilization Fee........................25 2.12. Minimum Amounts of Tranches....................................................................25 2.13. Interest Rates and Payment Dates...............................................................25 2.14. Computation of Interest and Fees...............................................................26 2.15. Inability to Determine Interest Rate...........................................................27 2.16. Pro Rata Treatment and Payments................................................................27 2.17. Illegality.....................................................................................28 2.18. Requirements of Law............................................................................28 2.19. Taxes 30 2.20. Indemnity......................................................................................32 2.21. Actions of Banks...............................................................................33 2.22. Lending Installations..........................................................................33 2.23. Removal of Banks...............................................................................33 2.24. Replacement of Banks...........................................................................34 SECTION 3. REPRESENTATIONS AND WARRANTIES........................................................................34 3.1. Financial Condition............................................................................34 3.2. No Change......................................................................................34 3.3. Corporate Existence; Compliance with Law; Significant Subsidiaries.............................34 3.4. Corporate Power; Authorization; Enforceable Obligations........................................35 3.5. No Legal Bar...................................................................................35 3.6. No Material Litigation.........................................................................35 3.7. No Default.....................................................................................35 3.8. Aggregation of the Representations and Warranties Relating to Net Worth........................35 3.9. Federal Regulations............................................................................36 3.10. ERISA 36 3.11. Investment Company Act.........................................................................36 3.12. Purpose of Loans...............................................................................36 SECTION 4. CONDITIONS PRECEDENT..................................................................................36 4.1. Conditions to Initial Loans....................................................................36 4.2. Conditions to Each Loan........................................................................37 SECTION 5. AFFIRMATIVE COVENANTS.................................................................................37 5.1. Financial Statements...........................................................................38 5.2. Payment of Obligations.........................................................................39 5.3. Conduct of Business and Maintenance of Existence...............................................39 5.4. Notices........................................................................................39 5.5. Status of Obligations..........................................................................40 5.6. Maintenance of Property........................................................................40 5.7. Payment of Taxes...............................................................................40 5.8. Use of Proceeds................................................................................40 SECTION 6. NEGATIVE COVENANTS....................................................................................41 6.1. Negative Pledge................................................................................41 6.2. Consolidations, Mergers and Sales of Assets....................................................43 6.3. Net Worth......................................................................................43 SECTION 7. EVENTS OF DEFAULT.....................................................................................43 SECTION 8. THE AGENTS............................................................................................45 8.1. Appointment....................................................................................45 8.2. Delegation of Duties...........................................................................46 8.3. Exculpatory Provisions.........................................................................46 8.4. Reliance by Administrative Agent...............................................................46 8.5. Notice of Default..............................................................................47 8.6. Non-Reliance on Administrative Agent and Other Banks...........................................47 8.7. Indemnification................................................................................47 8.8. Administrative Agent in Its Individual Capacity................................................48 8.9. Successor Administrative Agent.................................................................48 SECTION 9. MISCELLANEOUS.........................................................................................49 9.1. Amendments and Waivers.........................................................................49 9.2. Notices........................................................................................49 9.3. No Waiver; Cumulative Remedies.................................................................50 9.4. Survival of Representations and Warranties.....................................................50 9.5. Payment of Expenses and Taxes..................................................................50 9.6. Successors and Assigns; Participations; Purchasing Banks.......................................51 9.7. Dissemination of Information; Confidentiality..................................................53 9.8. Adjustments....................................................................................54 9.9. Counterparts...................................................................................55 9.10. Severability...................................................................................55 9.11. Integration....................................................................................55 9.12. GOVERNING LAW..................................................................................55 9.13. Submission To Jurisdiction; Waivers............................................................55 9.14. WAIVERS OF JURY TRIAL..........................................................................56 SCHEDULES I. Commitments and Bank Information II. List of Significant Subsidiaries EXHIBITS A-1 Form of Revolving Credit Note A-2 Form of Competitive Bid Note B-1 Form of Opinion of Counsel to the Company B-2 Form of Opinion of Simpson Thacher & Bartlett C Form of Commitment Transfer Supplement D-1 Form of Officer's Certificate D-2 Form of Secretary's Certificate E Form of Incumbency Certificate F Form of Borrowing Notice G Form of Competitive Bid Request H Form of Notice of Competitive Bid Request I Form of Competitive Bid J Form of Competitive Bid Accept/Reject Letter K Form of Exemption Certificate
364-DAY CREDIT AGREEMENT, dated as of March 28, 2000, among THE CIT GROUP, INC., a Delaware corporation (the "COMPANY"), the several banks and other financial institutions from time to time on Schedule I to this Agreement (the "BANKS"), CHASE SECURITIES INC., as sole arranger and book manager (in such capacity, the "ARRANGER"), BARCLAYS BANK PLC, BANK OF AMERICA, N.A., CITIBANK, N.A. and THE DAI-ICHI KANGYO BANK, LIMITED, as syndication agents (in such capacity, the "SYNDICATION AGENTS") and THE CHASE MANHATTAN BANK ("CHASE"), as administrative agent (in such capacity, the "ADMINISTRATIVE AGENT"). W I T N E S S E T H: WHEREAS, the Company has requested $3,670,000,000 in senior unsecured revolving credit facilities from the Banks for general corporate purposes; and WHEREAS, the Banks are willing to provide the requested senior unsecured revolving credit facilities on the terms and conditions set forth herein ; NOW, THEREFORE, the parties hereto hereby agree as follows: SECTION 1. DEFINITIONS 1.1. DEFINED TERMS As used in this Agreement, the following terms shall have the following meanings: "ADDITIONAL BANK": as defined in subsection 2.1(c)(ii). "ADDITIONAL BANK AGREEMENT": as defined in subsection 2.1(c)(ii). "ADMINISTRATIVE AGENT": as defined in the preamble hereto. "AFFILIATE": as to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. "AGENTS": the collective reference to the Administrative Agent, the Syndication Agents and the Arranger. "AGGREGATE AVAILABLE COMMITMENT": at any time, the excess, if any, of (a) the Aggregate Commitment over (b) the aggregate principal amount of all Loans then outstanding. "AGGREGATE COMMITMENT": the aggregate amount of the Banks' Commitments. "AGGREGATE FACILITIES COMMITMENT": the sum of (a) the Aggregate Commitment PLUS (b) the 5-Year Aggregate Commitment. "AGREEMENT": this 364-Day Credit Agreement, as amended, supplemented or otherwise modified from time to time. "AGREEMENT ACCOUNTING PRINCIPLES": GAAP applied in a manner consistent with those principles used in the preparation of the financial statements referred to in subsection 3.1. "APPLICABLE EURODOLLAR MARGIN": as defined in subsection 2.11. "APPLICABLE FACILITY FEE RATE": as defined in subsection 2.11. "APPLICABLE MARGIN": as defined in subsection 2.11. "APPLICABLE RATE": as defined in subsection 2.11. "APPLICABLE UTILIZATION FEE RATE": as defined in subsection 2.11. "ARRANGER": as defined in the preamble hereto. "BANKS": as defined in the preamble hereto. "BARCLAYS": Barclays Bank PLC. "BASE RATE": a rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the Corporate Base Rate in effect on such day, and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. If for any reason the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any reason, including the inability of the Administrative Agent to obtain sufficient quotations in accordance with the terms hereof, the Base Rate shall be determined without regard to clause (b) of the first sentence of this definition until the circumstances giving rise to such inability no longer exist. Any change in the Base Rate due to a change in the Corporate Base Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change in the Corporate Base Rate or the Federal Funds Effective Rate, respectively. The Administrative Agent will give notice promptly to the Company and the Banks of changes in the Base Rate. "BASE RATE LOAN": any Revolving Credit Loan bearing interest at a rate determined by reference to the Base Rate in accordance with Section 2. "BOFA": Bank of America, N.A. "BORROWING": a group of Loans of a single type made by the Banks (or, in the case of a Competitive Bid Borrowing, by the Bank or Banks whose Competitive Bids have been accepted pursuant to subsection 2.3) on a single date and as to which a single Interest Period is in effect. "BORROWING DATE": a date on which a Borrowing is made hereunder. "BUSINESS DAY": a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close. "CHASE": as defined in the preamble hereto. "CITIBANK": Citibank, N.A. "CLOSING DATE": the date on which the conditions precedent set forth in subsection 4.1 are satisfied. "CODE": the Internal Revenue Code of 1986, as amended from time to time. "COMMITMENT": as to any Bank, the obligation of such Bank to make Revolving Credit Loans to the Company hereunder in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Bank's name on Schedule I, as the same may be increased from time to time in accordance with subsection 2.1(c) or decreased or terminated from time to time in accordance with subsection 2.8. "COMMITMENT INCREASE SUPPLEMENT": as defined in subsection 2.1(c)(ii). "COMMITMENT PERCENTAGE": as to any Bank at any time, the percentage of the Aggregate Commitment then constituted by such Bank's Commitment, or, at any time after the Commitments shall have expired or terminated, the percentage which the aggregate principal amount of such Bank's Loans then outstanding constitutes of the aggregate principal amount of the Loans then outstanding. "COMMITMENT PERIOD": the period from and including the date hereof to but not including the Termination Date or such earlier date on which the Aggregate Commitment shall terminate as provided herein. "COMMITMENT TRANSFER SUPPLEMENT": as defined in subsection 9.6(c) hereto. "COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated, which is under common control with the Company within the meaning of Section 4001 of ERISA or is part of a group which includes the Company and which is treated as a single employer under Section 414 of the Code. "COMPETITIVE BID": an offer by a Bank to make a Competitive Bid Loan pursuant to subsection 2.3. "COMPETITIVE BID ACCEPT/REJECT LETTER": a notification made by the Company pursuant to subsection 2.3(d) in the form of Exhibit J. "COMPETITIVE BID BORROWING": a Borrowing consisting of a Competitive Bid Loan or concurrent Competitive Bid Loans from the Bank or Banks whose Competitive Bids for such Borrowing have been accepted by the Company under the bidding procedure described in subsection 2.3. "COMPETITIVE BID LOAN": a Loan made by a Bank to the Company pursuant to the bidding procedure described in subsection 2.3. Each Competitive Bid Loan shall be a Eurodollar Competitive Bid Loan or a Fixed Rate Loan. "COMPETITIVE BID MATURITY DATE": as to each Competitive Bid Loan, the maturity date specified by the Company for such Competitive Bid Loan in the related Competitive Bid Request. "COMPETITIVE BID RATE": as to any Competitive Bid made by a Bank pursuant to subsection 2.3(b), (i) in the case of a Eurodollar Competitive Bid Loan, the Margin, and (ii) in the case of a Fixed Rate Loan, the fixed rate of interest offered by the Bank making such Competitive Bid. "COMPETITIVE BID REQUEST": a request made pursuant to subsection 2.3 in the form of Exhibit G. "CONTINUING BANKS": as defined in subsection 2.7(a). "CONTRACTUAL OBLIGATION": as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound. "CORPORATE BASE RATE": the rate of interest from time to time announced by Chase at its principal office as its prime commercial lending rate. "DEFAULT": any of the events specified in Section 7, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "DKB": The Dai-Ichi Kangyo Bank, Limited. "DOLLARS" and "$": dollars in lawful currency of the United States. "ERISA": the Employee Retirement Income Security Act of 1974, as amended from time to time. "EURODOLLAR BORROWING": a Borrowing comprised of Eurodollar Loans. "EURODOLLAR COMPETITIVE BID BORROWING": a Borrowing comprised of Eurodollar Competitive Bid Loans. "EURODOLLAR COMPETITIVE BID LOAN": any Competitive Bid Loan bearing interest at a rate determined by reference to the Eurodollar Rate in accordance with the provisions of Section 2. "EURODOLLAR LOAN": any Eurodollar Competitive Bid Loan or Eurodollar Revolving Credit Loan. "EURODOLLAR RATE": with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate of interest determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London time, two Working Days prior to the beginning of such Interest Period. In the event that such rate does not appear on Page 3750 of the Telerate screen (or otherwise on such screen), the "EURODOLLAR RATE" shall be determined by reference to such other publicly available service for displaying eurodollar rates as may be agreed upon by the Administrative Agent and the Company or, in the absence of such agreement, the "EURODOLLAR RATE" shall instead be the rate per annum equal to the average (rounded to the nearest 1/100th of 1%) of the respective rates notified to the Administrative Agent by each of the Reference Banks as the rate at which such Reference Bank is offered Dollar deposits at or about 10:00 A.M., New York City time, two Business Days prior to the beginning of such Interest Period in the interbank eurodollar market where the eurodollar and foreign currency and exchange operations in respect of its Eurodollar Loans are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein and in an amount comparable to the amount of its Eurodollar Loan to be outstanding during such Interest Period. "EURODOLLAR REVOLVING CREDIT BORROWING": a Borrowing comprised of Eurodollar Revolving Credit Loans. "EURODOLLAR REVOLVING CREDIT LOAN": any Revolving Credit Loan bearing interest at a rate determined by reference to the Eurodollar Rate in accordance with the provisions of Section 2. "EVENT OF DEFAULT": any of the events specified in Section 7, PROVIDED that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "EXISTING CREDIT AGREEMENTS": (i) $1,740,000,000 Third Amended and Restated Credit Agreement, dated as of April 23, 1999, among the Company, the lenders party thereto and The Chase Manhattan Bank, as administrative agent; (ii) $1,535,000,000 Amended and Restated Credit Agreement, dated as of April 9, 1999, among AT&T Capital Corporation, Newcourt Credit Group, Inc., Newcourt Credit Group USA Inc., the lenders party thereto and Morgan Guaranty Trust Company of New York, as administrative agent; and (iii) $3,720,000,000 Amended and Restated Credit Agreement, dated as of April 25, 1997, among the Company, the lenders party thereto and The Chase Manhattan Bank, as administrative agent. "EXTENSION NOTICE": as defined in subsection 2.7(a). "FEDERAL FUNDS EFFECTIVE RATE": for any day, a rate per annum equal to (i) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the preceding Business Day) by the Federal Reserve Bank of New York; or (ii) if such rate is not so published for any day which is a Business Day, the average of the quotations for such day at approximately 10:00 A.M., New York City time, on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it. "FEE PAYMENT DATE": the last day of each calendar quarter, commencing March 31, 2000, the Termination Date and the Maturity Date. "FINANCING LEASE": any lease of property, real or personal, the obligations of the lessee in respect of which are required in accordance with GAAP to be capitalized on a balance sheet of the lessee. "5-YEAR AGGREGATE COMMITMENT": the aggregate commitment of the banks party to the 5-Year Credit Agreement to make loans to the Company pursuant to the terms thereof. "5-YEAR CREDIT AGREEMENT": the 5-Year Credit Agreement, dated as of March 28, 2000, among the Company, the banks parties thereto, Barclays Bank PLC, Bank of America, N.A., Citibank, N.A. and The Dai-Ichi Kangyo Bank, Limited, as syndication agents, and Chase, as administrative agent. "FIXED RATE BORROWING": a Borrowing comprised of Fixed Rate Loans. "FIXED RATE LOAN": any Competitive Bid Loan bearing interest at a fixed percentage rate per annum (expressed in the form of a decimal to no more than four decimal places) specified by the Bank making such Loan in its Competitive Bid. "GAAP": generally accepted accounting principles in the United States in effect from time to time. "GOVERNMENTAL AUTHORITY": any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "HEDGING AGREEMENT": any swap, cap, collar, floor or other hedging agreement in respect of interest rates or currency exchange rates. For purposes of this Agreement, the amount of any obligations or liabilities in respect of any Hedging Agreement shall be the amounts, including any termination payments, that would be required to be paid to a counterparty upon early termination (in accordance with customary industry standards) rather than any notional amount with regard to which payments may be calculated. "INCREASING BANK": as defined in subsection 2.1(c)(ii). "INDEBTEDNESS": of a Person means such Person's (i) obligations for borrowed money, (ii) obligations representing the deferred purchase price of property or services other than accounts payable arising in the ordinary course of such Person's business, (iii) obligations, whether or not assumed, secured by Liens on property now or hereafter owned or acquired by such Person (other than carriers', warehousemen's, mechanics', repairmen's or other like nonconsensual statutory Liens arising in the ordinary course of business), (iv) obligations which are evidenced by notes, acceptances, or other similar instruments, (v) capitalized lease obligations, (vi) contingent obligations with respect to the Indebtedness of another Person, including but not limited to the obligation or liability of another which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes contingently liable upon; PROVIDED that any Indebtedness owing by the Company to any of its Subsidiaries or by any Subsidiary of the Company to the Company or by any Subsidiary of the Company to any other Subsidiary of the Company or any contingent obligation in respect thereof shall not constitute Indebtedness for purposes of this Agreement, and (vii) obligations for which such Person is obligated in respect of a letter of credit. For purposes of this Agreement, Indebtedness shall not include (A) any indebtedness of such Person to the extent (I) such indebtedness does not appear on the financial statement of such Person, (II) such indebtedness is recourse only to certain assets of such Person, and (III) the assets to which such indebtedness is recourse only appear on the financial statements of such Person net of such indebtedness, or (B) any indebtedness or other obligations issued by any Person (or by a trust or other entity established by such Person or any of its affiliates) which are primarily serviced by the cash flows of a discrete pool of receivables, leases or other financial assets which have been sold or transferred by the Company or any Subsidiary in securitization transactions which, in accordance with GAAP, are accounted for as sales for financial reporting purposes. It is understood and agreed that (1) the amount of any Indebtedness described in clause (iii) for which recourse is limited to certain property of such Person shall be the lower of (x) the amount of the obligation and (y) the fair market value of the property of such Person securing such obligation, and (2) the amount of any obligation described in clause (vi) shall be the lower of (x) the stated or determinable amount of the primary obligation in respect of which such contingent obligation is made, and (y) the maximum amount for which such Person may be liable pursuant to the terms of the agreement embodying such contingent obligation unless such primary obligation and the maximum amount for which such Person may be liable are not stated or determinable, in which case the amount of such contingent obligation shall be such Person's maximum, reasonably anticipated liability in respect thereof as determined by such Person in good faith. "INSOLVENCY": with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA. "INTEREST PAYMENT DATE": (a) as to any Base Rate Loan, the last day of each calendar quarter during which such Loan is outstanding and the Termination Date, and (b) as to any Loan other than a Base Rate Loan, the last day of the Interest Period applicable thereto and, in the case of a Eurodollar Loan with an Interest Period of more than three months, each day that would have been an Interest Payment Date for such Loan had successive Interest Periods of three months been applicable to such Loan and, in addition, the date the Company converts any Loan into a Loan of a different Type or having a different Interest Period. "INTEREST PERIOD": (a) with respect to any Eurodollar Loan, (i) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Company in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and (ii) thereafter in the case of a Eurodollar Revolving Credit Loan, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Company by irrevocable notice to the Administrative Agent not less than three Working Days prior to the last day of the then current Interest Period with respect thereto; and (b) with respect to any Fixed Rate Loan, the period commencing on the date of such Loan and ending on the date specified in the Competitive Bids in which the offer to make the Fixed Rate Loans comprising such Borrowing were extended, which shall not be earlier than fifteen days after the date of such Loan; PROVIDED that all of the foregoing provisions relating to Interest Periods are subject to the following: (A) if any Interest Period pertaining to a Eurodollar Loan would otherwise end on a day that is not a Working Day, such Interest Period shall be extended to the next succeeding Working Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Working Day; (B) any Interest Period that would otherwise extend beyond the Maturity Date shall end on the Maturity Date; and (C) any Interest Period pertaining to a Eurodollar Loan that begins on the last Working Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Working Day of a calendar month. "LENDING INSTALLATION": any branch or office of any Bank selected by such Bank to be a Lending Installation in accordance with subsection 2.22. "LIEN": any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Financing Lease having substantially the same economic effect as any of the foregoing). "LOAN": a Competitive Bid Loan, or a Revolving Credit Loan, whether made as a Eurodollar Loan, a Fixed Rate Loan or a Base Rate Loan, as permitted hereby. "LT RATING": the rating of senior, unsecured long-term indebtedness for borrowed money of the Company, without third-party credit enhancement. "MARGIN": as to any Eurodollar Competitive Bid Loan, the margin (expressed as a percentage rate per annum in the form of a decimal to no more than four decimal places) to be added to or subtracted from the Eurodollar Rate to determine the interest rate applicable to such Loan, as specified in the Competitive Bid relating to such Loan. "MATERIAL ADVERSE EFFECT": (a) a material adverse effect on the ability of the Company to perform its obligations under this Agreement (other than any such material adverse effect arising as a result of a general disruption in capital markets), or (b) a material adverse effect on the validity or enforceability against the Company of this Agreement or the material rights or remedies of the Administrative Agent or the Banks hereunder. "MATURITY DATE": the first anniversary of the Termination Date (as extended from time to time). "MOODY'S": Moody's Investors Service, Inc. and its successors. "MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA. "NET WORTH": at any date of determination, total shareholders' equity of the Company and its Subsidiaries on a consolidated basis determined in accordance with Agreement Accounting Principles. "NON-EXTENDING BANKS": as defined in subsection 2.7(a). "OTHER BANK": as defined in subsection 2.1(c)(i). "PARTICIPANT": as defined in subsection 9.6(b). "PBGC": the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA. "PERSON": an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature. "PLAN": at a particular time, any employee benefit plan which is covered by ERISA and in respect of which the Company or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA. "REFERENCE BANKS": Chase, Barclays, BofA, Citibank and DKB. "REGISTER": as defined in subsection 9.6(d). "REGULATION U": Regulation U of the Board of Governors of the Federal Reserve System. "REORGANIZATION": with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA. "REPORTABLE EVENT": any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day notice period is waived under subsection .23, .24, .26, .28 or .30 of PBGC Reg.ss.4043. "REQUIRED BANKS": at a particular time, Banks whose Commitment Percentages aggregate at least 51% or, if the Aggregate Commitment has been terminated or for purposes of any decision to accelerate the Loans pursuant to Section 7, Banks in the aggregate holding at least 51% of the aggregate unpaid principal amount of the outstanding Loans. "REQUIREMENT OF LAW": as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or final determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any material portion of its property or to which such Person or any material portion of its property is subject. "RESPONSIBLE OFFICER": the chief executive officer, the vice chairman, the president, any vice president of the Company or, with respect to financial matters, (a) the chief financial officer of the Company, (b) the treasurer of the Company, or (c) the controller of the Company. "REVOLVING CREDIT BORROWING": a Borrowing consisting of simultaneous Revolving Credit Loans from each of the Banks. "REVOLVING CREDIT LOAN": a revolving credit loan made by a Bank to the Company pursuant to subsection 2.1. Each Revolving Credit Loan shall be a Eurodollar Revolving Credit Loan or a Base Rate Loan. "SEC": the Securities and Exchange Commission and any succeeding or analogous governmental body or agency. "S&P": Standard and Poor's Ratings Services and its successors. "SIGNIFICANT SUBSIDIARIES": (i) any Subsidiary listed on Schedule II attached hereto, and (ii) any other Subsidiary which fits the definition of Significant Subsidiary contained in Rule 1-02 of Regulation S-X promulgated by the SEC, other than a Subsidiary that is a special purpose entity formed for the purpose of securitizing, selling for securitization or otherwise facilitating the securitization of assets of the Company or any other Subsidiary. "SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer Plan. "SUBSIDIARY": as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of the Company. "SYNDICATION AGENT": as defined in the preamble hereto. "TERMINATION DATE": March 27, 2001, as such date may be extended from time to time in accordance with subsection 2.7. "TRANCHE": the collective reference to Loans or portions thereof the Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day). "TRANSFER EFFECTIVE DATE": as defined in subsection 9.6(c) hereto. "TRANSFEREE": as defined in subsection 9.6(f). "TYPE": when used in respect of any Loan or Borrowing, means the Rate by reference to which interest on such Loan or on the Loans comprising such Borrowing is determined. For purposes hereof, "Rate" shall include the Eurodollar Rate, the Base Rate and any fixed rate. "UNITED STATES": the United States of America. "UTILIZATION FEE": as defined in subsection 2.6. "WORKING DAY": any Business Day on which dealings in foreign currencies and exchange between banks may be carried on in London, England. 1.2. OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto. (b) As used herein and in any certificate or other document made or delivered pursuant hereto, accounting terms relating to the Company and its Subsidiaries not defined in subsection 1.1 and accounting terms partly defined in subsection 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP. (c) The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, subsection, Schedule and Exhibit references are to this Agreement unless otherwise specified. (d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. SECTION 2. AMOUNT AND TERMS OF COMMITMENTS 2.1. COMMITMENTS. (a) Subject to the terms and conditions hereof, each Bank severally agrees to make Revolving Credit Loans to the Company from time to time during the Commitment Period in an aggregate principal amount at any one time outstanding not to exceed the amount of such Bank's Commitment. Notwithstanding anything to the contrary contained in this subsection 2.1, at no time shall the sum of (A) the outstanding aggregate principal amount of all Revolving Credit Loans made by all Banks plus (B) the outstanding aggregate principal amount of all Competitive Bid Loans made by all Banks exceed the Aggregate Commitment. During the Commitment Period the Company may borrow, pay or prepay and reborrow hereunder, all in accordance with the terms and conditions set forth in this Agreement. (b) The Revolving Credit Loans may from time to time be Eurodollar Revolving Credit Loans and/or Base Rate Loans, as determined by the Company and notified to the Administrative Agent in accordance with subsections 2.2 and 2.10, PROVIDED that no Loan shall be made as a Eurodollar Revolving Credit Loan after the day that is one month prior to the Termination Date. (c) (i) Notwithstanding anything to the contrary contained in this Agreement, the Company may request from time to time that the Aggregate Facilities Commitment be increased by an amount not less than $50,000,000 or a whole multiple of $10,000,000 in excess thereof, PROVIDED that (A) the Company may only request such an increase once in any six-month period and in no event shall the Aggregate Facilities Commitment exceed $10,000,000,000 and (B) the Aggregate Commitment and the 5-Year Aggregate Commitment, if the 5-Year Credit Agreement is in effect, shall be increased PRO RATA as a result of any such request. Such increase in the Aggregate Commitment shall be effected as follows: the Company may (I) request one or more of the Banks to increase the amount of its Commitment (which request shall be in writing and sent to the Administrative Agent to forward to such Bank or Banks) and/or (II) arrange for one or more banks or financial institutions not a party hereto (an "OTHER BANK") to become parties to and lenders under this Agreement, PROVIDED that (w) the Agent shall have approved such Other Bank, which approval shall not be unreasonably withheld, (x) the minimum Commitment of such Other Bank equals or exceeds $15,000,000, (y) after giving effect to such increase, no Bank shall have a Commitment hereunder which exceeds an amount equal to 20% of the Aggregate Commitment and (z) each Bank (including each Increasing Bank and Additional Bank) shall commit to make loans PRO RATA pursuant to this Agreement and the 5-Year Credit Agreement, if such agreement is in effect. In no event may any Bank's Commitment be increased without the prior written consent of such Bank, and the failure of any Bank to respond to the Company's request for an increase shall be deemed a rejection by such Bank of the Company's request. The Aggregate Commitment may not be increased if, at the time of any proposed increase hereunder, a Default or Event of Default has occurred and is continuing, or either of the Company's LT Ratings from Moody's or S&P are less than A3 or A-, respectively. Upon any request by the Company to increase the Aggregate Commitment hereunder, the Company shall be deemed to have represented and warranted on and as of the date of such request that no Default or Event of Default has occurred and is continuing. Notwithstanding anything contained in this Agreement to the contrary, no Bank shall have any obligation whatsoever to increase the amount of its Commitment, and each Bank may at its option, unconditionally and without cause, decline to increase its Commitment. (ii) If any Bank is willing, in its sole and absolute discretion, to increase the amount of its Commitment hereunder (such a Bank hereinafter referred to as an "Increasing Bank"), it shall enter into a written agreement to that effect with the Company and the Administrative Agent, in form and substance reasonably satisfactory to the Administrative Agent (a "Commitment Increase Supplement"), which agreement shall specify, among other things, the amount of the increased Commitment of such Increasing Bank. Upon the effectiveness of such Increasing Bank's increase in Commitment, Schedule I hereto shall, without further action, be deemed to have been amended as appropriate to reflect the increased Commitment of such Increasing Bank. Any Other Bank which is willing to become a party hereto and a lender hereunder and that has been approved by the Agent (which approval shall not be unreasonably withheld) shall enter into a written agreement with the Company and the Administrative Agent, in form and substance reasonably satisfactory to the Administrative Agent (an "Additional Bank Agreement"), which agreement shall specify, among other things, its Commitment hereunder. When such Other Bank becomes a Bank hereunder as set forth in the Additional Bank Agreement, Schedule I shall, without further action, be deemed to have been amended as appropriate to reflect the Commitment of such Other Bank. Upon the execution by the Administrative Agent, the Company and such Other Bank of such Additional Bank Agreement, such Other Bank shall become and be deemed a party hereto and a "Bank" hereunder for all purposes hereof and shall enjoy all rights and assume all obligations on the part of the Banks set forth in this Agreement, and its Commitment shall be the amount specified in its Additional Bank Agreement. Each Other Bank which executes and delivers an Additional Bank Agreement and becomes a party hereto and a "Bank" hereunder pursuant to such Additional Bank Agreement is hereinafter referred to as an "Additional Bank." (iii) In no event shall an increase in a Bank's Commitment or the Commitment of an Other Bank pursuant to this subsection 2.1(c) become effective until the Administrative Agent shall have received a favorable written opinion of counsel for the Company, addressed to the Banks, with respect to the matters set forth in paragraphs 2 and 3 of Exhibit B-1 as they relate to this Agreement and the borrowings hereunder after giving effect to the increase in the Aggregate Commitment resulting from the increase in such Bank's Commitment or the extension of a Commitment by such Other Bank. In no event shall an increase in a Bank's Commitment or the Commitment of an Other Bank which results in the Aggregate Commitment exceeding the amount which is authorized at such time in resolutions previously delivered to the Administrative Agent become effective until the Administrative Agent shall have received a copy of the resolutions, in form and substance satisfactory to the Administrative Agent, of the Board of Directors or the Executive Committee of the Board of Directors of the Company authorizing the borrowings contemplated pursuant to such increase, certified by the Secretary or an Assistant Secretary of the Company. Concurrently with the execution by an Increasing Bank of a Commitment Increase Supplement or by an Additional Bank of an Additional Bank Agreement, the Company shall make such borrowing from such Increasing Bank or Additional Bank, and/or shall make such prepayment of outstanding Revolving Credit Loans, as shall be required to cause the aggregate outstanding principal amount of Revolving Credit Loans owing to each Bank (including each such Increasing Bank and Additional Bank) to be proportional to such Bank's share of the Aggregate Commitment after giving effect to any increase thereof. The Company agrees to indemnify each Bank and to hold each Bank harmless from any loss or expense incurred as a result of any such prepayment in accordance with subsection 2.20, as applicable. (iv) No Other Bank may become an Additional Bank unless the Administrative Agent and the Company consent (which consent of the Administrative Agent shall not be unreasonably withheld) thereto by executing the Additional Bank Agreement signed by such bank or financial institution (or counterparts thereof), but no consent of any of the other Banks hereunder shall be required therefor. In no event shall the Commitment of any Bank be increased by reason of any bank or financial institution becoming an Additional Bank, or otherwise, but the Aggregate Commitment shall be increased by the amount of each Additional Bank's Commitment. Upon any Bank entering into a Commitment Increase Supplement or any Additional Bank becoming a party hereto, the Administrative Agent shall notify each other Bank thereof and shall deliver to each Bank a copy of the Additional Bank Agreement executed by such Additional Bank and the Commitment Increase Supplement executed by such Increasing Bank. (v) Notwithstanding anything to the contrary contained in this Agreement, the Aggregate Commitment shall be increased as a result of an increase in the 5-Year Aggregate Commitment pursuant to subsection 2.1(c)(i) of the 5-Year Credit Agreement. Any such increase in the Aggregate Commitment shall be made in accordance with the requirements of this subsection 2.1(c). 2.2. REVOLVING CREDIT BORROWING PROCEDURE. Subject to the terms and conditions hereof, the Company may request Revolving Credit Loans during the Commitment Period on any Working Day, if all or any part of the requested Revolving Credit Loans are to be initially Eurodollar Loans, or on any Business Day, otherwise, provided that the Company shall give the Administrative Agent irrevocable notice, substantially in the form of Exhibit F, (which notice must be received by the Administrative Agent prior to 10:00 A.M., New York City time, (a) three Working Days prior to the requested Borrowing Date, if all or any part of the requested Loans are to be initially Eurodollar Revolving Credit Loans or (b) on the Borrowing Date, otherwise), specifying (i) the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether the Borrowing is to be of Eurodollar Revolving Credit Loans, Base Rate Loans or a combination thereof and (iv) if the Borrowing is to be entirely or partly of Eurodollar Revolving Credit Loans, the amount of such Type of Loan and the length of the initial Interest Period therefor. Each Borrowing of Revolving Credit Loans shall be in an amount equal to (x) in the case of Base Rate Loans, $25,000,000 or a whole multiple of $5,000,000 in excess thereof (or, if the then Aggregate Available Commitment is less than $25,000,000, such lesser amount) and (y) in the case of Eurodollar Revolving Credit Loans, $25,000,000 or a whole multiple of $5,000,000 in excess thereof. Upon receipt of any such notice from the Company, the Administrative Agent shall promptly notify the Lending Installation of each Bank thereof. Each Bank will make the amount of its pro rata share of each Borrowing of Revolving Credit Loans available to the Administrative Agent at the office of the Administrative Agent specified in subsection 9.2 prior to 11:00 A.M., New York City time, on the Borrowing Date requested by the Company in funds immediately available to the Administrative Agent. The Administrative Agent shall make the funds so received from the Banks immediately available to the Company at the Administrative Agent's aforesaid address or to an account designated by the Company. 2.3. COMPETITIVE BID BORROWING PROCEDURE. (a) To request Competitive Bids, the Company shall deliver to the Administrative Agent a Competitive Bid Request, substantially in the form of Exhibit G, to be received by the Administrative Agent (i) in the case of a Eurodollar Competitive Bid Borrowing, not later than 10:00 a.m, New York City time, four Working Days before a proposed Competitive Bid Borrowing and (ii) in the case of a Fixed Rate Borrowing, not later than 10:00 a.m, New York City time, one Business Day before a proposed Competitive Bid Borrowing. No Base Rate Loan shall be requested in, or made pursuant to, a Competitive Bid Request. A Competitive Bid Request that does not conform substantially to the format of Exhibit G may be rejected in the Administrative Agent's sole discretion, and the Administrative Agent shall promptly notify the Company of such rejection by telecopier. Such request shall in each case refer to this Agreement and specify (x) whether the Borrowing then being requested is to be a Eurodollar Borrowing or a Fixed Rate Borrowing, (y) the date of such Borrowing (which shall be a Business Day and, in the case of a Eurodollar Competitive Bid Loan, a Working Day) and the aggregate principal amount thereof, which shall be a minimum principal amount of $25,000,000 and in an integral multiple of $5,000,000 (or an aggregate principal amount equal to the remaining balance of the available Commitments) and which will not cause the aggregate principal of all outstanding Loans to exceed the Aggregate Commitment, and (z) the Interest Period with respect thereto (which may not end after the Termination Date). The Competitive Bid Maturity Date for each Competitive Bid Loan shall be the date set forth therefor in the relevant Competitive Bid Request, which date shall be not less than fifteen days after the date of the Competitive Bid Borrowing and, in any event, shall not be later than the Termination Date. Promptly after its receipt of a Competitive Bid Request that is not rejected as aforesaid, the Administrative Agent shall invite by telecopier (in the form set forth in Exhibit H) the Banks to bid, on the terms and conditions of this Agreement, to make Competitive Bid Loans pursuant to the Competitive Bid Request. (b) Each Bank may, in its sole discretion, make one or more Competitive Bids to the Company responsive to a Competitive Bid Request. Each Competitive Bid by a Bank must be received by the Administrative Agent via telecopier, in the form of Exhibit I, (i) in the case of a Eurodollar Competitive Bid Borrowing, not later than 9:30 a.m., New York City time, three Working Days before a proposed Competitive Bid Borrowing and (ii) in the case of a Fixed Rate Borrowing, not later than 9:30 a.m., New York City time, on the Business Day of a proposed Competitive Bid Borrowing. Multiple bids will be accepted by the Administrative Agent. Competitive Bids that do not conform substantially to the format of Exhibit I may be rejected by the Administrative Agent after conferring with, and upon the instruction of, the Company, and the Administrative Agent shall notify the Bank making such nonconforming bid of such rejection as soon as practicable. Each Competitive Bid shall refer to this Agreement and specify (x) the principal amount (which shall be in a minimum principal amount of $5,000,000 and in integral multiples of $1,000,000, which may exceed such Bank's Commitment and which may equal the entire principal amount of the Competitive Bid Borrowing requested by the Company) of the Competitive Bid Loan or Loans that the applicable Bank is willing to make to the Company, (y) the Competitive Bid Rate or Rates at which such Bank is prepared to make the Competitive Bid Loan or Loans and (z) the Interest Period and the last day thereof. A Competitive Bid submitted by a Bank pursuant to this paragraph (b) shall be irrevocable. (c) The Administrative Agent shall promptly notify the Company by telecopier of all the Competitive Bids made, the Competitive Bid Rate and the principal amount of each Competitive Bid Loan in respect of which a Competitive Bid was made and the identity of the Bank that made each bid. The Administrative Agent shall send a copy of all Competitive Bids (or a summary of such bids) to the Company for its records as soon as practicable after completion of the bidding process set forth in this subsection 2.3. (d) The Company may in its sole and absolute discretion, subject only to the provisions of this paragraph (d), accept or reject any Competitive Bid referred to in paragraph (c) above. The Company shall notify the Administrative Agent by telephone, confirmed by telecopier in the form of a Competitive Bid Accept/Reject Letter, whether and to what extent it has decided to accept or reject any or all of the bids referred to in paragraph (c) above, (x) in the case of a Eurodollar Competitive Bid Borrowing, not later than 10:30 a.m., New York City time, three Business Days before a proposed Competitive Bid Borrowing and (y) in the case of a Fixed Rate Borrowing, not later than 10:30 a.m., New York City time, on the day of a proposed Competitive Bid Borrowing; PROVIDED, HOWEVER, that (i) the failure by the Company to give such notice shall be deemed to be a rejection of all the bids referred to in paragraph (c) above, (ii) the Company shall not accept a bid made at a particular Competitive Bid Rate if the Company has decided to reject a bid made at a lower Competitive Bid Rate, (iii) the aggregate amount of the Competitive Bids accepted by the Company shall not exceed the principal amount specified in the Competitive Bid Request, (iv) if the Company shall accept a bid or bids made at a particular Competitive Bid Rate and such bid or bids would cause the total amount of accepted bids to exceed the amount specified in the Competitive Bid Request, then the aggregate amount of the bids made at such Competitive Bid Rates shall be reduced ratably as necessary to eliminate such excess, and (v) except pursuant to clause (iv) above, no bid shall be accepted for a Competitive Bid Loan unless such Competitive Bid Loan is in a minimum principal amount of $5,000,000 and an integral multiple of $1,000,000; PROVIDED FURTHER, HOWEVER, that if a Competitive Bid Loan must be in an amount less than $5,000,000 because of the provisions of clause (iv) above, such Competitive Bid Loan may be for a minimum of $1,000,000 or any integral multiple thereof, and in calculating the pro rata allocation of acceptances of portions of multiple bids at a particular Competitive Bid Rate pursuant to clause (iv) the amount shall be rounded to integral multiples of $1,000,000 in a manner which shall be in the discretion of the Company. A notice given by the Company pursuant to this paragraph (d) shall be irrevocable. (e) The Administrative Agent shall promptly notify each bidding Bank whether or not its Competitive Bid has been accepted (and if so, in what amount and at what Competitive Bid Rate) by telecopy sent by the Administrative Agent, and each successful bidder will thereupon become bound, subject to the other applicable conditions hereof, to make the Competitive Bid Loan in respect of which its bid has been accepted. (f) A Competitive Bid Request shall not be made within two Business Days after the date of any previous Competitive Bid Request. (g) If the Administrative Agent shall elect to submit a Competitive Bid in its capacity as a Bank, it shall submit such bid directly to the Company one quarter of an hour earlier than the latest time at which the other Banks are required to submit their bids to the Administrative Agent pursuant to paragraph (b) above. (h) All notices required by this subsection 2.3 shall be given in accordance with subsection 9.2. 2.4. REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Company unconditionally promises to pay to the Administrative Agent for the account of the relevant Bank (i) on the Maturity Date (or such earlier date as the Loans become due and payable pursuant to subsection 2.9 or Section 7), the unpaid principal amount of each Revolving Credit Loan made to it by such Bank, and (ii) on the last day of the Interest Period thereof, the unpaid principal amount of each Competitive Bid Loan made to it by such Bank. The Company shall have no right to prepay any principal of any Competitive Bid Loan. The Company further agrees to pay interest in immediately available funds at the office of the Administrative Agent on the unpaid principal amount of the Loans from time to time from the date hereof until payment in full thereof at the rates per annum, and on the dates, set forth in subsection 2.13. (b) Each Bank shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Company to such Bank resulting from the Loans made by such Bank to the Company, including the amounts of principal and interest payable and paid to such Bank from time to time hereunder. (c) The Administrative Agent shall maintain the Register pursuant to subsection 9.6(d), and a subaccount for each Bank, in which Register and subaccounts (taken together) shall be recorded (i) the amount of each Loan made hereunder, whether such Loan is a Revolving Credit Loan or a Competitive Bid Loan, the Type of each Loan made and the Interest Period or maturity date (if any) applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Company to each Bank hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder from the Company and each Bank's share thereof. (d) The entries made in the Register and the accounts maintained pursuant to paragraphs (b) and (c) of this subsection shall be prima facie evidence of the items contained therein; PROVIDED, HOWEVER, that the failure of any Bank or the Administrative Agent to maintain such account, such Register or such subaccount, as applicable, or any error therein, shall not in any manner affect the obligation of the Company to repay (with applicable interest) the Loan made to the Company by such Bank in accordance with the terms of this Agreement. (e) If requested by any Bank for purposes of subsection 9.6(g), the Company shall execute and deliver, at the Company's expense, to such Bank (and deliver a copy thereof to the Administrative Agent) one or more promissory notes evidencing the Loans owing to such Bank pursuant to this Agreement. Any such note shall be substantially in the form of Exhibit A-1, or A-2, as applicable, and shall be entitled to all of the rights and benefits of this Agreement. 2.5. FACILITY FEE; ADMINISTRATIVE AGENT'S FEE. (a) The Company agrees to pay to the Administrative Agent for the account of each Bank a non-refundable facility fee at the Applicable Facility Fee Rate per annum (i) on the daily average amount of such Bank's Commitment (whether borrowed or unborrowed) from and including the date hereof to and excluding the Termination Date and (ii) on the daily average amount of each Bank's outstanding Loans from and including the Termination Date to and excluding the Maturity Date, in each case payable quarterly in arrears and on each Fee Payment Date. (b) The Company will pay to the Administrative Agent, for its own account, an agent's fee equal to the amount agreed upon in writing between the Company and the Administrative Agent, payable to the Administrative Agent in such manner as the Company and the Administrative Agent may agree. Each Bank acknowledges that the Administrative Agent is being paid certain other fees for its own account in connection with the financing pursuant to this Agreement in addition to the fees described in this Agreement. 2.6. UTILIZATION FEE. If the average daily aggregate principal amount of the Loans outstanding for the calendar quarter preceding a Fee Payment Date (or such shorter period beginning with the date hereof or ending with the Maturity Date) is in excess of 50% of the average daily Aggregate Commitment for such calendar quarter or period (or, in the case of any period after the Termination Date, 50% of the Aggregate Commitment immediately prior to the Termination Date), the Company agrees to pay to the Administrative Agent for the account of the Banks a non-refundable utilization fee (the "Utilization Fee") at the Applicable Utilization Fee Rate on such average daily aggregate principal amount of the Loans during such calendar quarter (or shorter period), payable in arrears on each Fee Payment Date. 2.7. EXTENSION OF TERMINATION DATE. (a) The Company may, by written notice to the Administrative Agent (such notice being an "Extension Notice") given no earlier than sixty days and no later than forty-five days prior to the Termination Date, request the Banks to consider an extension of the then applicable Termination Date to a date 364 days after the then applicable Termination Date. The Administrative Agent shall promptly transmit any Extension Notice to each Bank. Each Bank shall notify the Administrative Agent whether it wishes to extend the then applicable Termination Date no earlier than thirty days, and no later than twenty days, prior to such Termination Date, and any such notice given by a Bank to the Administrative Agent, once given, shall be irrevocable as to such Bank. Any Bank which does not expressly notify the Administrative Agent prior to such twenty day period that it wishes to so extend the then applicable Termination Date shall be deemed to have rejected the Company's request for extension of such Termination Date. Banks consenting to extend the then applicable Termination Date are hereinafter referred to as "Continuing Banks", and Banks declining to consent to extend such Termination Date (or Banks deemed to have so declined) are hereinafter referred to as "Non-Extending Banks". If the Required Banks have elected (in their sole and absolute discretion) to so extend the Termination Date, the Administrative Agent shall notify the Company of such election by such Required Banks no later than fifteen days prior to such Termination Date, and effective on the date of such notice by the Administrative Agent to the Company, the Termination Date shall be automatically and immediately so extended. No extension will be permitted hereunder without the consent of the Required Banks and in no event shall the Termination Date be extended beyond March 23, 2005. Upon the delivery of an Extension Notice and upon the extension of the Termination Date pursuant to this subsection 2.7, the Company shall be deemed to have represented and warranted on and as of the date of such Extension Notice and the effective date of such extension, as the case may be, that no Default or Event of Default has occurred and is continuing. Notwithstanding anything contained in this Agreement to the contrary, no Bank shall have any obligation to extend the Termination Date, and each Bank may at its option, unconditionally and without cause, decline to extend the Termination Date. (b) If the Termination Date shall have been extended in accordance with subsection 2.7(a), all references herein to the "Termination Date" shall refer to the Termination Date as so extended. (c) If any Bank shall determine not to extend the Termination Date as requested by any Extension Notice given by the Company pursuant to subsection 2.7(a), the Commitment of such Bank shall terminate on the Termination Date without giving any effect to such proposed extension, and the Company shall on such date pay to the Administrative Agent, for the account of such Bank, the principal amount of, and accrued interest on, such Bank's Loans, together with any amounts payable to such Bank pursuant to subsection 2.20 and any fees or other amounts owing to such Bank under this Agreement; PROVIDED that if the Company has replaced such Non-Extending Bank pursuant to subsection 2.7(d) below then the provisions of such subsection shall apply. The Aggregate Commitment shall be reduced by the amount of the Commitment of such Non-Extending Bank to the extent the Commitment of such Non-Extending Bank has NOT been transferred to one or more Continuing Banks pursuant to subsection 2.7(d) below. (d) A Non-Extending Bank shall be obligated, at the request of the Company and subject to payment by the Company to the Administrative Agent for the account of such Non-Extending Bank the principal amount of, and accrued interest on, such Bank's Loans, together with any amounts payable to such Bank pursuant to subsection 2.20 and any fees or other amounts owing to such Bank under this Agreement, to transfer without recourse, representation, warranty (other than good title to its Loans) or expense to such Non-Extending Bank, at any time prior to the Termination Date applicable to such Non-Extending Bank, all of its rights and obligations hereunder to another financial institution or group of financial institutions nominated by the Company and willing to participate in the facility in the place of such Non-Extending Bank; PROVIDED that, if such transferee is not a Bank, such transferee(s) satisfies all the requirements of this Agreement and the Administrative Agent shall have consented to such transfer, which consent shall not be unreasonably withheld. Each such transferee shall become a Continuing Bank hereunder in replacement of the Non-Extending Bank and shall enjoy all rights and assume all obligations on the part of the Banks set forth in this Agreement. Simultaneously with such transfer, each such transferee shall execute and deliver to the Administrative Agent a written agreement assuming all obligations of the Non-Extending Bank it is replacing set forth in this Agreement, which agreement shall be reasonably satisfactory in form and substance to the Administrative Agent. (e) If the Termination Date shall have been extended in respect of Continuing Banks in accordance with subsection 2.7(a), any notice of borrowing pursuant to subsection 2.2 or 2.3 specifying a Borrowing Date occurring after the Termination Date applicable to a Non-Extending Bank or requesting an Interest Period extending beyond such date shall (a) have no effect in respect of such Non-Extending Bank and (b) not specify a requested aggregate principal amount exceeding the Aggregate Available Commitment (calculated on the basis of the Commitments of the Continuing Banks). 2.8. TERMINATION OR REDUCTION OF COMMITMENTS. The Company shall have the right, upon not less than three Business Days' notice to the Administrative Agent, to terminate the Aggregate Commitment or, from time to time, to reduce the amount of the Aggregate Commitment, provided that no such termination or reduction shall be permitted if, after giving effect thereto and to any prepayments made in respect of the Loans on the effective date of such termination or reduction, (i) the aggregate principal amount of the Loans then outstanding would exceed the Aggregate Commitment then in effect and (ii) the proportion of the Aggregate Commitment in relation to the 5-Year Aggregate Commitment, if the 5-Year Credit Agreement is in effect, shall differ from such proportion on the Closing Date. Any such reduction shall be in an amount equal to $10,000,000 or a whole multiple of $1,000,000 in excess thereof and shall reduce permanently the Commitments then in effect. 2.9. OPTIONAL PREPAYMENTS OF REVOLVING CREDIT LOANS. The Company may at any time and from time to time prepay the Revolving Credit Loans, in whole or in part, without premium or penalty, upon at least two Business Days' irrevocable notice to the Administrative Agent, specifying the date and amount of prepayment and whether the prepayment is of Base Rate Loans, Eurodollar Revolving Credit Loans or a combination thereof, and, if of a combination thereof, the amount allocable to each. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with accrued interest to such date on the amount prepaid. Partial prepayments shall be in an aggregate principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Prepayments made in respect of any Eurodollar Loans on any day other than the last day of the applicable Interest Period shall be accompanied by amounts, if any, payable pursuant to subsection 2.20(d). The Company shall not have the right to prepay any Competitive Bid Borrowing. 2.10. CONVERSION AND CONTINUATION OPTIONS. (a) The Company may elect from time to time to convert Eurodollar Revolving Credit Loans to Base Rate Loans by giving the Administrative Agent at least one Business Day's prior irrevocable notice of such election, provided that any such conversion of Eurodollar Revolving Credit Loans may only be made on the last day of an Interest Period with respect thereto. The Company may elect from time to time to convert Base Rate Loans to Eurodollar Revolving Credit Loans by giving the Administrative Agent at least three Working Days' prior irrevocable notice of such election. Any such notice of conversion to Eurodollar Revolving Credit Loans shall specify the length of the initial Interest Period or Interest Periods therefor. Upon receipt of such notice the Administrative Agent shall promptly notify each Bank thereof. All or any part of outstanding Eurodollar Revolving Credit Loans and Base Rate Loans may be converted as provided herein, provided that (i) no Loan may be converted into a Eurodollar Revolving Credit Loan when any Event of Default has occurred and is continuing unless the Administrative Agent or the Required Banks have determined that such a conversion is appropriate, (ii) any such conversion may only be made if, after giving effect thereto, subsection 2.12 shall not have been contravened and (iii) no Revolving Credit Loan may be converted into a Eurodollar Revolving Credit Loan after the date that is one month prior to the Maturity Date. (b) Any Eurodollar Revolving Credit Loans may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Company giving notice to the Administrative Agent, in accordance with the applicable provisions of the term "Interest Period" set forth in subsection 1.1, of the length of the next Interest Period to be applicable to such Loans, PROVIDED that no Eurodollar Revolving Credit Loan may be continued as such (i) when any Event of Default has occurred and is continuing and the Administrative Agent or the Required Banks have determined that such a continuation is not appropriate, (ii) if, after giving effect thereto, subsection 2.12 would be contravened or (iii) after the date that is one month prior to the Maturity Date. If the Company shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant to the preceding proviso such Loans shall be automatically converted to Base Rate Loans on the last day of such then expiring Interest Period. 2.11. APPLICABLE INTEREST RATE MARGINS, FACILITY FEE RATE AND UTILIZATION FEE. The Applicable Eurodollar Margin, the Applicable Facility Fee Rate and the Applicable Utilization Fee Rate (the Applicable Eurodollar Margin, the Applicable Facility Fee Rate and the Applicable Utilization Fee Rate, individually or collectively, the "Applicable Margin" or "Applicable Rate") shall be equal to the percentage per annum set forth below. Applicable Margin (Eurodollar Loans) .23% Applicable Facility Fee Rate .07% Applicable Utilization Fee Rate .05% As provided in subsection 2.13(b), an applicable margin shall not be added to Base Rate Loans. 2.12. MINIMUM AMOUNTS OF TRANCHES. All borrowings, conversions and continuations of Loans hereunder and all selections of Interest Periods hereunder shall be in such amounts and be made pursuant to such elections so that, after giving effect thereto, the aggregate principal amount of the Loans comprising each Tranche shall be equal to $25,000,000 or a whole multiple of $5,000,000 in excess thereof. 2.13. INTEREST RATES AND PAYMENT DATES. (a) The Loans comprising each Eurodollar Borrowing shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to (i) in the case of each Eurodollar Revolving Credit Loan, the Eurodollar Rate for the Interest Period in effect for such Borrowing plus the Applicable Margin and (ii) in the case of each Eurodollar Competitive Bid Loan, the Eurodollar Rate for the Interest Period in effect for such Borrowing plus the Margin offered by the Bank making such Loan and accepted by the Company pursuant to subsection 2.3. (b) Each Base Rate Loan shall bear interest for each day during which such Base Rate Loan is outstanding at a rate per annum equal to the Base Rate. (c) Each Fixed Rate Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the fixed rate of interest offered by the Bank making such Loan and accepted by the Company pursuant to subsection 2.3. (d) If all or a portion of (i) the principal amount of any Loan or (ii) any interest payable thereon, any fee or any other amount payable pursuant to the terms of this Agreement (other than attorneys' fees incurred in connection with the enforcement of the terms hereof) shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum which is (x) in the case of overdue principal, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this subsection plus 2% or (y) in the case of any overdue interest, fee or other amount, the rate described in paragraph (b) of this subsection plus 2%, in each case from the date of such non-payment until such amount is paid in full (after as well as before judgment). (e) Interest on each Loan shall be payable in arrears on each Interest Payment Date applicable to such Loan, the Maturity Date and upon any prepayment of such Loan, PROVIDED that interest accruing pursuant to paragraph (d) of this subsection shall be payable on demand. 2.14. COMPUTATION OF INTEREST AND FEES. (a) Interest on Base Rate Loans shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed. Interest on Eurodollar Loans, Fixed Rate Loans and all fees shall be calculated on the basis of a 360-day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Company and the Banks of each determination of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a change in the Base Rate shall become effective as of the opening of business on the day on which such change in the Base Rate is announced. The Administrative Agent shall as soon as practicable notify the Company and the Banks of the effective date and the amount of each such change in interest rate. Notwithstanding anything to the contrary in this Agreement, interest paid or becoming due hereunder shall in no event exceed the maximum rate permitted by applicable law. (b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Company and the Banks in the absence of manifest error. The Administrative Agent shall, at the request of the Company, deliver to the Company a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to subsection 2.13. (c) If any Reference Bank's Commitment shall terminate or all its Loans shall be assigned for any reason whatsoever, such Reference Bank shall thereupon cease to be a Reference Bank, and if, as a result of the foregoing, there shall only be one Reference Bank remaining, the Administrative Agent (after consultation with the Company and the Banks) shall, by notice to the Company and the Banks, designate another Bank acceptable to the Company, as a Reference Bank so that there shall at all times be at least two Reference Banks. (d) Each Reference Bank shall use its best efforts to furnish quotations of rates to the Administrative Agent as contemplated hereby. If any of the Reference Banks shall be unable or shall otherwise fail to supply such rates to the Administrative Agent upon its request, the rate of interest shall, subject to the provisions of subsection 2.15, be determined on the basis of the quotations of the remaining Reference Banks or Reference Bank. 2.15. INABILITY TO DETERMINE INTEREST RATE. In the event that prior to the first day of any Interest Period the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Company) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, the Administrative Agent shall give telex, telecopy or telephonic notice thereof to the Company and the Banks as soon as practicable thereafter. If such notice is given (x) any Eurodollar Loans (including any Eurodollar Competitive Bid Loan) requested to be made on the first day of such Interest Period shall be made as Base Rate Loans, (y) any Loans that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as Base Rate Loans and (z) any outstanding Eurodollar Loans shall be converted on the first day of such Interest Period to Base Rate Loans. Until such notice has been withdrawn by the Administrative Agent, no further Eurodollar Loans shall be made or continued as such, nor shall the Company have the right to convert Loans to Eurodollar Loans. 2.16. PRO RATA TREATMENT AND PAYMENTS. (a) Each Revolving Credit Borrowing by the Company from the Banks hereunder, each payment by the Company on account of any fee hereunder and, except as contemplated by subsections 2.1(c)(iii), 2.7(c), 2.21, 2.23 and 2.24 any reduction of the Commitments of the Banks shall be made pro rata according to the respective Commitment Percentages of the Banks. Except as contemplated by subsections 2.1(c)(iii), 2.7(c), 2.21, 2.23 and 2.24, each payment (including each prepayment) by the Company on account of principal of and interest on the Revolving Credit Loans shall be made pro rata according to the respective outstanding principal amounts of the Revolving Credit Loans then held by the Banks. Each payment of principal of any Competitive Bid Borrowing shall be allocated pro rata among the Banks participating in such Borrowing in accordance with the respective principal amounts of their outstanding Competitive Bid Loans comprising such Borrowing. Each payment of interest on any Competitive Bid Borrowing shall be allocated pro rata among the Banks participating in such Borrowing in accordance with the respective amounts of accrued and unpaid interest on their outstanding Competitive Bid Loans comprising such Borrowing. Each Bank agrees that in computing such Bank's portion of any Borrowing to be made hereunder, the Administrative Agent may, in its discretion, round each Bank's percentage of such Borrowing to the next higher or lower whole dollar amount. All payments (including prepayments) to be made by the Company hereunder, whether on account of principal, interest, fees or otherwise, shall be made without set off or counterclaim and shall be made prior to 12:00 Noon, New York City time, on the due date thereof to the Administrative Agent, for the account of the Banks, at the Administrative Agent's office specified in subsection 9.2, in Dollars and in immediately available funds. The Administrative Agent shall distribute such payments to the Lending Installation of the Banks promptly upon receipt in like funds as received. If any payment hereunder (other than payments on the Eurodollar Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension. If any payment on a Eurodollar Loan becomes due and payable on a day other than a Working Day, the maturity thereof shall be extended to the next succeeding Working Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Working Day. (b) Unless the Administrative Agent shall have been notified in writing by any Bank prior to a Borrowing Date that such Bank will not make the amount that would constitute its Commitment Percentage of the Borrowing on such date available to the Administrative Agent, the Administrative Agent may assume that such Bank has made such amount available to the Administrative Agent on such Borrowing Date, and the Administrative Agent may, in reliance upon such assumption, make available to the Company a corresponding amount. If such amount is made available to the Administrative Agent on a date after such Borrowing Date, such Bank shall pay to the Administrative Agent on demand an amount equal to the product of (i) the daily average Federal funds rate during such period as quoted by the Administrative Agent, times (ii) the amount of such Bank's Commitment Percentage of such Borrowing, times (iii) a fraction the numerator of which is the number of days that elapse from and including such Borrowing Date to the date on which such Bank's Commitment Percentage of such Borrowing shall have become immediately available to the Administrative Agent and the denominator of which is 360. A certificate of the Administrative Agent submitted to any Bank with respect to any amounts owing under this subsection shall be conclusive in the absence of manifest error. If such Bank's Commitment Percentage of such Borrowing is not in fact made available to the Administrative Agent by such Bank within three Business Days of such Borrowing Date, the Administrative Agent shall notify the Company of such Bank's failure to fund, and shall be entitled to recover such amount with interest thereon at the rate per annum applicable to Base Rate Loans hereunder, on demand, from the Company. 2.17. ILLEGALITY. Notwithstanding any other provision herein, if any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for any Bank to make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such Bank hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled, (b) the Loans of such Bank then outstanding as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law and (c) such Bank shall promptly notify the Administrative Agent of any such cancellation and conversion pursuant to this subsection 2.17. 2.18. REQUIREMENTS OF LAW. (a) In the event that after the date hereof any change in any Requirement of Law or in the interpretation or application thereof by any Governmental Authority charged with the administration or interpretation thereof or compliance by any Bank or the Lending Installation of any Bank with any request or directive (whether or not having the force of law) from any such Governmental Authority made subsequent to the date hereof: (i) shall subject any Bank or the Lending Installation of any Bank to any tax of any kind whatsoever with respect to this Agreement or any Eurodollar Loan or Fixed Rate Loan made by it, or change the basis of taxation of payments to such Bank or the Lending Installation of such Bank in respect thereof (except for taxes covered by subsection 2.19 and changes in the rate of tax on the net income of such Bank or the Lending Installation of such Bank); (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Bank or the Lending Installation of such Bank which is not otherwise included in the determination of interest on the Eurodollar Rate Loans or Fixed Rate Loans hereunder; or (iii) shall impose on such Bank or the Lending Installation of such Bank any other condition; and the result of any of the foregoing is to increase the cost to such Bank or the Lending Installation of such Bank, by an amount which such Bank deems to be material, of making, converting into, continuing or maintaining any Eurodollar Loan or Fixed Rate Loan or to reduce any amount receivable hereunder in respect thereof then, in any such case, the Company shall pay such Bank, within 30 days after its demand, any additional amounts necessary to compensate such Bank for such increased cost or reduced amount receivable. If any Bank becomes entitled to claim any additional amounts pursuant to this subsection, it shall promptly notify the Company, through the Administrative Agent, of the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this subsection submitted by such Bank, through the Administrative Agent, to the Company shall set forth, in reasonable detail, the basis for such claim and the method of computation thereof and be conclusive in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of all other amounts payable hereunder. Notwithstanding the foregoing, no Bank shall be entitled to request compensation under this Section with respect to any Competitive Bid Loan if it shall have been aware of the change giving rise to such request at the time of submission of such Bank's Competitive Bid pursuant to which such Competitive Loan shall have been made. (b) In the event that any Bank shall have determined that any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Bank or the Lending Installation of such Bank or any corporation controlling such Bank with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority, in each case, made subsequent to the date hereof, does or shall have the effect of reducing the rate of return on such Bank's, such Lending Installation's or such corporation's capital as a consequence of its obligations hereunder to a level below that which such Bank, such Lending Installation or such corporation could have achieved but for such change or compliance (taking into consideration such Bank's, such Lending Installation's or such corporation's policies with respect to capital adequacy) by an amount deemed by such Bank to be material, then from time to time, after submission by such Bank to the Company of a written request therefor, the Company shall pay to such Bank within 90 days after demand such additional amount or amounts as will compensate such Bank for such reduction. Each such request shall be accompanied by such information in respect of the basis for the claim made thereby and the method of computation thereof as such Bank shall at the time customarily provide to other borrowers deemed by it to be similarly situated. This covenant shall survive the termination of this Agreement and the payment of all other amounts payable hereunder. (c) Each Bank, through the Administrative Agent, will promptly notify the Company of any event of which it has knowledge, occurring after the date hereof, which will entitle such Bank to compensation pursuant to this subsection. Notwithstanding the foregoing, no Bank shall be entitled to any compensation described in this Section unless, at the time it requests such compensation, it is the policy or general practice of such Bank to request compensation for comparable costs in similar circumstances under comparable provisions of other credit agreements for comparable customers (as determined by such Bank) unless specific facts or circumstances applicable to the Company or the transactions contemplated by this Agreement would alter such policy or general practice. If any Bank fails to give the notice described in subsection 2.18(c) within 90 days after it obtains such actual knowledge of the event required to be described in such notice, such Bank shall, with respect to any compensation that would otherwise be owing to such Bank under this subsection 2.18, only be entitled to payment for increased costs incurred from and after the date that such Bank does give such notice. If the Company shall reimburse any Bank pursuant to this Section for any cost and such Bank shall subsequently receive a refund in respect thereof, such Bank shall so notify the Company and, upon its request, will pay to the Company the portion of such refund that such Bank shall determine in good faith to be allocable to the costs so reimbursed. 2.19. Taxes. (a).......All payments made by the Company under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding, in the case of the Administrative Agent and each Bank, taxes based on or measured by net income imposed on the Administrative Agent or such Bank, as the case may be, as a result of a present or former connection between the jurisdiction of the government or taxing authority imposing such tax and the Administrative Agent or such Bank (excluding a connection arising solely from the Administrative Agent or such Bank having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement) or any political subdivision or taxing authority thereof or therein (all such non-excluded taxes, levies, imposts, duties, charges, fees, deductions and withholdings being hereinafter called "Taxes"). If any Taxes are required to be withheld from any amounts payable to the Administrative Agent or any Bank hereunder, the amounts so payable to the Administrative Agent or such Bank shall be increased to the extent necessary to yield to the Administrative 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; provided, however, that the Company shall not be required to increase any amounts payable to any Non-U.S. Lender (as defined in subsection 2.19(b)) with respect to any Taxes that would not have been imposed but for such Non-U.S. Lender's failure to provide to the Company the Internal Revenue Service Forms required to be provided to the Company pursuant to subsection 2.19(b). Whenever any Taxes are payable by the Company, promptly thereafter the Company shall send to the Administrative 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 Company showing payment thereof. If such evidence of payment is unavailable, other evidence of such payment, satisfactory to the Administrative Agent, shall be provided by the Company. If the Company fails to pay any Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, the Company shall indemnify the Administrative Agent and the Banks for any incremental taxes, interest or penalties that may become payable by the Administrative Agent or any Bank as a result of any such failure. (b) Each Bank represents and warrants to the Company that under currently applicable law and treaties no Taxes will be required to be withheld by the Company with respect to any payments to be made to such Bank hereunder. Each Bank that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes (each, a "NON-U.S. LENDER") agrees to deliver to the Company and the Administrative Agent on or prior to the Closing Date or, in the case of a Non-U.S. Lender that is an assignee or transferee of, or purchaser of a participation in, an interest under this Agreement pursuant to subsection 9.6 (unless such Non-U.S. Lender was already a Bank hereunder immediately prior to such assignment or transfer), on the date of such assignment or transfer to such Non-U.S. Lender, (i) two (2) accurate and complete original signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN (or successor forms) certifying that such Non-U.S. Lender is entitled as of such date to a complete exemption from United States withholding tax with respect to payments to be made under this Agreement, or (ii) if such Non-U.S. Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under an income tax treaty) (or any successor forms) pursuant to clause (i) above, (x) a certificate substantially in the form of Exhibit K (any such certificate, an "EXEMPTION CERTIFICATE"), and (y) two (2) accurate and complete original signed copies of Internal Revenue Service Form W-8BEN (with respect to the portfolio interest exemption) (or successor form) certifying that such Non-U.S. Lender is entitled as of such date to a complete exemption from United States withholding tax with respect to payments of interest to be made under this Agreement. In addition, each Non-U.S. Lender agrees that from time to time after the Closing Date, when the passage of time or a change in facts or circumstances renders the previous certification obsolete or inaccurate in any material respect, such Non-U.S. Lender will deliver to the Company and the Administrative Agent two (2) new accurate and complete original signed copies of Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect to a complete exemption under an income tax treaty), or Form W-8BEN (with respect to the portfolio interest exemption) and an Exemption Certificate, as the case may be, and such other forms as may be required in order to confirm or establish that such Non-U.S. Lender is entitled to a continued exemption from United States withholding tax with respect to payments under this Agreement, or such Non-U.S. Lender shall immediately notify the Company and the Administrative Agent of its inability to deliver any such form or Exemption Certificate, in which case such Non-U.S. Lender shall not be required to deliver any such form or Exemption Certificate. Notwithstanding anything to the contrary contained in this subsection 2.19, the Company agrees to pay any additional amounts and to indemnify each Non-U.S. Lender in the manner set forth in subsection 2.19(a) in respect of any United States Taxes deducted or withheld by them if such Taxes would not have been deducted or withheld but for any change after the Closing Date in any applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof. (c) If any Bank (or Transferee) or the Administrative Agent shall become aware that it is entitled to receive a refund or credit (such credit to include any increase in any foreign tax credit) as a result of Taxes (including any penalties or interest with respect thereto) as to which it has been indemnified by the Company pursuant to this subsection 2.19, it shall promptly notify the Company of the availability of such refund or credit and shall, within 30 days after receipt of a request by the Company, apply for such refund or credit at the Company's expense, and in the case of any application for such refund or credit by the Company, shall, if legally able to do so, deliver to the Company such certificates, forms or other documentation as may be reasonably necessary to assist the Company in such application. If any Bank (or Transferee) or the Administrative Agent receives a refund or credit (such credit to include any increase in any foreign tax credit) in respect to any Taxes as to which it has been indemnified by the Company pursuant to this subsection 2.19, it shall promptly notify the Company of such refund or credit and shall, within 60 days after receipt of such refund or the benefit of such credit (such benefit to include any reduction of the taxes for which any Bank (or Transferee) or the Administrative Agent would otherwise be liable due to any increase in any foreign tax credit available to such Bank (or Transferee) or the Administrative Agent), repay the amount of such refund or benefit of such credit (with respect to the credit, as determined by the Bank, Transferee or Administrative Agent in its sole, reasonable judgment) to the Company (to the extent of amounts that have been paid by the Company under this subsection 2.19 with respect to Taxes giving rise to such refund or credit), plus any interest received with respect thereto, net of all reasonable out-of-pocket expenses of such Bank (or Transferee) or the Administrative Agent and without interest (other than interest actually received from the relevant taxing authority or other Governmental Authority with respect to such refund or credit); PROVIDED, HOWEVER, that the Company, upon the request of such Bank (or Transferee) or the Administrative Agent, agrees to return the amount of such refund or benefit of such credit (plus interest) to such Bank (or Transferee) or the Administrative Agent in the event such Bank (or Transferee) or the Administrative Agent is required to repay the amount of such refund or benefit of such credit to the relevant taxing authority or other Governmental Authority. (d) The agreements in this subsection shall survive the termination of this Agreement and the payment of all other amounts payable hereunder. 2.20. INDEMNITY. The Company agrees to indemnify each Bank and to hold each Bank harmless from any loss or expense which such Bank may sustain or incur as a consequence of (a) default by the Company in payment when due of the principal amount of or interest on any Eurodollar Loan or Fixed Rate Loan, (b) default by the Company in making a borrowing of, conversion into or continuation of any Eurodollar Loan, or any borrowing of a Fixed Rate Loan, after the Company has given a notice requesting the same in accordance with the provisions of this Agreement, (c) default by the Company in making any prepayment after the Company has given a notice thereof in accordance with the provisions of this Agreement or (d) the making of a prepayment of a Eurodollar Loan or Fixed Rate Loan on a day which is not the last day of an Interest Period with respect thereto, including, in each case, any such loss or expense arising from the reemployment of funds obtained by it (or which it has arranged to obtain) or from fees payable to terminate the deposits from which such funds were obtained (or which it has arranged to obtain). Such indemnification shall be in an amount equal to the excess, if any, of (i) the amount of interest which would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure), in each case at the applicable rate of interest for such Loans provided for herein (excluding the Applicable Margin included therein), over (ii) the amount of interest (as reasonably determined by such Bank) which would have accrued to such Bank on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurodollar market. Nothing in this Section shall be deemed to give the Company any right to prepay any Competitive Bid Loan or other Loan the prepayment of which is otherwise prohibited pursuant to the terms of this Credit Agreement. This covenant shall survive the termination of this Agreement and the payment of all other amounts payable hereunder. 2.21. ACTIONS OF BANKS. Each Bank agrees to use reasonable efforts (including reasonable efforts to change the Lending Installation for its Loans) to avoid or minimize any illegality pursuant to subsection 2.17 or any amounts which might otherwise be payable pursuant to subsection 2.18 or 2.19; provided, however, that such efforts shall not cause the imposition on such Bank of any additional costs or legal or regulatory burdens deemed by such Bank to be material. In the event that such reasonable efforts are insufficient to avoid all such illegality, all such events or circumstances or all amounts that might be payable pursuant to subsection 2.18 or 2.19, then the Company may remove any such Bank pursuant to subsection 2.23 or replace any such Bank pursuant to subsection 2.24. 2.22. LENDING INSTALLATIONS. Each Bank may hold its Loans at any Lending Installation selected by it and may change its Lending Installation from time to time, provided that no such Bank shall be entitled to receive any greater amount under subsections 2.18, 2.19, 2.20 or 9.5 as a result of a transfer of any such Loans to a different office of such Bank than it would be entitled to immediately prior thereto unless such claim would have arisen even if such transfer had not occurred. All provisions of this Agreement shall apply to any such Lending Installation. Each Bank may, by written or telex notice to the Company and the Administrative Agent, designate a Lending Installation through which the Loans will be made by it and for whose account payments are to be made. 2.23. REMOVAL OF BANKS. The Company shall be permitted, from time to time in its discretion, to remove Banks from this Agreement and to reduce the Aggregate Commitment and the Aggregate Facilities Commitment; provided, that (a) the Aggregate Facilities Commitment may not be reduced below $5,000,000,000 as a result of removal of one or more Banks from this Agreement pursuant to this Section, (b) after giving effect to such removal, no Bank shall have a Commitment hereunder which exceeds an amount equal to 20% of the Aggregate Commitment and (c) a Bank may not be removed from this Agreement at any time a Default or an Event of Default exists and remains uncured or unwaived under this Agreement. If the Company elects to terminate the Commitment of a Bank, it shall give not less than 30 days written notice to the Administrative Agent and such Bank. On the effective date of such termination, the Company shall pay to the Administrative Agent, for the account of such Bank, in immediately available funds, an amount equal to all Loans and other amounts (including accrued interest and fees) owing to such Bank plus the amounts, if any, owing to such Bank under subsections 2.18, 2.19, 2.20 and 9.5. Notwithstanding the removal of any Bank pursuant to this subsection, such Bank shall continue to have all such rights as would survive the termination of this Agreement under subsections 2.18, 2.19, 2.20 and 9.5. 2.24. REPLACEMENT OF BANKS. In the event that any Bank (a "Notifying Bank") (a) shall demand payment by the Company of any amount pursuant to subsection 2.18 or 2.19, (b) shall cause the suspension of the availability of any Type pursuant to subsection 2.17, (c) shall have excused itself from funding a Loan pursuant to subsection 2.17, (d) shall have failed to make available a Loan on the date on which it was obligated to do so or (e) shall have failed to consent to any waiver, amendment or modification of this Agreement that has been consented to by the Required Banks, the Company may, upon notice to such Notifying Bank and the Administrative Agent, nominate a new financial institution or group of financial institutions willing to participate in the facility in the place of such Notifying Bank ("Replacement Bank"). Upon receipt of such notice from the Company and upon the consent of the Administrative Agent as to the Replacement Bank, which consent shall not be unreasonably withheld, such Notifying Bank shall be obligated to transfer without recourse, representation, warranty (other than that it has not in any way transferred, assigned, encumbered, sold or conveyed its rights under its Loans) or expense to such Notifying Bank, all of its rights (other than rights that would survive the termination of this Agreement pursuant to subsections 2.18, 2.19, 2.20 and 9.5) and obligations hereunder to the Replacement Bank; provided that the Replacement Bank satisfies all of the requirements of this Agreement and pays such Notifying Bank all amounts owing to such Notifying Bank under this Agreement and the Company pays such Notifying Bank any funding losses incurred pursuant to subsection 2.20, if any, as a result of such replacement. This subsection 2.24 shall in no way affect the right of the Company to replace, remove or add a Bank pursuant to any other provision of this Agreement. SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Banks to enter into this Agreement and to make the Loans, the Company hereby represents and warrants to the Administrative Agent and each Bank that: 3.1. FINANCIAL CONDITION. The consolidated balance sheet of the Company and its consolidated Subsidiaries as of December 31, 1998, and the related consolidated statements of income and of cash flows for the fiscal years ended on such dates, reported on by KPMG Peat Marwick, copies of which have heretofore been furnished to each Bank, present fairly the consolidated financial condition of the Company and its consolidated Subsidiaries as at such dates, and the consolidated results of their operations and their consolidated cash flows for the fiscal year then ended. All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by such accountants or Responsible Officer, as the case may be, and as disclosed therein). 3.2. NO CHANGE. Since December 31, 1998 and until the date of this Agreement there has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect. 3.3. CORPORATE EXISTENCE; COMPLIANCE WITH LAW; SIGNIFICANT SUBSIDIARIES. Each of the Company and its Significant Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and (b) has the power and authority to conduct the business in which it is currently engaged. As of December 31, 1998 (based on the full 1998 fiscal year), each Significant Subsidiary is listed on Schedule II hereto. 3.4. CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The Company has the corporate power and authority to make, deliver and perform this Agreement and to borrow hereunder and has taken all necessary corporate action to authorize the borrowings on the terms and conditions of this Agreement and to authorize the execution, delivery and performance of this Agreement. No consent or authorization of, filing with or other act by or in respect of, any Governmental Authority or any other Person is required on the part of the Company in connection with the borrowings hereunder or with the execution, delivery, performance, validity or enforceability of this Agreement. This Agreement has been duly executed and delivered on behalf of the Company. This Agreement constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). 3.5. NO LEGAL BAR. The execution, delivery and performance of this Agreement, the borrowings hereunder and the use of the proceeds thereof will not violate any Requirement of Law or material Contractual Obligation of the Company or of any of its Significant Subsidiaries and will not result in, or require, the creation or imposition of any Lien on any of its or their material respective properties or revenues pursuant to any such Requirement of Law or material Contractual Obligation. 3.6. NO MATERIAL LITIGATION. (a) No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Company, threatened by or against the Company or any of its Significant Subsidiaries or against any of its or their respective properties or revenues, in any case that involves this Agreement, the execution, delivery and performance of this Agreement or the Borrowings hereunder. (b) No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Company, threatened by or against the Company or any of its Significant Subsidiaries or against any of its or their respective properties or revenues which could reasonably be expected to result in a violation of subsection 6.3. 3.7. NO DEFAULT. (a) Neither the Company nor any of its Significant Subsidiaries is in default under or with respect to any of its Contractual Obligations in any respect which could reasonably be expected to result in a violation of subsection 6.3. (b) No Default or Event of Default has occurred and is continuing. 3.8. AGGREGATION OF THE REPRESENTATIONS AND WARRANTIES RELATING TO NET WORTH. The total effect of each event or circumstance referred to in subsections 3.6(b) and 3.7(a) is not, when taken together in the aggregate, reasonably expected to result in a violation of subsection 6.3. 3.9. FEDERAL REGULATIONS. No part of the proceeds of any Loans will be used for "purchasing" or "carrying" any "margin stock" within the respective meanings of each of the quoted terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect or for any purpose which violates the provisions of Regulations T, U and X of such Board of Governors. 3.10. ERISA. Each Plan complies in all material respects with all applicable provisions of ERISA and the Code, no Reportable Event has occurred with respect to any Plan, neither the Company nor any other members of any Commonly Controlled Entity has withdrawn from any Plan or initiated steps to do so, and no steps have been taken to terminate any Plan, except in any case to the extent that such failures could not, in the aggregate, reasonably be expected to result in a violation of subsection 6.3. 3.11. INVESTMENT COMPANY ACT. The Company is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended. 3.12. PURPOSE OF LOANS. The proceeds of the Loans shall be used by the Company for general corporate purposes and to repay outstanding Indebtedness. SECTION 4. CONDITIONS PRECEDENT 4.1. CONDITIONS TO INITIAL LOANS. The agreement of each Bank to make the initial Loan requested to be made by it is subject to the satisfaction of the following conditions precedent: (a) CREDIT AGREEMENT. The Administrative Agent shall have received this Agreement, executed and delivered by a duly authorized officer of the Company, with a counterpart for each Bank. (b) CORPORATE PROCEEDINGS OF THE COMPANY. The Administrative Agent shall have received, with a counterpart for each Bank, a copy of the resolutions, in form and substance satisfactory to the Administrative Agent, of the Board of Directors of the Company authorizing (i) the execution, delivery and performance of this Agreement, and (ii) the borrowings contemplated hereunder, certified by the Secretary or an Assistant Secretary of the Company as of the Closing Date pursuant to a certificate substantially in the form of Exhibit D-2, which certificate shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded. (c) CORPORATE DOCUMENTS. The Administrative Agent shall have received, with a counterpart for each Bank, true and complete copies of the certificate of incorporation and by-laws of the Company, certified as of the Closing Date as complete and correct copies thereof by the Secretary or an Assistant Secretary of the Company. (d) LEGAL OPINIONS. The Administrative Agent shall have received, with a counterpart for each Bank, (i) the executed legal opinion of the general counsel of the Company, substantially in the form of Exhibit B-1, and (ii) the executed legal opinion of Simpson Thacher & Bartlett, counsel to the Administrative Agent, substantially in the form of Exhibit B-2. (e) CERTIFICATES. The Administrative Agent shall have received, with a counterpart for each Bank, an officer's certificate of the chief financial officer, treasurer or controller of the Company, substantially in the form of Exhibit D-1, and a certificate of incumbency of the Company, substantially in the form of Exhibit E. (f) EXISTING CREDIT AGREEMENTS. The Administrative Agent shall have received evidence satisfactory to it that the Existing Credit Agreements have been terminated and all amounts, if any, owing by the borrowers thereunder have been paid in full. (g) TRANSFER INSTRUCTIONS. The Administrative Agent shall have received written money transfer instructions addressed to the Administrative Agent and signed by a duly authorized officer, together with such other related money transfer authorizations as the Administrative Agent may have reasonably requested. 4.2. CONDITIONS TO EACH LOAN. The agreement of each Bank to make any Loan requested to be made by it on any date (including, without limitation, its initial Loan) is subject to the satisfaction of the following conditions precedent: (a) REPRESENTATIONS AND WARRANTIES. Each of the representations and warranties made by the Company in Section 3 of this Agreement shall be true and correct in all material respects on and as of such date as if made on and as of such date except (i) to the extent such representations and warranties expressly relate to an earlier date, (ii) for changes in the Schedules hereto reflecting transactions permitted by this Agreement and (iii) subsequent to the Closing Date, for the representations and warranties contained in subsection 3.2. (b) NO DEFAULT. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the Loans requested to be made on such date. (c) BORROWING NOTICE. The Administrative Agent shall have received a notice of borrowing from the Company, substantially in the form of Exhibit F. Each Borrowing by the Company hereunder shall constitute a representation and warranty by the Company as of the date of such Loan that the conditions contained in this subsection 4.2 have been satisfied. It is understood and agreed that conversions and continuations of Revolving Credit Loans pursuant to subsection 2.10 shall not be subject to the conditions set forth in this subsection 4.2. SECTION 5. AFFIRMATIVE COVENANTS The Company hereby agrees that, so long any Commitment shall remain in effect, any principal of or interest on any Loan or any other amount shall be unpaid hereunder, the Company shall: 5.1. FINANCIAL STATEMENTS. Furnish to: (a) each Bank, promptly after becoming available, each annual and quarterly report which the Company files with the SEC; (b) each Bank, promptly after becoming available and in any event within 120 days after the end of each fiscal year of the Company, a consolidated balance sheet of the Company and its consolidated Subsidiaries as of the end of such fiscal year and the related consolidated statements of income and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on in a manner acceptable to the SEC by KPMG Peat Marwick or other independent public accountants of nationally recognized standing (PROVIDED that no such financial statements of the Company need be so delivered if the Company shall have delivered to such Bank its annual report for the relevant year containing such financial statements pursuant to subsection 5.1(a)); (c) each Bank, promptly after becoming available and in any event within 60 days after the end of each of the first three quarters of each fiscal year of the Company, (i) a consolidated balance sheet of the Company and its consolidated Subsidiaries as of the end of such quarter and (ii) the related consolidated statements of income and cash flows for such quarter and for the portion of the Company's fiscal year ended at the end of such quarter, setting forth in comparative form (i) in the case of clause (i) above, the figures for the previous fiscal year end, and (ii) in the case of clause (ii) above, the figures for the corresponding quarter and the corresponding portion of the Company's previous fiscal year, all certified (subject to the absence of footnotes and normal year-end adjustments) as to fairness of presentation, generally accepted accounting principles and consistency by the chief financial officer or the chief accounting officer of the Company (the "Certificate") (provided that no such financial statements of the Company or the Certificate need be so delivered if the Company shall have delivered to such Bank its quarterly report for the relevant quarter containing such financial statements pursuant to subsection 5.1(a); all such financial statements to fairly present in all material respects the financial condition and results of operations of the Company and to be prepared in reasonable detail and in accordance with Agreement Accounting Principles (except as approved by such accountants or officer, as the case may be, and disclosed therein); (d) the Administrative Agent (for distribution to each Bank), each Report on Form 8-K (if any) which the Company files with the SEC; (e) the Administrative Agent (for distribution to each Bank), upon specific request, copies of all financial statements and reports which the Company has sent to holders of its publicly issued debt securities, and after the same are filed, copies of all financial statements and reports which the Company may make to, or file with, the SEC; and (f) the Administrative Agent (for distribution to each Bank requesting such information), promptly, such other information regarding the operations, business affairs and financial condition of the Company as any Bank may from time to time reasonably request through the Administrative Agent. 5.2. PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy, and cause each of its Significant Subsidiaries to pay, discharge or otherwise satisfy, at or before maturity or before they become delinquent, as the case may be, all its obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of the Company or its Significant Subsidiaries, as the case may be, or except to the extent that the failure to pay, discharge or otherwise satisfy the same could not, in the aggregate, reasonably be expected to result in a violation of subsection 6.3. 5.3. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Preserve, renew and keep in full force and effect, and cause each of its Significant Subsidiaries to preserve, renew and keep in full force and effect, its corporate existence and take, and cause each of its Significant Subsidiaries to take, all reasonable action to maintain all rights, privileges and franchises material to the normal conduct of its significant businesses, provided, however, that notwithstanding this subsection 5.3, the Company or any Significant Subsidiary may (a) discontinue any of its businesses that are no longer deemed advantageous to it (such determination to be in the sole and absolute discretion of the Company or such Significant Subsidiary) and (b) sell or dispose of any assets, subsidiaries or the capital stock thereof, or consolidate with, accept a merger of, or permit the merger of such Person into any other Person in a transaction permitted pursuant to subsection 6.2; and comply, and cause each of its Significant Subsidiaries to comply, in all material respects with all Requirements of Law (including, but not limited to, ERISA), except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to result in a violation of subsection 6.3. 5.4. NOTICES. Promptly give notice (or in the case of subsection 5.4(d), a copy) to the Administrative Agent of: (a) the occurrence of any Default or Event of Default; (b) any litigation, investigation or proceeding affecting the Company or any of its Significant Subsidiaries which could reasonably be expected to result in a violation of subsection 6.3; (c) the following events, as soon as possible and in any event within 30 days after the Company knows or has reason to know thereof: (i) the occurrence or expected occurrence of any Reportable Event with respect to any Plan, or any withdrawal from, or the termination, Reorganization or Insolvency of any Multiemployer Plan or (ii) the institution of proceedings or the taking of any other action by the PBGC or the Company or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the termination, Reorganization or Insolvency of, any Plan, in any event which could reasonably be expected to result in a Material Adverse Effect; and (d) as soon as possible and in any event within 30 days after receipt by the Company, a copy of (i) any notice or claim to the effect that the Company or any Subsidiary is or may be liable to any Person as a result of the release by the Company, any of its Subsidiaries, or any other Person of any toxic or hazardous waste or substance into the environment, and (ii) any notice alleging any violation of any federal, state or local environmental, health or safety law or regulation by the Company or any Subsidiary, which could reasonably be expected to result in a claim, liability or loss that will, in the case of clauses (i) or (ii), when aggregated with the effect of any failure by the Company to (x) maintain and preserve all property material to the conduct of its business, (y) keep such property in good repair, working order and condition and (z) from time to time make, or cause to be made, all needful and proper repairs, renewals, additions, improvements and replacements thereto, result in a violation of subsection 6.3. Each notice pursuant to this subsection shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the Company proposes to take with respect thereto. 5.5. STATUS OF OBLIGATIONS. Ensure that its obligations under this Agreement shall at all times be direct and general obligations of the Company and shall at all times rank at least pari passu in all respects with all other outstanding unsecured and unsubordinated indebtedness of the Company. 5.6. MAINTENANCE OF PROPERTY. At all times maintain and preserve, and cause each of its Significant Subsidiaries to maintain and preserve, all property material to the conduct of its business and keep such property in good repair, working order and condition and from time to time make, or cause to be made, all needful and proper repairs, renewals, additions, improvements and replacements thereto except where the failure to do so would not result in a violation of subsection 6.3; provided, however, that nothing in this subsection 5.6 shall prevent the Company or any Subsidiary from (a) discontinuing the operation and maintenance of any of its properties no longer deemed useful in the conduct of its business or (b) selling or disposing of any assets, subsidiaries or the capital stock thereof in a transaction permitted pursuant to subsection 6.2. 5.7. PAYMENT OF TAXES. Pay and discharge promptly when due, and cause each of its Significant Subsidiaries to pay and discharge promptly when due, all taxes, assessments and governmental charges or levies the amounts of which are material to the business, assets, operations, prospects or condition, financial or otherwise, of the Company and the Subsidiaries taken as a whole, imposed upon it or upon its income or profits or in respect of its property, before the same shall become delinquent or in default; PROVIDED, HOWEVER, that such payment and discharge shall not be required with respect to any such tax, assessment, charge, or levy so long as the validity or amount thereof shall be contested in good faith by appropriate actions or proceedings and the Company shall have set aside on its books appropriate reserves with respect thereto. 5.8. USE OF PROCEEDS. Use the proceeds of the Loans for general corporate purposes and to repay outstanding Indebtedness. The Company will not, nor will it permit any Subsidiary to, use any of the proceeds of the Loans to purchase or carry any "margin stock" (as defined in Regulation U). SECTION 6. NEGATIVE COVENANTS The Company hereby agrees that, so long as any Commitment remains in effect, or any principal of or interest on any Loan or any other amount shall be unpaid hereunder, the Company shall not: 6.1. NEGATIVE PLEDGE. (a) (1) Create, incur or suffer to exist any Lien upon any of its property or assets to secure indebtedness for money borrowed, incurred, issued, assumed or guaranteed by the Company or (2) create any Lien upon any of its property or assets to secure any indebtedness or other obligations of any Person if such Lien is a Lien created by any action of the Company (including any grant by the Company of any Lien pursuant to a written instrument or by the pledge by the Company of property, but excluding Liens arising by operation of law), without, in the case of any Lien described in the foregoing clauses (1) and (2), thereby expressly securing the due and punctual payment of the principal of and interest on the Loans and all other amounts payable by the Company hereunder equally and ratably with any and all other obligations and indebtedness secured by such Lien, so long as any such other obligations and indebtedness shall be so secured; provided, however, that this restriction shall not prohibit or otherwise restrict: (i) the Company from creating, incurring or suffering to exist upon any of its property or assets any Lien in favor of any subsidiary of the Company; (ii) the Company (A) from creating, incurring or suffering to exist a purchase money Lien upon any such property, assets, capital stock or indebtedness acquired by the Company prior to, at the time of, or within one year after (1) in the case of physical property or assets, the later of the acquisition, completion of construction (including any improvements on existing property) or commencement of commercial operation of such property or (2) in the case of shares of capital stock, indebtedness or other property or assets, the acquisition of such shares of capital stock, indebtedness, property or assets, (B) from acquiring property or assets subject to Liens existing thereon at the date of acquisition thereof, whether or not the indebtedness secured by any such Lien is assumed or guaranteed by the Company, or (C) from creating, incurring or suffering to exist Liens upon any property of any Person, which Liens exist at the time any such Person is merged with or into or consolidated with the Company (or becomes a subsidiary of the Company) or which Liens exist at the time of a sale or transfer of the properties of any such Person as an entirety or substantially as an entirety to the Company; (iii) the Company from creating, incurring or suffering to exist upon any of its property or assets Liens in favor of the United States of America or any State thereof or the District of Columbia, or any agency, department or other instrumentality thereof, to secure progress, advance or other payments pursuant to any contract or provision of any statute (including maintaining self-insurance or participating in any fund in connection with worker's compensation, disability benefits, unemployment insurance, old age pensions or other types of social benefits, or joining in any other provisions or benefits available to companies participating in any such arrangements); (iv) the Company from creating, incurring or suffering to exist upon any of its property or assets Liens securing the performance of letters of credit, bids, tenders, sales contracts, purchase agreements, repurchase agreements, reverse repurchase agreements, bankers' acceptances, leases, surety and performance bonds, and other similar obligations incurred in the ordinary course of business; (v) the Company from creating, incurring or suffering to exist Liens upon any real property acquired or constructed by the Company primarily for use in the conduct of its business; (vi) the Company from entering into any arrangement with any Person providing for the leasing by the Company of any property or assets, which property or assets have been or will be sold or transferred by the Company to such Person with the intention that such property or assets will be leased back to the Company, if the obligations in respect of such lease would not be included as liabilities on a consolidated balance sheet of the Company; (vii) the Company from creating, incurring or suffering to exist upon any of its property or assets Liens to secure non-recourse debt in connection with the Company engaging in any leveraged or single-investor or other lease transactions, whether (in the case of Liens on or relating to leases or groups of leases or the particular properties subject thereto) such Liens are on the particular properties subject to any leases involved in any of such transactions and/or the rental or other payments or rights under such leases or, in the case of any group of related or unrelated leases, on the properties subject to the leases comprising such group and/or on the rental or other payments or rights under such leases, or on any direct or indirect interest therein, and whether (in any case) (A) such Liens are created prior to, at the time of, or at any time after the entering into of such lease transactions and/or (B) such leases are in existence prior to, or are entered into by the Company at the time of or at any time after, the purchase or other acquisition by the Company of the properties subject to such leases; (viii) the Company from creating, incurring or suffering to exist (A) other consensual Liens in the ordinary course of business of the Company that secure indebtedness that, in accordance with generally accepted accounting principles, would not be included in total liabilities as shown on the Company's consolidated balance sheet, or (B) Liens created by the Company in connection with any transaction intended by the Company to be a sale of property or assets of the Company, PROVIDED that such Liens are upon any or all of the property or assets intended to be sold, the income from such property or assets and/or the proceeds of such property or assets; (ix) the Company from creating, incurring or suffering to exist Liens on property or assets financed through tax-exempt municipal obligations, PROVIDED that such Liens are only on the property or assets so financed; (x) any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any of the foregoing; PROVIDED, HOWEVER, that any such extension, renewal or replacement shall be limited to all or a part of the property or assets (or substitutions therefor) which secured the Lien so extended, renewed or replaced (plus improvements on such property); and (xi) the Company from creating, incurring or suffering to exist any other Lien not otherwise permitted by any of the foregoing clauses (i) through (ix) above if the aggregate amount of all secured debt of the Company secured by such Liens would not exceed 5% of the excess of the Company's consolidated assets over the consolidated liabilities as shown on the Company's most recent audited consolidated financial statements in accordance with generally accepted accounting principles. (b) For the purposes of this subsection 6.1, any contract by which title is retained as security (whether by lease, purchase, title retention agreement or otherwise) for the payment of a purchase price shall be deemed to be a purchase money Lien. Nothing in this subsection 6.1 shall apply to any Lien of any kind upon any of the properties of any character of the Company existing on the date of execution and delivery of this Agreement. (c) Subject to subsection 6.3, nothing contained in this subsection 6.1 or elsewhere in this Agreement shall prevent or be deemed to prohibit the creation, assumption or guaranty by the Company of any indebtedness not secured by a Lien or the issuance by the Company of any debentures, notes or other evidences of indebtedness not secured by a Lien, whether in the ordinary course of business or otherwise. 6.2. CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. Consolidate with any other corporation or accept a merger of any other corporation into the Company or permit the Company to be merged into any other corporation, or sell its properties and assets as, or substantially as, an entirety; provided, however, that subject to the provisions of subsection 6.1, nothing contained in this Agreement shall be deemed to prevent (i) the merger into the Company of another corporation, (ii) the consolidation of the Company and another corporation, (iii) the merger of the Company into another corporation or (iv) the sale of the property or assets of the Company to another corporation, so long as (a) no Default or Event or Default shall have occurred and be continuing and (b) with respect to clauses (ii), (iii) and (iv) above, the surviving corporation of the merger or the purchaser of the Company's assets, as the case may be, shall expressly assume the obligations of the Company under this Agreement and expressly agree to be bound by all other provisions applicable to the Company under this Agreement. 6.3. NET WORTH. Permit Net Worth at any time to be less than $3,750,000,000. SECTION 7. EVENTS OF DEFAULT If any of the following events shall occur and be continuing: (a) The Company shall (i) fail to pay any principal of any Loan when due in accordance with the terms hereof; (ii) fail to pay any interest on any Loan, any Utilization Fee or any Facility Fee within five Business Days after any such interest or fee becomes due in accordance with the terms hereof; or (iii) fail to pay any expenses or other amounts payable under this Agreement to the Administrative Agent or any Bank within fifteen days after such expenses or other amounts become due in accordance with the terms hereof; or (b) Any representation or warranty made or deemed made by the Company herein or which is contained in any certificate, document or financial or other statement furnished at any time under or in connection with this Agreement shall prove to have been incorrect in any material respect on or as of the date made or deemed made; or (c) The Company shall default in the observance or performance of any agreement contained in Section 6; or (d) The Company shall default in the observance or performance of any other agreement contained in this Agreement (other than as provided in paragraphs (a) through (c) of this Section), and such default shall continue unremedied for a period of 30 days after notice shall have been given to the Company by the Administrative Agent; or (e) Any event or condition shall occur which results in the acceleration of the maturity of any Indebtedness of the Company or any of its Significant Subsidiaries in an aggregate principal amount equal to or greater than $100,000,000; or the Company or any of its Significant Subsidiaries shall not make any liquidation or termination payment or payments in an aggregate amount equal to or greater than $100,000,000 when it becomes due (any applicable grace period having expired) under one or more Hedging Agreements; or the Company or any of its Significant Subsidiaries shall not pay the principal of or interest on any Indebtedness with respect to Indebtedness in an aggregate principal amount in excess of $100,000,000 when it becomes due and beyond any period of grace with respect thereto; or (f) (i) The Company or any of its Significant Subsidiaries shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets, or the Company or any of its Significant Subsidiaries shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against the Company or any of its Significant Subsidiaries any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against the Company or any of its Significant Subsidiaries any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) the Company or any of its Significant Subsidiaries shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the Company or any of its Significant Subsidiaries shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or (g) (i) Any Person shall engage in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the Company or any Commonly Controlled Entity shall incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other event or condition shall occur or exist, with respect to a Plan; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to result in a violation of subsection 6.3; or (h) One or more judgments or decrees shall be entered against the Company or any of its Significant Subsidiaries involving in the aggregate a liability (not paid or fully covered by insurance) of $100,000,000 or more and such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 90 days from the entry thereof; or (i) If at any time the Company and its Significant Subsidiaries shall become liable for remediation and/or environmental compliance expenses and/or fines, penalties or other charges which, in the aggregate, could reasonably be expected to result in a violation of subsection 6.3; then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (f) above with respect to the Company, automatically the Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement shall immediately become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken: (i) with the consent of the Required Banks, the Administrative Agent may, or upon the request of the Required Banks the Administrative Agent shall, by notice to the Company declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate; and (ii) with the consent of the Required Banks, the Administrative Agent may, or upon the request of the Required Banks the Administrative Agent shall, by notice of default to the Company, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement to be due and payable forthwith, whereupon the same shall immediately become due and payable. Except as expressly provided above in this Section, presentment, demand, protest and all other notices of any kind are hereby expressly waived. SECTION 8. THE AGENTS 8.1. APPOINTMENT. Each Bank hereby designates and appoints Chase as the Administrative Agent of such Bank under this Agreement, and each such Bank authorizes Chase as the Administrative Agent to take such action on its behalf under the provisions of this Agreement and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Bank, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or otherwise exist against the Administrative Agent. The Arranger and the Syndication Agents, in their respective capacities as such, shall not have any duties or responsibilities hereunder nor any fiduciary relationship with any Bank, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or otherwise exist against the Arranger or the Syndication Agents in their respective capacities as such. 8.2. DELEGATION OF DUTIES. The Administrative Agent may execute any of its duties under this Agreement by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. 8.3. EXCULPATORY PROVISIONS. Neither the Administrative Agent nor any of its officers, directors, employees, 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 this Agreement (except for its or such Person's own gross negligence or willful misconduct) or (ii) responsible in any manner to any of the Banks for any recitals, statements, representations or warranties made by the Company or any officer thereof contained in this Agreement or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or for any failure of the Company to perform its obligations hereunder or thereunder. The Administrative Agent shall not be under any obligation to any Bank to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement, or to inspect the properties, books or records of the Company. 8.4. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Company), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent may deem and treat the payee of the Bank specified in the Register with respect to any amount owing hereunder as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement unless it shall first receive such advice or concurrence of the Required Banks as it deems appropriate and it shall first be indemnified to its satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement in accordance with a request of the Required Banks, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Banks and all future holders of the obligations owing by the Company hereunder. 8.5. NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Administrative Agent has received notice from a Bank or the Company referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default". In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give notice thereof to the Banks. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Banks; provided that unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Banks. 8.6. NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER BANKS. Each Bank expressly acknowledges that neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by the Administrative Agent hereinafter taken, including any review of the affairs of the Company, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Bank. Each Bank represents to the Administrative Agent that it has, independently and without reliance upon the Administrative 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, operations, property, financial and other condition and creditworthiness of the Company and made its own decision to make its Loans hereunder and enter into this Agreement. Each Bank also represents that it will, independently and without reliance upon the Administrative 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, appraisals and decisions in taking or not taking action under this Agreement, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Company. Except for notices, reports and other documents expressly required to be furnished to the Banks by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Bank with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of the Company which may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates. 8.7. INDEMNIFICATION. The Banks agree to indemnify the Administrative Agent in its capacity as such (to the extent not reimbursed by the Company and without limiting the obligation of the Company to do so), ratably according to their respective Commitment Percentages in effect on the date on which indemnification is sought under this Section (or, if indemnification is sought after the date upon which the Commitment shall have terminated and the Loans shall have been paid in full, ratably in accordance with their Commitment Percentages immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Loans and all other amounts owing hereunder) be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of this Agreement or any documents contemplated by or referred to herein or the transactions contemplated hereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided that no Bank shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent's gross negligence or willful misconduct. The agreements in this subsection shall survive the payment of the Loans and all other amounts payable hereunder. 8.8. ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The Administrative Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Company as though the Administrative Agent were not the Administrative Agent hereunder. With respect to its Loans made or renewed by it, the Administrative Agent shall have the same rights and powers under this Agreement as any Bank and may exercise the same as though it were not the Administrative Agent, and the terms "Bank" and "Banks" shall include the Administrative Agent in its individual capacity. 8.9. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may resign as Administrative Agent upon thirty days' notice to the Banks, and may be removed at any time with or without cause by the Required Banks. Upon any resignation or removal of the Administrative Agent, the Required Banks shall appoint from among the Banks a successor Administrative Agent for the Banks, which successor Administrative Agent shall be approved by the Company. If no successor Administrative Agent shall have been so approved by the Company and shall have accepted such appointment within thirty days after the resignation of the Administrative Agent, then in place or the Required Banks' removal of the retiring Administrative Agent, such retiring Administrative Agent may, on behalf of the Banks, appoint a successor Administrative Agent (which shall be a commercial bank or trust company organized or licensed under the laws of the United States or any state thereof) which appointment shall be subject to the approval of the Company such approval not to be unreasonably withheld. Upon the acceptance of any appointment as Administrative Agent hereunder, such successor Administrative Agent shall succeed to the rights, powers and duties of the Administrative Agent and the term "Administrative Agent" shall mean such successor agent effective upon its appointment, and the former Administrative Agent's rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement or any holders of the obligations owing hereunder. After any retiring Administrative Agent's resignation or removal as Administrative Agent, the provisions of this subsection shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement. SECTION 9. MISCELLANEOUS 9.1. AMENDMENTS AND WAIVERS. Neither this Agreement, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this subsection. With the written consent of the Required Banks, the Administrative Agent and the Company may, from time to time, enter into written amendments, supplements or modifications hereto for the purpose of adding any provisions to this Agreement or adding any financial institution (other than as provided for herein) as a Bank hereunder (thereby increasing the Aggregate Commitment) or changing in any manner the rights of the Banks or of the Company hereunder or thereunder or waiving, on such terms and conditions as the Administrative Agent may specify in such instrument, any of the requirements of this Agreement or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall (a) reduce the amount or extend the maturity of any Loan or any installment thereof, or reduce the rate of interest (other than default interest rates) thereon or extend the time of payment of interest or fees thereon, or reduce any fee payable to any Bank hereunder, or change the amount of any Bank's Commitment, in each case without the written consent of the Bank affected thereby, or (b) amend, modify or waive any provision of subsection 2.7, subsection 2.1(c) or this subsection, amend the definition of Required Banks or consent to the assignment or transfer by the Company of any of its rights and obligations under this Agreement (other than as set forth in subsection 6.2), in each case without the written consent of all the Banks, or (c) amend, modify or waive any provision of Section 8 or any reference to the Administrative Agent or the Syndication Agents in any other provision of this Agreement which alters the duties or obligations of the Administrative Agent or the Syndication Agents without the written consent of the then Administrative Agent or the Syndication Agents, as the case may be. Nothing in this subsection 9.1 shall prevent or prohibit the Administrative Agent, the Company or any Bank from taking any action in accordance with subsection 2.1(c), 2.7, 2.21, 2.23 or 2.24 notwithstanding anything contained in this subsection 9.1 to the contrary, including, without limitation (i) preventing the Administrative Agent from increasing the Aggregate Commitment or the Aggregate Facilities Commitment, (ii) preventing any Bank from increasing its Commitment or prohibiting the execution and delivery of any Commitment Increase Supplement, (iii) preventing an Other Bank from becoming an Additional Bank or prohibiting the execution and delivery of an Additional Bank Agreement, (iv) preventing a Non-Extending Bank from transferring its rights and obligations hereunder to a Continuing Bank, (v) preventing a Notifying Bank from transferring its rights and obligations to a Replacement Bank, or (vi) the modification, amendment or supplement of this Agreement (including, without limitation, Schedule I), in each case solely in accordance with, or upon a transfer by a Bank of its rights and obligations hereunder pursuant to, the applicable provisions of subsection 2.1(c), 2.7, 2.21, 2.23 or 2.24. Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Banks and shall be binding upon the Company, the Banks, the Agents and all future holders of the obligations owing hereunder. In the case of any waiver, the Company, the Banks and the Agents shall be restored to their former position and rights hereunder, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. 9.2. NOTICES. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy, telegraph or telex), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered by hand, or three days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when received, or, in the case of telegraphic notice, when delivered to the telegraph company, or, in the case of telex notice, when sent, answerback received, addressed, in the case of the Company and the Administrative Agent, as follows, and as set forth on Schedule I in the case of the other parties hereto, or to such other address as may be hereafter notified by the respective parties hereto and any future holders of the obligations owing hereunder: The Administrative Agent: The Chase Manhattan Bank Agency Services Group 1 Chase Manhattan Plaza - 8th Floor New York, New York 10081 Attention: Frank Forlenza Telecopy: (212) 552-7490 The Company: The CIT Group, Inc. 1211 Avenue of the Americas New York, New York 10036 Attention: Senior Vice President and Treasurer Telecopy: (212) 536-1971 9.3. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Bank, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 9.4. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and warranties made hereunder and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans hereunder. 9.5. PAYMENT OF EXPENSES AND TAXES. The Company agrees (a) to pay or reimburse the Administrative Agent for all of its reasonable out-of-pocket costs and expenses incurred in connection with the preparation and execution of, and any amendment, supplement or modification to, this Agreement and any other documents prepared in connection herewith (including, without limitation, any Commitment Increase Supplement or Additional Bank Agreement pursuant to subsection 2.1), including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent, (b) to pay or reimburse each Bank and the Agents for all its reasonable costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement and any such other documents, including, without limitation, reasonable fees and disbursements (including the allocated costs and expenses of in-house counsel) of counsel to the Administrative Agent and to the several Banks, (c) to pay, indemnify, and hold each Bank and the Administrative Agent harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement and any such other documents, and (d) to pay, indemnify, and hold each Bank and the Administrative Agent harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement, any Loan (including the use of proceeds thereof) and any such other documents (all the foregoing, collectively, the "indemnified liabilities"), provided, that the Company shall have no obligation hereunder to any Administrative Agent or any Bank with respect to indemnified liabilities arising from (i) the gross negligence or willful misconduct of such Administrative Agent or such Bank, (ii) legal proceedings commenced against any Administrative Agent or any Bank by any security holder or creditor thereof arising out of and based upon rights afforded any such security holder or creditor solely in its capacity as such, or (iii) legal proceedings commenced against any Agent or any Bank by any other Bank or by any Transferee. The agreements in this subsection shall survive repayment of the Loans and all other amounts payable hereunder. 9.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING BANKS. (a) This Agreement shall be binding upon and inure to the benefit of the Company, the Administrative Agent, the Banks, all future holders of the obligations owing hereunder and their respective successors and assigns, except that the Company may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of each Bank (except as provided in subsection 6.2). (b) Any Bank may, in the ordinary course of its commercial banking business and in accordance with applicable law, at any time sell to one or more banks or other entities ("PARTICIPANTS") participating interests in any Loan owing to such Bank, any Commitment of such Bank or any other interest of such Bank hereunder. In the event of any such sale by a Bank of participating interests to the Participant, such Bank's obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Bank shall remain solely responsible for the performance thereof, such Bank shall remain the holder of any obligation owing to it hereunder for all purposes under this Agreement, and the Company and the Administrative Agent shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement; PROVIDED, that such Bank shall retain the sole right to approve, without the consent of any Participant, any amendment, modification or waiver of any provision of the Credit Agreement other than, as may be agreed to by such Bank and Participant, any amendment, modification or waiver with respect to any Loan or Commitment in which such Participant has an interest which forgives principal, interest or fees or reduces the interest rate or fees payable with respect to any such Loan or Commitment or postpones any date fixed for any regularly-scheduled payment of principal of, or interest or fees on, any such Loan or Commitment. The Company agrees that if amounts outstanding under this Agreement are due or unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of setoff in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Bank under this Agreement. The Company also agrees that each Participant shall be entitled to the benefits of subsections 2.18, 2.19, 2.20 and 9.5 with respect to its participation in the Commitment and the Loans outstanding from time to time; provided, that no Participant shall be entitled to receive any greater amount pursuant to such subsections than the transferor Bank would have been entitled to receive in respect of the amount of the participation transferred by the transferor Bank to such Participant had no such transfer occurred. (c) Any Bank may, in the ordinary course of its commercial banking business and in accordance with applicable law, at any time sell to any Bank or any Affiliate thereof and, with the consent of the Company and the Administrative Agent (which shall not be unreasonably withheld), to one or more additional banks or financial institutions ("PURCHASING BANKS") all or any part of its rights and obligations under this Agreement pursuant to a Commitment Transfer Supplement, substantially in the form of Exhibit C (a "COMMITMENT TRANSFER SUPPLEMENT"), executed by such Purchasing Bank and such transferor Bank (and, in the case of a Purchasing Bank that is not then a Bank or an Affiliate thereof, by the Company and the Administrative Agent) and delivered to the Administrative Agent for its acceptance and recording in the Register. The Company shall have no obligation to consent to a sale by a Bank to any Person that is not a bank or an Affiliate of a bank. Each such assignment shall be in a minimum amount of $15,000,000 (other than in the case of an assignment of all of a Bank's interests under this Agreement) and the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance, a Commitment Transfer Supplement, and the Transferor Bank or the Purchasing Bank, as agreed between them, shall deliver to the Administrative Agent a processing and recordation fee of $2,000. Each such assignment shall be ratable as among any Commitment and/or Revolving Credit Loans under this Agreement and the 5-Year Credit Agreement, if such agreement is in effect. After giving effect to any such assignment (other than an assignment of all of a Bank's interests under this Agreement), the assigning Bank (together with any Bank which is an Affiliate of such assigning Bank) shall retain Revolving Credit Loans and/or Commitments aggregating not less than $15,000,000. Upon such execution, delivery, acceptance and recording, from and after the Transfer Effective Date determined pursuant to such Commitment Transfer Supplement (the "TRANSFER EFFECTIVE DATE"), (x) the Purchasing Bank thereunder shall be a party hereto and, to the extent provided in such Commitment Transfer Supplement, have the rights and obligations of a Bank hereunder with a Commitment as set forth therein, and (y) the transferor Bank thereunder shall, to the extent provided in such Commitment Transfer Supplement, be released from its obligations under this Agreement (and, in the case of a Commitment Transfer 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 hereto). Such Commitment Transfer Supplement shall be deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect the addition of such Purchasing Bank and the resulting adjustment of Commitment Percentages arising from the purchase by such Purchasing Bank of all or a portion of the rights and obligations of such transferor Bank under this Agreement. Notwithstanding any provision of this subsection 9.6, the consent of the Company shall not be required for any assignment which occurs at any time when any of the events described in Section 7(f) shall have occurred and be continuing. (d) The Administrative Agent shall maintain at its address referred to in subsection 9.2 a copy of each Commitment Transfer 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 constitute prima facie evidence of the items contained therein, and the Company, the Administrative Agent and the Banks shall treat each Person whose name is recorded in the Register as the owner of the Loan recorded therein for all purposes of this Agreement. The Register shall be available for inspection by the Company or any Bank at any reasonable time and from time to time upon reasonable prior notice. (e) Upon its receipt of a Commitment Transfer Supplement executed by a transferor Bank and Purchasing Bank (and, in the case of a Purchasing Bank that is not then a Bank or an Affiliate thereof, by the Company and the Administrative Agent), the Administrative Agent shall (i) promptly accept such Commitment Transfer Supplement and (ii) on the Transfer Effective Date determined pursuant thereto record the information contained therein in the Register and give notice of such acceptance and recordation to the Banks and the Company. (f) If, pursuant to this subsection, any interest in this Agreement is transferred to any Participant or Assignee (each, a "TRANSFEREE") which is organized under the laws of any jurisdiction other than the United States or any state thereof, the transferor Bank shall cause such Transferee, concurrently with the effectiveness of such transfer, (i) to represent to the transferor Bank (for the benefit of the transferor Bank and the Company) that under applicable law and treaties no taxes will be required to be withheld by the Company or the transferor Bank with respect to any payments to be made to such Transferee in respect of the Loans (except to the extent that such Transferee's assignor (if any) was entitled, at the time of assignment, to receive additional amounts from the Company with respect to Taxes pursuant to subsection 2.19(a)) and (ii) to furnish to the transferor Bank (and, in the case of any Assignee, to the Company) the forms and certificates required to be delivered pursuant to subsection 2.19(b). (g) Nothing herein shall prohibit any Bank from pledging or assigning all or any portion of its Loans to any Federal Reserve Bank in accordance with applicable law. 9.7. DISSEMINATION OF INFORMATION; CONFIDENTIALITY. (a) The Company authorizes each Bank to disclose to any Participant or Purchasing Bank or any other Person acquiring an interest in this Agreement by operation of law (each a "Transferee") and any prospective Transferee any and all information in such Bank's possession concerning the creditworthiness of the Company and its Subsidiaries, provided that such Transferee or prospective Transferee agrees to be bound by this subsection 9.7 with respect to such information as though such Transferee or prospective Transferee were a Bank hereunder. (b) Each Bank and each Transferee that receives information which is not publicly available and which has been identified by the Company as confidential ("PROPRIETARY INFORMATION") will be bound to treat such Proprietary Information in a confidential manner and to use such Proprietary Information only for the purpose of evaluating and monitoring the creditworthiness of the Company and its Subsidiaries in connection with such Bank's or such Transferee's extensions of credit pursuant to this Agreement or such Bank's or Transferee's other agreements with the Company, or as otherwise may be required by law, regulation or court order; PROVIDED, that if any Bank or Transferee shall be required to disclose any Proprietary Information by a court order (i) such Bank or Transferee shall, unless prohibited by applicable law, applicable regulation or the terms of the applicable court order, communicate such fact to the Administrative Agent and the Administrative Agent shall communicate such fact to the Company and (ii) such Bank or Transferee shall disclose only such Proprietary Information which it is requested to disclose or advised by counsel to disclose; PROVIDED, FURTHER, that any Bank or Transferee may disclose such information which it is requested to disclose or is advised by counsel to disclose to an auditor or examiner if it has advised such auditor or examiner that such information is confidential; PROVIDED, FURTHER, that any Bank or Transferee may disclose Proprietary Information (A) to Affiliates of such Bank or Transferee provided that such Affiliates agree to keep the Proprietary Information confidential as set forth herein, (B) with the written consent of the Company, (C) in connection with any litigation involving the Company and such Bank or Transferee, (D) to legal counsel to such Bank or Transferee if it advises such legal counsel that such information is confidential, (E) if such Proprietary Information was in the possession of such Bank or Transferee on a non-confidential basis prior to the Company furnishing it to such Bank or Transferee as shown by clear and convincing evidence, or (F) if such Proprietary Information is received by such Bank or Transferee, without restriction as to its disclosure or use, from a Person who, to such Bank's or Transferee's knowledge or reasonable belief, was not prohibited from disclosing it by any duty of confidentiality. 9.8. ADJUSTMENTS. (a).If any Bank (a "benefitted Bank") shall at any time receive any payment of all or part of its Loans, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 7(f), or otherwise), in a greater proportion than any such payment to or collateral received by any other Bank, if any, in respect of such other Bank's Loans, or interest thereon, such benefitted Bank shall purchase for cash from the other Banks such portion of each such other Bank's Loan, or shall provide such other Banks with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such benefitted Bank to share the excess payment or benefits of such collateral or proceeds ratably with each of the Banks; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such benefitted Bank, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest. Notwithstanding anything contained in this Agreement to the contrary, this subsection 9.8 shall only be applicable to (i) payments received by a Bank in respect of the obligations of the Company under this Agreement and (ii) collateral received from the Company, if any, to secure obligations of the Company under this Agreement. (b) In addition to any rights and remedies of the Banks provided by law, upon (i) the occurrence and during the continuance of an Event of Default, and (ii) the declaration by the Administrative Agent that the Loans are immediately due and payable pursuant to the last paragraph of Section 7, or the occurrence and continuance of an Event of Default specified in clause (i) or (ii) of paragraph (f) of Section 7, each Bank shall have the right, without prior notice to the Company, any such notice being expressly waived by the Company to the extent permitted by applicable law (but without waiving any notices specified in Section 7), upon any amount becoming due and payable by the Company hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether matured or unmatured, at any time held or owing by such Bank or any branch or agency thereof to or for the credit or the account of the Company. Each Bank agrees promptly to notify the Company and the Administrative Agent after any such set-off and application made by such Bank, PROVIDED that the failure to give such notice shall not affect the validity of such set-off and application. 9.9. COUNTERPARTS. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with the Company and the Administrative Agent. 9.10. SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 9.11. INTEGRATION. This Agreement represents the agreement of the Company, the Agents and the Banks with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Company, the Agents or any Bank relative to subject matter hereof not expressly set forth or referred to herein other than any agreements referred to in subsection 2.5(b). 9.12. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 9.13. SUBMISSION TO JURISDICTION; WAIVERS. The Company hereby irrevocably and unconditionally: (a) submits for itself and its property in any legal action or proceeding relating to this Agreement, or for recognition and enforcement of any judgement in respect thereof, to the non-exclusive general jurisdiction of the Courts of the State of New York, the courts of the United States for the Southern District of New York, and appellate courts from any thereof; (b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Company at its address set forth in subsection 9.2 or at such other address of which the Bank shall have been notified pursuant thereto; and (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction. 9.14. WAIVERS OF JURY TRIAL. THE COMPANY, THE AGENTS AND THE BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written. THE CIT GROUP, INC. By: /s/ Glenn A. Votek ---------------------------------------- Name: Glenn A. Votek Title: Executive Vice President & Treasurer THE CHASE MANHATTAN BANK, as Administrative Agent and as a Bank By: /s/ Roger Parker ---------------------------------------- Name: Roger Parker Title: Vice President CHASE SECURITIES INC., as Arranger By: /s/ R. Craig Tracy ---------------------------------------- Name: R. Craig Tracy Title: Vice President BARCLAYS BANK PLC, as Syndication Agent and as a Bank By: /s/ Douglas Bernegger ---------------------------------------- Name: Douglas Bernegger Title: Director BANK OF AMERICA, N.A., as Syndication Agent and as a Bank By: /s/ Nelson D. Albrecht ---------------------------------------- Name: Nelson D. Albrecht Title: Vice President CITIBANK, N.A., as Syndication Agent and as a Bank By: /s/ Robert B. Goldstein ---------------------------------------- Name: Robert B. Goldstein Title: Managing Director THE DAI-ICHI KANGYO BANK, LTD., as Syndication Agent and as a Bank By: /s/ Nicholas A. Fiore ---------------------------------------- Name: Nicholas A. Fiore Title: Assistant Vice President ABN AMRO BANK N.V. By: /s/ Parker H. Douglas ---------------------------------------- Name: Parker H. Douglas Title: Group Vice President By: /s/ Neil R. Stein ---------------------------------------- Name: Neil R. Stein Title: Assistant Vice President DRESDNER BANK AG, NEW YORK BRANCH AND GRAND CAYMAN BRANCH By: /s/ J. Curtin Beaudouin ---------------------------------------- Name: J. Curtin Beaudouin Title: First Vice President By: /s/ Stephen A. Kovach ---------------------------------------- Name: Stephen A. Kovach Title: Assistant Vice President FIRST UNION NATIONAL BANK By: /s/ Jane W. Workman ---------------------------------------- Name: Jane W. Workman Title: Senior Vice President LEHMAN COMMERCIAL PAPER INC. By: /s/ Michele Swanson ---------------------------------------- Name: Michele Swanson Title: Authorized Signatory NATIONAL AUSTRALIA BANK LIMITED, A.C.N. 004044937 By: /s/ Bill Schmid ---------------------------------------- Name: Bill Schmid Title: Vice President SOCIETE GENERALE BANK NY BRANCH By: /s/ Charles D. Fischer, Jr. ---------------------------------------- Name: Charles D. Fischer, Jr. Title: Vice President UBS AG, STAMFORD BRANCH By: /s/ Gregory Raue ---------------------------------------- Name: Gregory Raue Title: Director By: /s/ Wilfred Saint ---------------------------------------- Name: Wilfred Saint Title: Associate Director WESTDEUTSCHE LANDESBANK GIROZENTRALE By: /s/ Alan S. Bookspan ---------------------------------------- Name: Alan S. Bookspan Title: Director By: /s/ Leo G. Kapakos ---------------------------------------- Name: Leo G. Kapakos Title: Associate Director BANK ONE, NA By: /s/ Cory M. Helfand ---------------------------------------- Name: Cory M. Helfand Title: Vice President BANQUE NATIONALE DE PARIS By: /s/ Veronique Marcus ---------------------------------------- Name: Veronique Marcus Title: Vice President By: /s/ Phil Truesdale ---------------------------------------- Name: Phil Truesdale Title: Vice President CREDIT SUISSE FIRST BOSTON By: /s/ Jay Chall ---------------------------------------- Name: Jay Chall Title: Director By: /s/ James H. Lee ---------------------------------------- Name: James H. Lee Title: Assistant Vice President DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN ISLANDS BRANCHES By: /s/ Gayma Z. Shivnarain ---------------------------------------- Name: Gayma Z. Shivnarain Title: Director By: /s/ Suzanne R. Kissling ---------------------------------------- Name: Suzanne R. Kissling Title: Managing Director MORGAN GUARANTY TRUST COMPANY OF NEW YORK By: /s/ Maria Dell'Aquila ---------------------------------------- Name: Maria Dell'Aquila Title: CANADIAN IMPERIAL BANK OF COMMERCE By: /s/ Robert Mendeles ---------------------------------------- Name: Robert Mendeles Title: Executive Director ROYAL BANK OF CANADA By: /s/ C.W. Evans ---------------------------------------- Name: C.W. Evans Title: Senior Account Manager FLEET BANK, N.A. By: /s/ Robert T.P. Storer ---------------------------------------- Name: Robert T.P. Storer Title: Senior Vice President MELLON BANK, N.A. By: /s/ David B. Wirl ---------------------------------------- Name: David B. Wirl Title: Assistant Vice President HSBC BANK USA By: /s/ Johan Sorensson ---------------------------------------- Name: Johan Sorensson Title: Vice President LLOYDS TSB BANK PLC By: /s/ Michael J. Gilligan ---------------------------------------- Name: Michael J. Gilligan Title: Director, Financial Institutions, USA By: /s/ Ian Dimmock ---------------------------------------- Name: Ian Dimmock Title: Vice President, Acquisition Finance THE BANK OF NEW YORK By: /s/ Ernest Fung ---------------------------------------- Name: Ernest Fung Title: Vice President TORONTO DOMINION (TEXAS), INC. By: /s/ Ann S. Slanis ---------------------------------------- Name: Ann S. Slanis Title: Vice President COMERICA BANK By: /s/ James R. Grossett ---------------------------------------- Name: James R. Grossett Title: First Vice President NORDDEUTSCHE LANDESBANK GIROZENTRALE NEW YORK BRANCH AND/OR CAYMAN ISLANDS BRANCH By: /s/ Josef Haas ---------------------------------------- Name: Josef Haas Title: Vice President By: /s/ Stephen K. Hunter ---------------------------------------- Name: Stephen K. Hunter Title: Senior Vice President SUNTRUST BANK By: /s/ W. David Wisdom ---------------------------------------- Name: W. David Wisdom Title: Vice President BANK OF MONTREAL By: /s/ Brian L. Banke ---------------------------------------- Name: Brian L. Banke Title: Director ALLFIRST BANK By: /s/ Robert M. Beaver ---------------------------------------- Name: Robert M. Beaver Title: Vice President BANCA NAZIONALE DEL LAVORO S.P.A. - NEW YORK BRANCH By: /s/ Frederic W. Hall ---------------------------------------- Name: Frederic W. Hall Title: Vice President By: /s/ Leonardo Valentini ---------------------------------------- Name: Leonardo Valentini Title: First Vice President BANCA MONTE DEI PASCHI DI SIENA S.P.A. By: /s/ Giulio Natalicchi ---------------------------------------- Name: Giulio Natalicchi Title: Senior Vice President & General Manager By: /s/ Brian R. Landy ---------------------------------------- Name: Brian R. Landy Title: Vice President FIRST HAWAIIAN BANK By: /s/ Jeffrey N. Higashi ---------------------------------------- Name: Jeffrey N. Higashi Title: Assistant Vice President WELLS FARGO BANK, N.A. By: /s/ Michael J. Giese ---------------------------------------- Name: Michael J. Giese Title: Assistant Vice President By: /s/ Edward J. Meyer, Jr. ---------------------------------------- Name: Edward J. Meyer, Jr. Title: Vice President ARAB BANK PLC By: /s/ Nofal Barber ---------------------------------------- Name: Nofal Barber Title: E.V.P. and Branch Manager BANCA DI ROMA By: /s/ William J. Fontana ---------------------------------------- Name: William J. Fontana Title: Vice President By: /s/ Alessandro Paoli ---------------------------------------- Name: Alessandro Paoli Title: Assistant Treasurer SUMMIT BANK By: /s/ Michael P. Thomson ---------------------------------------- Name: Michael P. Thomson Title: Vice President BANCA POPOLARE DI MILANO, NEW YORK BRANCH By: /s/ Fulvio Montanari ---------------------------------------- Name: Fulvio Montanari Title: First Vice President By: /s/ Patrick F. Dillon ---------------------------------------- Name: Patrick F. Dillon Title: Assistant Vice President EX-10.3 5 a2069484zex-10_3.txt EXHIBIT 10.3 Exhibit 10.3 AMENDMENT AMENDMENT, dated as of March 27, 2001 (the "AMENDMENT"), to the 364-DAY CREDIT AGREEMENT, dated as of March 28, 2000 (the "CREDIT AGREEMENT"; unless otherwise defined herein, capitalized terms which are defined in the Credit Agreement are used herein as defined therein) among THE CIT GROUP, INC., a Delaware corporation (the "BORROWER"), the several banks and other financial institutions from time to time parties to the Credit Agreement (the "LENDERS"), JPMorgan, a division of CHASE SECURITIES INC., as lead arranger and bookrunner (in such capacity, the "ARRANGER"), BARCLAYS BANK PLC, BANK OF AMERICA, N.A., CITIBANK, N.A. and THE DAI-ICHI KANGYO BANK, LIMITED, as syndication agents (in such capacity, the "SYNDICATION AGENTS") and THE CHASE MANHATTAN BANK ("CHASE") (in such capacity, the "ADMINISTRATIVE AGENT"). W I T N E S S E T H : - - - - - - - - - - WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make, and have made, certain loans and other extensions of credit to the Borrower; and WHEREAS, the Borrower has requested, and, upon this Amendment becoming effective, the Lenders have agreed, that certain provisions of the Credit Agreement be amended in the manner provided for in this Amendment; NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in consideration of the premises, the parties hereto hereby agree as follows: SECTION I. AMENDMENTS 1.1. AMENDMENT TO SUBSECTION 1.1. Subsection 1.1 of the Credit Agreement is hereby amended by deleting therefrom the definition of the following defined term in its entirety and inserting in lieu thereof the following new definition in proper alphabetical order: "TERMINATION DATE": March 26, 2002, as such date may be extended from time to time in accordance with subsection 2.7. 1.2. AMENDMENT TO SUBSECTION 2.4(A). The first sentence of subsection 2.4(a) of the Credit Agreement is hereby amended by adding the following proviso at the end of such sentence: "; PROVIDED, that if the Termination Date is extended pursuant to Section 2.7(a) and there are any Non-Extending Banks, any Loans owing to such Non-Extending Banks on the Termination Date applicable to such Non-Extending Bank shall be repaid on such Termination Date." 1.3. AMENDMENT TO SUBSECTION 3.1. Subsection 3.1 of the Credit Agreement is hereby amended by substituting "December 31, 1999" for "December 31, 1998". 13 1.4. AMENDMENT TO SUBSECTION 3.2. Subsection 3.2 of the Credit Agreement is hereby amended by substituting "December 31, 1999" for "December 31, 1998". 1.5. AMENDMENT TO SUBSECTION 3.3. Subsection 3.3 of the Credit Agreement is hereby amended by substituting "December 31, 1999" for "December 31, 1998" and "1999" for "1998". 1.6. AMENDMENT TO SCHEDULE I. Schedule I of the Credit Agreement is hereby amended by deleting the existing Schedule I in its entirety and substituting in lieu thereof a new Schedule I, which is attached hereto. SECTION II. MISCELLANEOUS 2.1. CONDITIONS TO EFFECTIVENESS OF AMENDMENT. This Amendment shall become effective as of the date first set forth above (the "AMENDMENT EFFECTIVE DATE") upon satisfaction of the following conditions: (a) CORPORATE PROCEEDINGS OF THE COMPANY. The Administrative Agent shall have received, with a counterpart for each Bank, a copy of the resolutions, in form and substance satisfactory to the Administrative Agent, of the Board of Directors of the Company authorizing (i) the execution, delivery and performance of this Agreement, and (ii) the borrowings contemplated hereunder, certified by the Secretary or an Assistant Secretary of the Company as of the Closing Date pursuant to a certificate substantially in the form of Exhibit A, which certificate shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded. (b) CORPORATE DOCUMENTS. The Administrative Agent shall have received, with a counterpart for each Bank, true and complete copies of the certificate of incorporation and by-laws of the Company, certified as of the Closing Date as complete and correct copies thereof by the Secretary or an Assistant Secretary of the Company. (c) LEGAL OPINIONS. The Administrative Agent shall have received, with a counterpart for each Bank, (i) the executed legal opinion of the general counsel of the Company, substantially in the form of Exhibit B-1 and (ii) the executed legal opinion of Simpson Thacher & Bartlett, counsel to the Administrative Agent, substantially in the form of Exhibit B-2. (d) EXECUTED COPIES. The Administrative Agent shall have received counterparts of this Amendment duly executed and delivered by the Borrower, the Administrative Agent, the Lenders constituting the Required Lenders under the Credit Agreement and all Lenders having Commitments listed in Schedule I. 2.2. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants to each Lender that as of the effective date of this Amendment: (a) this Amendment constitutes the legal, valid and binding obligation of the Borrower, enforceable against it in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws affecting creditors' rights generally, by general equitable principles (whether enforcement is sought by proceedings in equity or at law) 14 and an implied covenant of good faith and fair dealing; (b) the representations and warranties made by the Loan Parties in the Loan Documents are true and correct in all material respects on and as of the date hereof (except to the extent that such representations and warranties are expressly stated to relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date) and (c) no Default or Event of Default shall have occurred and be continuing as of the date hereof. 2.3. COUNTERPARTS. This Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Amendment signed by all the parties shall be lodged with the Borrower and the Administrative Agent. The execution and delivery of the Amendment by any Lender shall be binding upon each of its successors and assigns (including Transferees of its commitments and Loans in whole or in part prior to effectiveness hereof) and binding in respect of all of its commitments and Loans, including any acquired subsequent to its execution and delivery hereof and prior to the effectiveness hereof. 2.4. CONTINUING EFFECT; NO OTHER AMENDMENTS. Except to the extent the Credit Agreement is expressly amended hereby, all of the terms and provisions of the Credit Agreement and the other Loan Documents are and shall remain in full force and effect. This Amendment shall constitute a Loan Document. 2.5. PAYMENT OF EXPENSES. The Borrower agrees to pay and reimburse the Administrative Agent for all of its out-of-pocket costs and reasonable expenses incurred to date in connection with this Amendment and the other Loan Documents, including, without limitation, the reasonable fees and disbursements of legal counsel to the Administrative Agent. 2.6. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. [Rest of page left intentionally blank] IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written. THE CIT GROUP, INC. By: ---------------------------------- Name: Title: THE CHASE MANHATTAN BANK, as Administrative Agent and as a Bank By: ---------------------------------- Name: Title: JPMORGAN, a division of CHASE SECURITIES INC., as Lead Arranger and Bookrunner By: ---------------------------------- Name: Title: BARCLAYS BANK PLC, as Syndication Agent and as a Bank By: ---------------------------------- Name: Title: BANK OF AMERICA, NA, as Syndication Agent and as a Bank By: ---------------------------------- Name: Title: CITIBANK, N.A., as Syndication Agent and as a Bank By: ---------------------------------- Name: Title: THE DAI-ICHI KANGYO BANK, LIMITED., as Syndication Agent and as a Bank By: ---------------------------------- Name: Title: ABN AMRO BANK N.V. By: ---------------------------------- Name: Title: By: ---------------------------------- Name: Title: DRESDNER BANK AG, NEW YORK BRANCH AND/OR CAYMAN ISLANDS BRANCHES By: ---------------------------------- Name: Title: By: ---------------------------------- Name: Title: FIRST UNION NATIONAL BANK By: ---------------------------------- Name: Title: LEHMAN COMMERCIAL PAPER INC. By: ---------------------------------- Name: Title: NATIONAL AUSTRALIA BANK LIMITED, A.C.N. 004044937 By: ---------------------------------- Name: Title: SOCIETE GENERALE, NEW YORK BRANCH By: ---------------------------------- Name: Title: UBS AG, STAMFORD BRANCH By: ---------------------------------- Name: Title: By: ---------------------------------- Name: Title: WESTDEUTSCHE LANDESBANK GIROZENTRALE By: ---------------------------------- Name: Title: By: ---------------------------------- Name: Title: BANK ONE, NA By: ---------------------------------- Name: Title: BNP PARIBAS By: ---------------------------------- Name: Title: By: ---------------------------------- Name: Title: CREDIT SUISSE FIRST BOSTON By: ---------------------------------- Name: Title: By: ---------------------------------- Name: Title: DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN ISLANDS BRANCHES By: ---------------------------------- Name: Title: By: ---------------------------------- Name: Title: CANADIAN IMPERIAL BANK OF COMMERCE By: ---------------------------------- Name: Title: ROYAL BANK OF CANADA By: ---------------------------------- Name: Title: FLEET NATIONAL BANK By: ---------------------------------- Name: Title: HSBC BANK USA By: ---------------------------------- Name: Title: LLOYDS TSB BANK PLC By: ---------------------------------- Name: Title: By: ---------------------------------- Name: Title: THE BANK OF NEW YORK By: ---------------------------------- Name: Title: TORONTO-DOMINION (TEXAS), INC. By: ---------------------------------- Name: Title: By: ---------------------------------- Name: Title: COMERICA BANK By: ---------------------------------- Name: Title: NORDDEUTSCHE LANDESBANK GIROZENTRALE NEW YORK BRANCH AND/OR CAYMAN ISLANDS BRANCH By: ---------------------------------- Name: Title: By: ---------------------------------- Name: Title: BANK OF MONTREAL By: ---------------------------------- Name: Title: By: ---------------------------------- Name: Title: ALLFIRST BANK By: ---------------------------------- Name: Title: FIRST HAWAIIAN BANK By: ---------------------------------- Name: Title: WELLS FARGO BANK, N.A. By: ---------------------------------- Name: Title: By: ---------------------------------- Name: Title: ARAB BANK PLC By: ---------------------------------- Name: Title: BANCA DI ROMA By: ---------------------------------- Name: Title: By: ---------------------------------- Name: Title: THE BANK OF NOVA SCOTIA By: ---------------------------------- Name: Title: EX-10.4 6 a2069484zex-10_4.txt EXHIBIT 10.4 EXHIBIT 10.4 ASSUMPTION AGREEMENT ASSUMPTION AGREEMENT dated as of June 1, 2001, made by THE CIT GROUP, INC. (formerly known as Tyco Acquisition Corp. XX (NV)), a Nevada corporation, ("CIT") and CIT HOLDINGS (NV) INC. (formerly known as Tyco Acquisition Corp. XIX (NV)), a Nevada corporation ("CIT HOLDINGS"), to the 364-DAY CREDIT AGREEMENT, dated as of March 28, 2000 (the "ORIGINAL CREDIT AGREEMENT"), as amended by a certain Amendment dated as of March 27, 2001 (the "AMENDMENT", collectively along with the Original Credit Agreement, the "CREDIT AGREEMENT"; unless otherwise defined herein, capitalized terms which are defined in the Credit Agreement are used herein as defined therein) among THE CIT GROUP, INC., a Delaware corporation (the "CIT DELAWARE"), the several banks and other financial institutions from time to time parties to the Credit Agreement (the "LENDERS"), JPMorgan, a division of CHASE SECURITIES INC., as sole arranger and bookrunner (in such capacity, the "ARRANGER"), BARCLAYS BANK PLC, BANK OF AMERICA, N.A., CITIBANK, N.A. and THE DAI-ICHI KANGYO BANK, LIMITED, as syndication agents (in such capacity, the "SYNDICATION AGENTS") and THE CHASE MANHATTAN BANK ("CHASE") (in such capacity, the "ADMINISTRATIVE AGENT"). W I T N E S S E T H WHEREAS, CIT Delaware, the Lenders, the Arranger, the Syndication Agents and the Administrative Agent are parties to the Credit Agreement pursuant to which Lenders have agreed to make certain loans and other extensions of credit to CIT Delaware; WHEREAS, effective as of the date hereof, CIT Delaware has merged into CIT Holdings pursuant to a Certificate of Merger filed with the Delaware Secretary of State on the date hereof and Articles of Merger filed with the Nevada Secretary of State on the date hereof (the "MERGER"); WHEREAS, immediately following the Merger CIT Holdings will transfer all of the assets owned by CIT Delaware immediately prior to the Merger, whether tangible or intangible, including, without limitation, any and all claims, judgments, contractual rights, causes of action and other rights, whether legal or equitable (the "ASSETS"), to CIT, and CIT will accept the contribution of the Assets and assume substantially all of the liabilities of CIT Delaware, whether fixed or contingent, liquidated or unliquidated, matured or unmatured, secured or unsecured (collectively, the "LIABILITIES"), in each case as the same shall exist immediately following the Merger (such assignment and assumption, the "TRANSFER"), pursuant to, and in accordance with, the terms and conditions of the Contribution and Assumption Agreement (the "CONTRIBUTION AND ASSUMPTION AGREEMENT"); WHEREAS, pursuant to the terms of the Merger and applicable law, CIT Holdings succeeded to all of the rights and obligations of CIT Delaware, and pursuant to the Contribution and Assumption Agreement, CIT Holdings has transferred to CIT all such rights and CIT has assumed all such obligations; WHEREAS, pursuant to Section 6.2 of the Credit Agreement if CIT Delaware merges with or into another corporation or sells substantially all of its assets or property to another corporation, the surviving corporation and/or the purchaser of the property and assets shall expressly assume the obligations of the Company under the Credit Agreement and expressly agree to be bound by all other provisions applicable to the Company under the Credit Agreement; and WHEREAS, pursuant to this Assumption Agreement the parties wish to provide that CIT Holdings shall become the "Company" under the Credit Agreement by reason of the Merger and that, immediately thereafter, CIT shall become the "Company" by reason of the Transfer. NOW, THEREFORE, in consideration of the premises and the agreements herein, CIT LLC hereby agrees as follows: ARTICLE I ASSUMPTION AND RELEASE Section 1.1. ASSUMPTION AND SUBSTITUTION. (a) Pursuant to the Merger and this Assumption Agreement, CIT Holdings has expressly assumed, as its direct and primary obligation, the due and punctual performance and observance of all of the covenants and conditions to be performed or observed by CIT Delaware under the Credit Agreement, and has succeeded to, and has been substituted for, CIT Delaware, with the same effect as if CIT Holdings had been named in the Credit Agreement. (b) Pursuant to the Transfer and this Assumption Agreement, CIT has expressly assumed the due and punctual performance and observance of all the covenants and conditions to be performed or observed by CIT Holdings, as successor of CIT Delaware, under the Credit Agreement, and has succeeded to, and is substituted for, CIT Delaware and CIT Holdings, with the same effect as if CIT had been named in the Credit Agreement. ARTICLE II REPRESENTATIONS AND WARRANTIES Section 2.1. REPRESENTATIONS AND WARRANTIES OF CIT HOLDINGS. CIT Holdings hereby represents and warrants as follows: (a) CIT Holdings (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and (ii) has the power and authority to execute, deliver and perform this Assumption Agreement. (b) The execution, delivery and performance by CIT Holdings of this Assumption Agreement (i) have been duly authorized by all necessary company action, (ii) do not and will not contravene its articles of incorporation or bylaws, any material law or any material contractual restriction binding on or affecting CIT Holdings or any of -2- its material properties and (iii) do not and will not result in or require the creation of any lien, security interest or other charge or encumbrance upon or with respect to any of its material properties. (c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or other regulatory body is required for the due execution, delivery and performance by CIT Holdings of this Assumption Agreement or for its assumption of the obligations of CIT Delaware under the Credit Agreement. (d) This Assumption Agreement is, the legal, valid and binding obligation of CIT Holdings, enforceable against CIT Holdings in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). (e) No litigation, investigation or proceeding of or before any arbitrator or governmental authority or other regulatory body is pending or, to the knowledge of CIT Holdings, threatened by or against CIT Holdings with respect to this Assumption Agreement or any of the transactions contemplated hereby. (f) CIT Holdings was not, effective immediately following the Merger, in default in the performance of any covenant or condition in the Credit Agreement. Section 2.2. REPRESENTATIONS AND WARRANTIES OF CIT. CIT hereby represents and warrants as follows: (a) CIT (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and (ii) has the power and authority to assume the obligations of Corporation under the Credit Agreement and to execute, deliver and perform this Assumption Agreement. (b) The execution, delivery and performance by CIT of this Assumption Agreement and the assumption of the obligations of CIT Holdings under the Credit Agreement (i) have been duly authorized by all necessary company action, (ii) do not and will not contravene its articles of incorporation or bylaws, any material law or any material contractual restriction binding on or affecting CIT or any of its material properties and (iii) do not and will not result in or require the creation of any lien, security interest or other charge or encumbrance upon or with respect to any of its material properties. (c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or other regulatory body is required for the due execution, delivery and performance by CIT of this Assumption Agreement or for its assumption of the obligations of CIT Holdings under the Credit Agreement. (d) This Assumption Agreement is the legal, valid and binding obligation of CIT, enforceable against CIT in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws -3- affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). (e) No litigation, investigation or proceeding of or before any arbitrator or governmental authority or other regulatory body is pending or, to the knowledge of CIT, threatened by or against CIT with respect to this Assumption Agreement or any of the transactions contemplated hereby. (f) CIT is not, effective immediately following the Transfer, in default in the performance of any covenant or condition in the Credit Agreement. ARTICLE III FURTHER ASSURANCES REQUIRED Section 3.1. DOCUMENTS. The Administrative Agent shall have received from CIT (a) the executed legal opinion of Lionel Sawyer & Collins, Nevada counsel to CIT, substantially in the form of Exhibit A-1 and (b) the executed legal opinion of the general counsel of CIT, substantially in the form of Exhibit A-2. Section 3.2. FURTHER ASSURANCES REQUIRED. At any time and from time to time, upon the Administrative Agent's request, CIT Holdings and CIT will promptly execute and deliver such documents and instruments and take such further actions as the Administrative Agent may reasonably request to effect the purposes of this Assumption Agreement, at their respective cost and expense. ARTICLE IV MISCELLANEOUS Section 4.1. MISCELLANEOUS(a) This Assumption Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. (b) This Assumption Agreement is effective in respect of CIT Holdings, as of the Merger and, in respect of CIT, as of the Transfer. [Rest of page left intentionally blank] -4- IN WITNESS WHEREOF, CIT Holdings and CIT have caused this Assumption Agreement to be executed by an officer thereunto duly authorized, as of the date first above written. CIT HOLDINGS (NV) INC., a Nevada corporation By: --------------------------------------- Name: Title: THE CIT GROUP, INC., a Nevada corporation By: ---------------------------------------- Name: Glenn A. Votek Title: Executive Vice President and Treasurer -5- EX-10.5 7 a2069484zex-10_5.txt EXHIBIT 10.5 Exhibit 10.5 ADDITIONAL BANK AGREEMENT AGREEMENT, dated August 1, 2000, to the $3,670,000,000 364-Day Credit Agreement dated as of March 28, 2000 (as amended, supplemented or otherwise modified from time to time, the "364-DAY CREDIT AGREEMENT") among THE CIT GROUP, INC., a Delaware corporation (the "COMPANY"), the several banks and other financial institutions from time to time parties thereto (the "BANKS"), CHASE SECURITIES INC., as sole arranger and book manager, BARCLAYS BANK PLC, BANK OF AMERICA, N.A., CITIBANK, N.A. and THE DAI-ICHI KANGYO BANK, LIMITED, as syndication agents and THE CHASE MANHATTAN BANK, as Administrative Agent (in such capacity, the "ADMINISTRATIVE AGENT"). W I T N E S S E T H: WHEREAS, the 364-Day Credit Agreement provides in subsection 2.1(c) thereof that any bank or financial institution, although not originally a party thereto, may become a party to the 364-Day Credit Agreement in accordance with the terms thereof by entering into a written agreement with the Company and the Administrative Agent in form and substance reasonably satisfactory to the Administrative Agent; and WHEREAS, Merrill Lynch Bank USA (the "ADDITIONAL BANK") was not an original party to the 364-Day Credit Agreement but now desires to become a party thereto; NOW, THEREFORE, the Additional Bank hereby agrees as follows: 1. The Additional Bank agrees to be bound by the provisions of the 364-Day Credit Agreement, and agrees that it shall become a Bank for all purposes of the 364-Day Credit Agreement to the same extent as if originally a party thereto, with a Commitment of $50,000,000. 2. The Additional Bank (a) represents and warrants that it is legally authorized to enter into this Agreement; (b) confirms that it has received a copy of the 364-Day Credit Agreement, together with copies of the financial statements delivered pursuant to subsection 3.1 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement; (c) agrees that it has made and will, independently and without reliance upon the Administrative Agent or any other Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the 364-Day Credit Agreement or any instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Administrative Agent to take such action as administrative agent on its behalf and to exercise such powers and discretion under the 364-Day Credit Agreement or any instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the provisions of the 364-Day Credit Agreement and will 2 perform in accordance with its terms all the obligations which by the terms of the 364-Day Credit Agreement are required to be performed by it as a Bank including, without limitation, its obligations pursuant to subsection 2.19 of the 364-Day Credit Agreement. 3. The Additional Bank's address for notices for the purposes of the 364-Day Credit Agreement is as follows: Merrill Lynch Bank USA 15 W. South Temple Suite 300 Salt Lake City, UT 84101 Attention: Kevin Imlay Telephone: (801) 526-8310 Telecopy: (801) 521-6466 4. This Agreement will become effective upon receipt by the Administrative Agent of (a) counterparts to this Agreement and (b) a favorable written opinion of counsel for the Company, addressed to the Banks, with respect to the matters set forth in paragraphs 2, 3 and 4 of Exhibit B-1 to the 364-Day Credit Agreement. 5. Terms defined in the 364-Day Credit Agreement shall have their defined meanings when used herein. IN WITNESS WHEREOF, the Additional Bank has caused this Agreement to be executed and delivered by a duly authorized officer on the date first above written. MERRILL LYNCH BANK USA By --------------------------------- Title: President Accepted this 1st day of August, 2000: THE CIT GROUP, INC. By /s/ Glenn A. Votek ------------------------------------- Title: GLENN A. VOTEK EXECUTIVE VICE PRESIDENT TREASURER 3 Accepted this 1st day of August, 2000: THE CHASE MANHATTAN BANK, as Administrative Agent By ------------------------------------- Title: Vice President EX-10.6 8 a2069484zex-10_6.txt EXHIBIT 10.6 EXHIBIT 10.6 ================================================================================ THE CIT GROUP, INC. ----------------------------------- $3,670,000,000 5-YEAR CREDIT AGREEMENT Dated as of March 28, 2000 ----------------------------------- CHASE SECURITIES INC., as Lead Arranger and Book Manager THE CHASE MANHATTAN BANK, as Administrative Agent BARCLAYS BANK PLC, as Syndication Agent BANK OF AMERICA, N.A., as Syndication Agent CITIBANK, N.A., as Syndication Agent THE DAI-ICHI KANGYO BANK, LIMITED, as Syndication Agent ================================================================================ TABLE OF CONTENTS
Page ---- SECTION 1. DEFINITIONS............................................................................................1 1.1 Defined Terms........................................................................................1 1.2 Other Definitional Provisions.......................................................................12 SECTION 2. AMOUNT AND TERMS OF COMMITMENT........................................................................12 2.1 Commitments.........................................................................................12 2.2 Revolving Credit Borrowing Procedure................................................................15 2.3 Competitive Bid Borrowing Procedure.................................................................15 2.4 Repayment of Loans; Evidence of Debt................................................................17 2.5 Facility Fee; Administrative Agent's Fee............................................................18 2.6 Utilization Fee.....................................................................................19 2.7 Extension of Termination Date.......................................................................19 2.8 Termination or Reduction of Commitment..............................................................20 2.9 Optional Prepayments................................................................................21 2.10 Conversion and Continuation Options................................................................21 2.11 Applicable Interest Rate Margins, Facility Fee Rate and Utilization Fee............................22 2.12 Minimum Amounts of Tranches........................................................................22 2.13 Interest Rates and Payment Dates...................................................................23 2.14 Computation of Interest and Fees...................................................................23 2.15 Inability to Determine Interest Rate...............................................................24 2.16 Pro Rata Treatment and Payments....................................................................24 2.17 Illegality.........................................................................................25 2.18 Requirements of Law................................................................................26 2.19 Taxes..............................................................................................27 2.20 Indemnity..........................................................................................30 2.21 Actions of Banks...................................................................................30 2.22 Lending Installations..............................................................................30 2.23 Removal of Banks...................................................................................31 2.24 Replacement of Banks...............................................................................31 2.25 Swing Line Commitments.............................................................................31 SECTION 3. REPRESENTATIONS AND WARRANTIES........................................................................33 3.1 Financial Condition.................................................................................33 3.2 No Change...........................................................................................34 3.3 Corporate Existence; Compliance with Law............................................................34 3.4 Corporate Power; Authorization; Enforceable Obligations.............................................34 3.5 No Legal Bar........................................................................................34 3.6 No Material Litigation..............................................................................34 3.7 No Default..........................................................................................34 3.8 Aggregation of the Representations and Warranties Relating to Net Worth.............................35 3.9 Federal Regulations.................................................................................35 3.10 ERISA..............................................................................................35 i Page ---- 3.11 Investment Company Act.............................................................................35 3.12 Purpose of Loans...................................................................................35 SECTION 4. CONDITIONS PRECEDENT..................................................................................35 4.1 Conditions to Initial Loans.........................................................................35 4.2 Conditions to Each Loan.............................................................................36 SECTION 5. AFFIRMATIVE COVENANTS.................................................................................37 5.1 Financial Statements................................................................................37 5.2 Payment of Obligations..............................................................................38 5.3 Conduct of Business and Maintenance of Existence....................................................38 5.4 Notices.............................................................................................38 5.5 Status of Obligations...............................................................................39 5.6 Maintenance of Property.............................................................................39 5.7 Payment of Taxes....................................................................................39 5.8 Use of Proceeds.....................................................................................40 SECTION 6. NEGATIVE COVENANTS....................................................................................40 6.1 Negative Pledge.....................................................................................40 6.2 Consolidations, Mergers and Sales of Assets.........................................................42 6.3 Net Worth...........................................................................................43 SECTION 7. EVENTS OF DEFAULT.....................................................................................43 SECTION 8. THE AGENTS............................................................................................45 8.1 Appointment.........................................................................................45 8.2 Delegation of Duties................................................................................45 8.3 Exculpatory Provisions..............................................................................45 8.4 Reliance by Administrative Agent....................................................................46 8.5 Notice of Default...................................................................................46 8.6 Non-Reliance on Administrative Agent and Other Banks................................................46 8.7 Indemnification.....................................................................................47 8.8 Administrative Agent in Its Individual Capacity.....................................................47 8.9 Successor Administrative Agent......................................................................47 SECTION 9. MISCELLANEOUS.........................................................................................48 9.1 Amendments and Waivers..............................................................................48 9.2 Notices.............................................................................................49 9.3 No Waiver; Cumulative Remedies......................................................................49 9.4 Survival of Representations and Warranties..........................................................49 9.5 Payment of Expenses and Taxes.......................................................................50 9.6 Successors and Assigns; Participations; Purchasing Banks............................................50 9.7 Dissemination of Information; Confidentiality.......................................................53 9.8 Adjustments.........................................................................................53 1.1 Counterparts........................................................................................54 ii Page ---- 1.2 Severability........................................................................................54 1.3 Integration.........................................................................................54 1.4 GOVERNING LAW.......................................................................................54 1.5 Submission To Jurisdiction; Waivers.................................................................55 1.6 WAIVERS OF JURY TRIAL...............................................................................55
SCHEDULES I Commitments and Bank Information II List of Significant Subsidiaries EXHIBITS A-1 Form of Revolving Credit Note A-2 Form of Competitive Bid Note A-3 Form of Swing Line Note B-1 Form of Opinion of Counsel to the Company B-2 Form of Opinion of Simpson Thacher & Bartlett C Form of Commitment Transfer Supplement D-1 Form of Officer's Certificate D-2 Form of Secretary's Certificate E Form of Incumbency Certificate F Form of Borrowing Notice G Form of Competitive Bid Request H Form of Notice of Competitive Bid Request I Form of Competitive Bid J Form of Competitive Bid Accept/Reject Letter K Form of Exemption Certificate iii 5-YEAR CREDIT AGREEMENT, dated as of March 28, 2000, among THE CIT GROUP, INC., a Delaware corporation (the "Company"), the several banks and other financial institutions from time to time on Schedule I to this Agreement (the "BANKS"), CHASE SECURITIES INC., as sole arranger and book manager (in such capacity, the "ARRANGER"), BARCLAYS BANK PLC, BANK OF AMERICA, N.A., CITIBANK, N.A. and THE DAI-ICHI KANGYO BANK, LIMITED, as syndication agents (in such capacity, the "SYNDICATION AGENTS") and THE CHASE MANHATTAN BANK ("CHASE"), as administrative agent (in such capacity, the "ADMINISTRATIVE AGENT"). W I T N E S S E T H : WHEREAS, the Company has requested $3,670,000,000 in senior unsecured revolving credit facilities from the Banks for general corporate purposes; and WHEREAS, the Banks are willing to provide the requested senior unsecured revolving credit facilities on the terms and conditions set forth herein; NOW, THEREFORE, the parties hereto hereby agree as follows: Section 1. DEFINITIONS 1.1 DEFINED TERMS. As used in this Agreement, the following terms shall have the following meanings: "ADDITIONAL BANK": as defined in subsection 2.1(c)(ii). "ADDITIONAL BANK AGREEMENT": as defined in subsection 2.1(c)(ii). "ADMINISTRATIVE AGENT": as defined in the preamble hereto. "AFFILIATE": as to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. "AGENTS": the collective reference to the Administrative Agent, the Syndication Agents and the Arranger. "AGGREGATE AVAILABLE COMMITMENT": at any time, the excess, if any, of (a) the Aggregate Commitment over (b) the aggregate principal amount of all Loans then outstanding. "AGGREGATE COMMITMENT": the aggregate amount of the Banks' Commitments. "AGGREGATE FACILITIES COMMITMENT": the sum of (a) the Aggregate Commitment PLUS (b) the 364-Day Aggregate Commitment. "AGGREGATE OUTSTANDING EXTENSIONS OF CREDIT": as to any Bank at any time, an amount equal to the sum of (a) the aggregate principal amount of all Loans (other than Swing Line Loans) made by such Bank then outstanding and (b) such Bank's Commitment Percentage of the aggregate principal amount of Swing Line Loans then outstanding. "AGREEMENT": this 5-Year Credit Agreement, as amended, supplemented or otherwise modified from time to time. "AGREEMENT ACCOUNTING PRINCIPLES": GAAP applied in a manner consistent with those principles used in the preparation of the financial statements referred to in subsection 3.1. "APPLICABLE EURODOLLAR MARGIN": as defined in subsection 2.11. "APPLICABLE FACILITY FEE RATE": as defined in subsection 2.11. "APPLICABLE MARGIN": as defined in subsection 2.11. "APPLICABLE RATE": as defined in subsection 2.11. "APPLICABLE UTILIZATION FEE RATE": as defined in subsection 2.11. "ARRANGER": as defined in the preamble hereto. "BANKS": as defined in the preamble hereto. "BARCLAYS": Barclays Bank PLC. "BASE RATE": a rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the Corporate Base Rate in effect on such day, and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. If for any reason the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any reason, including the inability of the Administrative Agent to obtain sufficient quotations in accordance with the terms hereof, the Base Rate shall be determined without regard to clause (b) of the first sentence of this definition until the circumstances giving rise to such inability no longer exist. Any change in the Base Rate due to a change in the Corporate Base Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change in the Corporate Base Rate or the Federal Funds Effective Rate, respectively. The Administrative Agent will give notice promptly to the Company and the Banks of changes in the Base Rate. "BASE RATE LOAN": any Revolving Credit Loan bearing interest at a rate determined by reference to the Base Rate in accordance with Section 2. "BOFA": Bank of America, N.A. 2 "BORROWING": a group of Loans of a single type made by the Banks (or, in the case of a Competitive Bid Borrowing, by the Bank or Banks whose Competitive Bids have been accepted pursuant to subsection 2.3) on a single date and as to which a single Interest Period is in effect. "BORROWING DATE": a date on which a Borrowing is made hereunder. "BUSINESS DAY": a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close. "CHASE": as defined in the preamble hereto. "CITIBANK": Citibank, N.A. "CLOSING DATE": the date on which the conditions precedent set forth in subsection 4.1 are satisfied. "CODE": the Internal Revenue Code of 1986, as amended from time to time. "COMMITMENT": as to any Bank, the obligation of such Bank to make Revolving Credit Loans to the Company hereunder in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Bank's name on Schedule I, as the same may be increased from time to time in accordance with subsection 2.1(c) or decreased or terminated from time to time in accordance with subsection 2.8. "COMMITMENT INCREASE SUPPLEMENT": as defined in subsection 2.1(c)(ii). "COMMITMENT PERCENTAGE": as to any Bank at any time, the percentage of the Aggregate Commitment then constituted by such Bank's Commitment, or, at any time after the Commitments shall have expired or terminated, the percentage which the aggregate principal amount of such Bank's Loans then outstanding constitutes of the aggregate principal amount of the Loans then outstanding (including, with respect to each Bank other than a Swing Line Bank, such Bank's participating interest in outstanding Swing Line Loans and excluding, with respect to each Swing Line Bank, the aggregate amount of participating interests held by other Banks in such Swing Line Bank's Swing Line Loans). "COMMITMENT PERIOD": the period from and including the date hereof to but not including the Termination Date or such earlier date on which the Aggregate Commitment shall terminate as provided herein. "COMMITMENT TRANSFER SUPPLEMENT": as defined in subsection 9.6(c). "COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated, which is under common control with the Company within the meaning of Section 4001 of ERISA or is part of a group which includes the Company and which is treated as a single employer under Section 414 of the Code. 3 "COMPETITIVE BID": an offer by a Bank to make a Competitive Bid Loan pursuant to subsection 2.3. "COMPETITIVE BID ACCEPT/REJECT LETTER": a notification made by the Company pursuant to subsection 2.3(d) in the form of Exhibit J. "COMPETITIVE BID BORROWING": a Borrowing consisting of a Competitive Bid Loan or concurrent Competitive Bid Loans from the Bank or Banks whose Competitive Bids for such Borrowing have been accepted by the Company under the bidding procedure described in subsection 2.3. "COMPETITIVE BID LOAN": a Loan made by a Bank to the Company pursuant to the bidding procedure described in subsection 2.3. Each Competitive Bid Loan shall be a Eurodollar Competitive Bid Loan or a Fixed Rate Loan. "COMPETITIVE BID MATURITY DATE": as to each Competitive Bid Loan, the maturity date specified by the Company for such Competitive Bid Loan in the related Competitive Bid Request. "COMPETITIVE BID RATE": as to any Competitive Bid made by a Bank pursuant to subsection 2.3(b), (i) in the case of a Eurodollar Competitive Bid Loan, the Margin, and (ii) in the case of a Fixed Rate Loan, the fixed rate of interest offered by the Bank making such Competitive Bid. "COMPETITIVE BID REQUEST": a request made pursuant to subsection 2.3 in the form of Exhibit G. "CONTINUING BANKS": as defined in subsection 2.7(a). "CONTRACTUAL OBLIGATION": as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound. "CORPORATE BASE RATE": the rate of interest from time to time announced by Chase at its principal office as its prime commercial lending rate. "DEFAULT": any of the events specified in Section 7, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "DKB": The Dai-Ichi Kangyo Bank, Limited. "DOLLARS" and "$": dollars in lawful currency of the United States. "ERISA": the Employee Retirement Income Security Act of 1974, as amended from time to time. 4 "EURODOLLAR BORROWING": a Borrowing comprised of Eurodollar Loans. "EURODOLLAR COMPETITIVE BID BORROWING": a Borrowing comprised of Eurodollar Competitive Bid Loans. "EURODOLLAR COMPETITIVE BID LOAN": any Competitive Bid Loan bearing interest at a rate determined by reference to the Eurodollar Rate in accordance with the provisions of Section 2. "EURODOLLAR LOAN": any Eurodollar Competitive Bid Loan or Eurodollar Revolving Credit Loan. "EURODOLLAR RATE": with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate of interest determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London time, two Working Days prior to the beginning of such Interest Period. In the event that such rate does not appear on Page 3750 of the Telerate screen (or otherwise on such screen), the "EURODOLLAR RATE" shall be determined by reference to such other publicly available service for displaying eurodollar rates as may be agreed upon by the Administrative Agent and the Company or, in the absence of such agreement, the "EURODOLLAR RATE" shall instead be the rate per annum equal to the average (rounded to the nearest 1/100th of 1%) of the respective rates notified to the Administrative Agent by each of the Reference Banks as the rate at which such Reference Bank is offered Dollar deposits at or about 10:00 A.M., New York City time, two Business Days prior to the beginning of such Interest Period in the interbank eurodollar market where the eurodollar and foreign currency and exchange operations in respect of its Eurodollar Loans are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein and in an amount comparable to the amount of its Eurodollar Loan to be outstanding during such Interest Period. "EURODOLLAR REVOLVING CREDIT BORROWING": a Borrowing comprised of Eurodollar Revolving Credit Loans. "EURODOLLAR REVOLVING CREDIT LOAN": any Revolving Credit Loan bearing interest at a rate determined by reference to the Eurodollar Rate in accordance with the provisions of Section 2. "EVENT OF DEFAULT": any of the events specified in Section 7, PROVIDED that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "EXISTING CREDIT AGREEMENTS": (i) $1,740,000,000 Third Amended and Restated Credit Agreement, dated as of April 23, 1999, among the Company, the lenders party thereto and The Chase Manhattan Bank, as administrative agent; (ii) $1,535,000,000 Amended and Restated Credit Agreement, dated as of April 9, 1999, among AT&T Capital Corporation, Newcourt Credit Group, Inc., Newcourt Credit Group USA Inc., the 5 lenders party thereto and Morgan Guaranty Trust Company of New York, as administrative agent; and (iii) $3,720,000,000 Amended and Restated Credit Agreement, dated as of April 25, 1997, among the Company, the lenders party thereto and The Chase Manhattan Bank, as administrative agent. "EXTENSION NOTICE": as defined in subsection 2.7(a). "FEDERAL FUNDS EFFECTIVE RATE": for any day, a rate per annum equal to (i) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the preceding Business Day) by the Federal Reserve Bank of New York; or (ii) if such rate is not so published for any day which is a Business Day, the average of the quotations for such day at approximately 10:00 A.M., New York City time, on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it. "FEE PAYMENT DATE": the last day of each calendar quarter, commencing March 31, 2000, and the Termination Date. "FINANCING LEASE": any lease of property, real or personal, the obligations of the lessee in respect of which are required in accordance with GAAP to be capitalized on a balance sheet of the lessee. "FIXED RATE BORROWING": a Borrowing comprised of Fixed Rate Loans. "FIXED RATE LOAN": any Competitive Bid Loan bearing interest at a fixed percentage rate per annum (expressed in the form of a decimal to no more than four decimal places) specified by the Bank making such Loan in its Competitive Bid. "GAAP": generally accepted accounting principles in the United States in effect from time to time. "GOVERNMENTAL AUTHORITY": any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "HEDGING AGREEMENT": any swap, cap, collar, floor or other hedging agreement in respect of interest rates or currency exchange rates. For purposes of this Agreement, the amount of any obligations or liabilities in respect of any Hedging Agreement shall be the amounts, including any termination payments, that would be required to be paid to a counterparty upon early termination (in accordance with customary industry standards) rather than any notional amount with regard to which payments may be calculated. "INCREASING BANK": as defined in subsection 2.1(c)(ii). "INDEBTEDNESS": of a Person means such Person's (i) obligations for borrowed money, (ii) obligations representing the deferred purchase price of property or services 6 other than accounts payable arising in the ordinary course of such Person's business, (iii) obligations, whether or not assumed, secured by Liens on property now or hereafter owned or acquired by such Person (other than carriers', warehousemen's, mechanics', repairmen's or other like nonconsensual statutory Liens arising in the ordinary course of business), (iv) obligations which are evidenced by notes, acceptances, or other similar instruments, (v) capitalized lease obligations, (vi) contingent obligations with respect to the Indebtedness of another Person, including but not limited to the obligation or liability of another which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes contingently liable upon; provided that any Indebtedness owing by the Company to any of its Subsidiaries or by any Subsidiary of the Company to the Company or by any Subsidiary of the Company to any other Subsidiary of the Company or any contingent obligation in respect thereof shall not constitute Indebtedness for purposes of this Agreement, and (vii) obligations for which such Person is obligated in respect of a letter of credit. For purposes of this Agreement, Indebtedness shall not include (A) any indebtedness of such Person to the extent (I) such indebtedness does not appear on the financial statement of such Person, (II) such indebtedness is recourse only to certain assets of such Person, and (III) the assets to which such indebtedness is recourse only appear on the financial statements of such Person net of such indebtedness, or (B) any indebtedness or other obligations issued by any Person (or by a trust or other entity established by such Person or any of its affiliates) which are primarily serviced by the cash flows of a discrete pool of receivables, leases or other financial assets which have been sold or transferred by the Company or any Subsidiary in securitization transactions which, in accordance with GAAP, are accounted for as sales for financial reporting purposes. It is understood and agreed that (1) the amount of any Indebtedness described in clause (iii) for which recourse is limited to certain property of such Person shall be the lower of (x) the amount of the obligation and (y) the fair market value of the property of such Person securing such obligation, and (2) the amount of any obligation described in clause (vi) shall be the lower of (x) the stated or determinable amount of the primary obligation in respect of which such contingent obligation is made, and (y) the maximum amount for which such Person may be liable pursuant to the terms of the agreement embodying such contingent obligation unless such primary obligation and the maximum amount for which such Person may be liable are not stated or determinable, in which case the amount of such contingent obligation shall be such Person's maximum, reasonably anticipated liability in respect thereof as determined by such Person in good faith. "INSOLVENCY": with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA. "INTEREST PAYMENT DATE": (a) as to any Base Rate Loan, the last day of each calendar quarter during which such Loan is outstanding and the Termination Date, (b) as to any Loan other than a Base Rate Loan, the last day of the Interest Period applicable thereto and, in the case of a Eurodollar Loan with an Interest Period of more than three months, each day that would have been an Interest Payment Date for such Loan had successive Interest Periods of three months been applicable to such Loan and, in addition, the date the Company converts any Loan into a Loan of a different Type or having a 7 different Interest Period and (c) as to any Swing Line Loan, the last day of each calendar month (or, if such day is not a Business Day, the Business Day first preceding such day) while such Swing Line Loan is outstanding and the date of payment in full of such Swing Line Loan. "INTEREST PERIOD": (a) with respect to any Eurodollar Loan, (i) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Company in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and (ii) thereafter in the case of a Eurodollar Revolving Credit Loan, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Company by irrevocable notice to the Administrative Agent not less than three Working Days prior to the last day of the then current Interest Period with respect thereto; and (b) with respect to any Fixed Rate Loan, the period commencing on the date of such Loan and ending on the date specified in the Competitive Bids in which the offer to make the Fixed Rate Loans comprising such Borrowing were extended, which shall not be earlier than fifteen days after the date of such Loan; PROVIDED that all of the foregoing provisions relating to Interest Periods are subject to the following: (A) if any Interest Period pertaining to a Eurodollar Loan would otherwise end on a day that is not a Working Day, such Interest Period shall be extended to the next succeeding Working Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Working Day; (B) any Interest Period that would otherwise extend beyond the Termination Date shall end on the Termination Date; and (C) any Interest Period pertaining to a Eurodollar Loan that begins on the last Working Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Working Day of a calendar month. "LENDING INSTALLATION": any branch or office of any Bank selected by such Bank to be a Lending Installation in accordance with subsection 2.22. "LIEN": any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Financing Lease having substantially the same economic effect as any of the foregoing). 8 "LOAN": a Competitive Bid Loan, a Revolving Credit Loan or a Swing Line Loan, whether made as a Eurodollar Loan, a Fixed Rate Loan or a Base Rate Loan, as permitted hereby. "LT RATING": the rating of senior, unsecured long-term indebtedness for borrowed money of the Company, without third-party credit enhancement. "MARGIN": as to any Eurodollar Competitive Bid Loan, the margin (expressed as a percentage rate per annum in the form of a decimal to no more than four decimal places) to be added to or subtracted from the Eurodollar Rate to determine the interest rate applicable to such Loan, as specified in the Competitive Bid relating to such Loan. "MATERIAL ADVERSE EFFECT": (a) a material adverse effect on the ability of the Company to perform its obligations under this Agreement (other than any such material adverse effect arising as a result of a general disruption in capital markets), or (b) a material adverse effect on the validity or enforceability against the Company of this Agreement or the material rights or remedies of the Administrative Agent or the Banks hereunder. "MATURING SWING LINE LOANS": as defined in subsection 2.25(c). "MOODY'S": Moody's Investors Service, Inc. and its successors. "MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA. "NET WORTH": at any date of determination, total shareholders' equity of the Company and its Subsidiaries on a consolidated basis determined in accordance with Agreement Accounting Principles. "NON-EXTENDING BANKS": as defined in subsection 2.7(a). "OTHER BANK": as defined in subsection 2.1(c)(i). "PARTICIPANT": as defined in subsection 9.6(b). "PBGC": the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA. "PERSON": an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature. "PLAN": at a particular time, any employee benefit plan which is covered by ERISA and in respect of which the Company or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA. 9 "REFERENCE BANKS": Chase, Barclays, BofA, Citibank and DKB. "REGISTER": as defined in subsection 9.6(d). "REGULATION U": Regulation U of the Board of Governors of the Federal Reserve System. "REORGANIZATION": with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA. "REPORTABLE EVENT": any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day notice period is waived under subsection .23, .24, .26, .28 or .30 of PBGC Reg. ss4043. "REQUIRED BANKS": at a particular time, Banks whose Commitment Percentages aggregate at least 51% or, if the Aggregate Commitment has been terminated or for purposes of any decision to accelerate the Loans pursuant to Section 7, Banks in the aggregate holding at least 51% of the aggregate unpaid principal amount of the outstanding Loans. "REQUIREMENT OF LAW": as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or final determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any material portion of its property or to which such Person or any material portion of its property is subject. "RESPONSIBLE OFFICER": the chief executive officer, the vice chairman, the president, any vice president of the Company or, with respect to financial matters, (a) the chief financial officer of the Company, (b) the treasurer of the Company, or (c) the controller of the Company. "REVOLVING CREDIT BORROWING": a Borrowing consisting of simultaneous Revolving Credit Loans from each of the Banks. "REVOLVING CREDIT LOAN": a revolving credit loan made by a Bank to the Company pursuant to subsection 2.1. Each Revolving Credit Loan shall be a Eurodollar Revolving Credit Loan or a Base Rate Loan. "SEC": the Securities and Exchange Commission and any succeeding or analogous governmental body or agency. "S&P": Standard and Poor's Ratings Services and its successors. "SIGNIFICANT SUBSIDIARIES": (i) any Subsidiary listed on Schedule II attached hereto, and (ii) any other Subsidiary which fits the definition of Significant Subsidiary contained in Rule 1-02 of Regulation S-X promulgated by the SEC, other than a Subsidiary that is a special purpose entity formed for the purpose of securitizing, selling 10 for securitization or otherwise facilitating the securitization of assets of the Company or any other Subsidiary. "SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer Plan. "SUBSIDIARY": as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of the Company. "SWING LINE BANKS": initially, Chase and any other Bank that the Administrative Agent, the Company and such Bank may from time to time agree to designate as a Swing Line Bank. "SWING LINE COMMITMENT": initially, the amount set forth on Schedule I opposite the initial Swing Line Bank's name, and, in the event that any additional Swing Line Bank is designated as described in the definition of "Swing Line Banks", the amount agreed upon by the Company, the Administrative Agent and such Swing Line Bank. "SWING LINE LOANS": as defined in subsection 2.25(a). "SYNDICATION AGENT": as defined in the preamble hereto. "TERMINATION DATE": March 28, 2005, as such date may be extended from time to time in accordance with subsection 2.7. "364-DAY AGGREGATE COMMITMENT": the aggregate commitment of the banks party to the 364-Day Credit Agreement to make loans to the Company pursuant to the terms thereof. "364-DAY CREDIT AGREEMENT": the 364-Day Credit Agreement, dated as of March 28, 2000, among the Company, the banks parties thereto, Chase Securities Inc., as sole arranger and book manager, Barclays Bank Plc, Bank of America, N.A., Citibank, N.A. and The Dai-Ichi Kangyo Bank, Limited, as syndication agents and Chase, as administrative agent. "TRANCHE": the collective reference to Loans or portions thereof the Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day). "TRANSFER EFFECTIVE DATE": as defined in subsection 9.6(c). 11 "TRANSFEREE": as defined in subsection 9.6(f). "TYPE": when used in respect of any Loan or Borrowing, means the Rate by reference to which interest on such Loan or on the Loans comprising such Borrowing is determined. For purposes hereof, "Rate" shall include the Eurodollar Rate, the Base Rate and any fixed rate. "UNITED STATES": the United States of America. "UTILIZATION FEE": as defined in subsection 2.6. "WORKING DAY": any Business Day on which dealings in foreign currencies and exchange between banks may be carried on in London, England. 1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto. (b) As used herein and in any certificate or other document made or delivered pursuant hereto, accounting terms relating to the Company and its Subsidiaries not defined in subsection 1.1 and accounting terms partly defined in subsection 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP. (c) The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, subsection, Schedule and Exhibit references are to this Agreement unless otherwise specified. (d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. SECTION 2. AMOUNT AND TERMS OF COMMITMENTS 2.1 COMMITMENTS. (a) Subject to the terms and conditions hereof, each Bank severally agrees to make Revolving Credit Loans to the Company from time to time during the Commitment Period in an aggregate principal amount at any one time outstanding not to exceed the amount of such Bank's Commitment MINUS such Bank's Commitment Percentage of the aggregate principal amount of the Swing Line Loans then outstanding. Notwithstanding anything to the contrary contained in this subsection 2.1, at no time shall the Aggregate Outstanding Extensions of Credit of all Banks exceed the Aggregate Commitment. During the Commitment Period the Company may borrow, pay or prepay and reborrow hereunder, all in accordance with the terms and conditions set forth in this Agreement. (b) The Revolving Credit Loans may from time to time be Eurodollar Revolving Credit Loans and/or Base Rate Loans, as determined by the Company and notified to the Administrative Agent in accordance with subsections 2.2 and 2.10, PROVIDED that no Loan 12 shall be made as a Eurodollar Revolving Credit Loan after the day that is one month prior to the Termination Date. (c) (i) Notwithstanding anything to the contrary contained in this Agreement, the Company may request from time to time that the Aggregate Facilities Commitment be increased by an amount not less than $50,000,000 or a whole multiple of $10,000,000 in excess thereof, provided that (A) the Company may only request such an increase once in any six-month period and in no event shall the Aggregate Facilities Commitment exceed $10,000,000,000 and (B) the Aggregate Commitment and the 364-Day Aggregate Commitment, if the 364-Day Credit Agreement is in effect, shall be increased pro rata as a result of any such request. Such increase in the Aggregate Commitment shall be effected as follows: the Company may (I) request one or more of the Banks to increase the amount of its Commitment (which request shall be in writing and sent to the Administrative Agent to forward to such Bank or Banks) and/or (II) arrange for one or more banks or financial institutions not a party hereto (an "OTHER BANK") to become parties to and lenders under this Agreement, PROVIDED that (w) the Agent shall have approved such Other Bank, which approval shall not be unreasonably withheld, (x) the minimum Commitment of such Other Bank equals or exceeds $15,000,000, (y) after giving effect to such increase, no Bank shall have a Commitment hereunder which exceeds an amount equal to 20% of the Aggregate Commitment and (z) each Bank (including each Increasing Bank and Additional Bank) shall commit to make loans PRO RATA pursuant to this Agreement and the 364-Day Credit Agreement, if such agreement is in effect. In no event may any Bank's Commitment be increased without the prior written consent of such Bank, and the failure of any Bank to respond to the Company's request for an increase shall be deemed a rejection by such Bank of the Company's request. The Aggregate Commitment may not be increased if, at the time of any proposed increase hereunder, a Default or Event of Default has occurred and is continuing, or either of the Company's LT Ratings from Moody's or S&P are less than A3 or A-, respectively. Upon any request by the Company to increase the Aggregate Commitment hereunder, the Company shall be deemed to have represented and warranted on and as of the date of such request that no Default or Event of Default has occurred and is continuing. Notwithstanding anything contained in this Agreement to the contrary, no Bank shall have any obligation whatsoever to increase the amount of its Commitment, and each Bank may at its option, unconditionally and without cause, decline to increase its Commitment. (ii) If any Bank is willing, in its sole and absolute discretion, to increase the amount of its Commitment hereunder (such a Bank hereinafter referred to as an "INCREASING BANK"), it shall enter into a written agreement to that effect with the Company and the Administrative Agent, in form and substance reasonably satisfactory to the Administrative Agent (a "COMMITMENT INCREASE SUPPLEMENT"), which agreement shall specify, among other things, the amount of the increased Commitment of such Increasing Bank. Upon the effectiveness of such Increasing Bank's increase in Commitment, Schedule I hereto shall, without further action, be deemed to have been amended as appropriate to reflect the increased Commitment of such Increasing Bank. Any Other Bank which is willing to become a party hereto and a lender hereunder and that has been approved by the Agent (which approval shall not be unreasonably withheld) shall enter into a written agreement with the Company and the Administrative Agent, in form and substance reasonably satisfactory to the Administrative Agent (an "ADDITIONAL BANK AGREEMENT"), which agreement shall specify, among other things, its Commitment hereunder. 13 When such Other Bank becomes a Bank hereunder as set forth in the Additional Bank Agreement, Schedule I shall, without further action, be deemed to have been amended as appropriate to reflect the Commitment of such Other Bank. Upon the execution by the Administrative Agent, the Company and such Other Bank of such Additional Bank Agreement, such Other Bank shall become and be deemed a party hereto and a "Bank" hereunder for all purposes hereof and shall enjoy all rights and assume all obligations on the part of the Banks set forth in this Agreement, and its Commitment shall be the amount specified in its Additional Bank Agreement. Each Other Bank which executes and delivers an Additional Bank Agreement and becomes a party hereto and a "Bank" hereunder pursuant to such Additional Bank Agreement is hereinafter referred to as an "ADDITIONAL BANK." (iii) In no event shall an increase in a Bank's Commitment or the Commitment of an Other Bank pursuant to this subsection 2.1(c) become effective until the Administrative Agent shall have received a favorable written opinion of counsel for the Company, addressed to the Banks, with respect to the matters set forth in paragraphs 2 and 3 of Exhibit B-1 as they relate to this Agreement and the borrowings hereunder after giving effect to the increase in the Aggregate Commitment resulting from the increase in such Bank's Commitment or the extension of a Commitment by such Other Bank. In no event shall an increase in a Bank's Commitment or the Commitment of an Other Bank which results in the Aggregate Commitment exceeding the amount which is authorized at such time in resolutions previously delivered to the Administrative Agent become effective until the Administrative Agent shall have received a copy of the resolutions, in form and substance satisfactory to the Administrative Agent, of the Board of Directors or the Executive Committee of the Board of Directors of the Company authorizing the borrowings contemplated pursuant to such increase, certified by the Secretary or an Assistant Secretary of the Company. Concurrently with the execution by an Increasing Bank of a Commitment Increase Supplement or by an Additional Bank of an Additional Bank Agreement, the Company shall make such borrowing from such Increasing Bank or Additional Bank, and/or shall make such prepayment of outstanding Revolving Credit Loans, as shall be required to cause the aggregate outstanding principal amount of Revolving Credit Loans owing to each Bank (including each such Increasing Bank and Additional Bank) to be proportional to such Bank's share of the Aggregate Commitment after giving effect to any increase thereof. The Company agrees to indemnify each Bank and to hold each Bank harmless from any loss or expense incurred as a result of any such prepayment in accordance with subsection 2.20, as applicable. (iv) No Other Bank may become an Additional Bank unless the Administrative Agent and the Company consent (which consent of the Administrative Agent shall not be unreasonably withheld) thereto by executing the Additional Bank Agreement signed by such bank or financial institution (or counterparts thereof), but no consent of any of the other Banks hereunder shall be required therefor. In no event shall the Commitment of any Bank be increased by reason of any bank or financial institution becoming an Additional Bank, or otherwise, but the Aggregate Commitment shall be increased by the amount of each Additional Bank's Commitment. Upon any Bank entering into a Commitment Increase Supplement or any Additional Bank becoming a party hereto, the Administrative Agent shall notify each other Bank thereof and shall deliver to each Bank a copy of the Additional Bank Agreement executed by 14 such Additional Bank and the Commitment Increase Supplement executed by such Increasing Bank. (v) Notwithstanding anything to the contrary contained in this Agreement, the Aggregate Commitment shall be increased as a result of an increase in the 364-Day Aggregate Commitment pursuant to subsection 2.1(c)(i) of the 364-Day Credit Agreement. Any such increase in the Aggregate Commitment shall be made in accordance with the requirements of this subsection 2.1(c). 2.2 REVOLVING CREDIT BORROWING PROCEDURE. Subject to the terms and conditions hereof, the Company may request Revolving Credit Loans during the Commitment Period on any Working Day, if all or any part of the requested Revolving Credit Loans are to be initially Eurodollar Loans, or on any Business Day, otherwise, PROVIDED that the Company shall give the Administrative Agent irrevocable notice, substantially in the form of Exhibit F, (which notice must be received by the Administrative Agent prior to 10:00 A.M., New York City time, (a) three Working Days prior to the requested Borrowing Date, if all or any part of the requested Loans are to be initially Eurodollar Revolving Credit Loans or (b) on the Borrowing Date, otherwise), specifying (i) the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether the Borrowing is to be of Eurodollar Revolving Credit Loans, Base Rate Loans or a combination thereof and (iv) if the Borrowing is to be entirely or partly of Eurodollar Revolving Credit Loans, the amount of such Type of Loan and the length of the initial Interest Period therefor. Each Borrowing of Revolving Credit Loans shall be in an amount equal to (x) in the case of Base Rate Loans, $25,000,000 or a whole multiple of $5,000,000 in excess thereof (or, if the then Aggregate Available Commitment is less than $25,000,000, such lesser amount) and (y) in the case of Eurodollar Revolving Credit Loans, $25,000,000 or a whole multiple of $5,000,000 in excess thereof ; PROVIDED, that the Swing Line Banks may request, on behalf of the Company, borrowings under the Aggregate Commitment which are Base Rate Loans in other amounts pursuant to subsection 2.25(c). Upon receipt of any such notice from the Company, the Administrative Agent shall promptly notify the Lending Installation of each Bank thereof. Each Bank will make the amount of its pro rata share of each Borrowing of Revolving Credit Loans available to the Administrative Agent at the office of the Administrative Agent specified in subsection 9.2 prior to 11:00 A.M., New York City time, on the Borrowing Date requested by the Company in funds immediately available to the Administrative Agent. The Administrative Agent shall make the funds so received from the Banks immediately available to the Company at the Administrative Agent's aforesaid address or to an account designated by the Company. 2.3 COMPETITIVE BID BORROWING PROCEDURE. (a) To request Competitive Bids, the Company shall deliver to the Administrative Agent a Competitive Bid Request, substantially in the form of Exhibit G, to be received by the Administrative Agent (i) in the case of a Eurodollar Competitive Bid Borrowing, not later than 10:00 a.m, New York City time, four Working Days before a proposed Competitive Bid Borrowing and (ii) in the case of a Fixed Rate Borrowing, not later than 10:00 a.m, New York City time, one Business Day before a proposed Competitive Bid Borrowing. No Base Rate Loan shall be requested in, or made pursuant to, a Competitive Bid Request. A Competitive Bid Request that does not conform substantially to the format of Exhibit G may be rejected in the Administrative Agent's sole discretion, and the Administrative Agent shall promptly notify the Company of such rejection by telecopier. Such request shall in 15 each case refer to this Agreement and specify (x) whether the Borrowing then being requested is to be a Eurodollar Borrowing or a Fixed Rate Borrowing, (y) the date of such Borrowing (which shall be a Business Day and, in the case of a Eurodollar Competitive Bid Loan, a Working Day) and the aggregate principal amount thereof, which shall be a minimum principal amount of $25,000,000 and in an integral multiple of $5,000,000 (or an aggregate principal amount equal to the remaining balance of the available Commitments) and which will not cause the Aggregate Outstanding Extensions of Credit of all Banks to exceed the Aggregate Commitment, and (z) the Interest Period with respect thereto (which may not end after the Termination Date). The Competitive Bid Maturity Date for each Competitive Bid Loan shall be the date set forth therefor in the relevant Competitive Bid Request, which date shall be not less than fifteen days after the date of the Competitive Bid Borrowing and, in any event, shall not be later than the Termination Date. Promptly after its receipt of a Competitive Bid Request that is not rejected as aforesaid, the Administrative Agent shall invite by telecopier (in the form set forth in Exhibit H) the Banks to bid, on the terms and conditions of this Agreement, to make Competitive Bid Loans pursuant to the Competitive Bid Request. (b) Each Bank may, in its sole discretion, make one or more Competitive Bids to the Company responsive to a Competitive Bid Request. Each Competitive Bid by a Bank must be received by the Administrative Agent via telecopier, in the form of Exhibit I, (i) in the case of a Eurodollar Competitive Bid Borrowing, not later than 9:30 a.m., New York City time, three Working Days before a proposed Competitive Bid Borrowing and (ii) in the case of a Fixed Rate Borrowing, not later than 9:30 a.m., New York City time, on the Business Day of a proposed Competitive Bid Borrowing. Multiple bids will be accepted by the Administrative Agent. Competitive Bids that do not conform substantially to the format of Exhibit I may be rejected by the Administrative Agent after conferring with, and upon the instruction of, the Company, and the Administrative Agent shall notify the Bank making such nonconforming bid of such rejection as soon as practicable. Each Competitive Bid shall refer to this Agreement and specify (x) the principal amount (which shall be in a minimum principal amount of $5,000,000 and in integral multiples of $1,000,000, which may exceed such Bank's Commitment and which may equal the entire principal amount of the Competitive Bid Borrowing requested by the Company) of the Competitive Bid Loan or Loans that the applicable Bank is willing to make to the Company, (y) the Competitive Bid Rate or Rates at which such Bank is prepared to make the Competitive Bid Loan or Loans and (z) the Interest Period and the last day thereof. A Competitive Bid submitted by a Bank pursuant to this paragraph (b) shall be irrevocable. (c) The Administrative Agent shall promptly notify the Company by telecopier of all the Competitive Bids made, the Competitive Bid Rate and the principal amount of each Competitive Bid Loan in respect of which a Competitive Bid was made and the identity of the Bank that made each bid. The Administrative Agent shall send a copy of all Competitive Bids (or a summary of such bids) to the Company for its records as soon as practicable after completion of the bidding process set forth in this subsection 2.3. (d) The Company may in its sole and absolute discretion, subject only to the provisions of this paragraph (d), accept or reject any Competitive Bid referred to in paragraph (c) above. The Company shall notify the Administrative Agent by telephone, confirmed by telecopier in the form of a Competitive Bid Accept/Reject Letter, whether and to what extent it 16 has decided to accept or reject any or all of the bids referred to in paragraph (c) above, (x) in the case of a Eurodollar Competitive Bid Borrowing, not later than 10:30 a.m., New York City time, three Business Days before a proposed Competitive Bid Borrowing and (y) in the case of a Fixed Rate Borrowing, not later than 10:30 a.m., New York City time, on the day of a proposed Competitive Bid Borrowing; PROVIDED, HOWEVER, that (i) the failure by the Company to give such notice shall be deemed to be a rejection of all the bids referred to in paragraph (c) above, (ii) the Company shall not accept a bid made at a particular Competitive Bid Rate if the Company has decided to reject a bid made at a lower Competitive Bid Rate, (iii) the aggregate amount of the Competitive Bids accepted by the Company shall not exceed the principal amount specified in the Competitive Bid Request, (iv) if the Company shall accept a bid or bids made at a particular Competitive Bid Rate and such bid or bids would cause the total amount of accepted bids to exceed the amount specified in the Competitive Bid Request, then the aggregate amount of the bids made at such Competitive Bid Rates shall be reduced ratably as necessary to eliminate such excess, and (v) except pursuant to clause (iv) above, no bid shall be accepted for a Competitive Bid Loan unless such Competitive Bid Loan is in a minimum principal amount of $5,000,000 and an integral multiple of $1,000,000; PROVIDED FURTHER, HOWEVER, that if a Competitive Bid Loan must be in an amount less than $5,000,000 because of the provisions of clause (iv) above, such Competitive Bid Loan may be for a minimum of $1,000,000 or any integral multiple thereof, and in calculating the pro rata allocation of acceptances of portions of multiple bids at a particular Competitive Bid Rate pursuant to clause (iv) the amount shall be rounded to integral multiples of $1,000,000 in a manner which shall be in the discretion of the Company. A notice given by the Company pursuant to this paragraph (d) shall be irrevocable. (e) The Administrative Agent shall promptly notify each bidding Bank whether or not its Competitive Bid has been accepted (and if so, in what amount and at what Competitive Bid Rate) by telecopy sent by the Administrative Agent, and each successful bidder will thereupon become bound, subject to the other applicable conditions hereof, to make the Competitive Bid Loan in respect of which its bid has been accepted. (f) A Competitive Bid Request shall not be made within two Business Days after the date of any previous Competitive Bid Request. (g) If the Administrative Agent shall elect to submit a Competitive Bid in its capacity as a Bank, it shall submit such bid directly to the Company one quarter of an hour earlier than the latest time at which the other Banks are required to submit their bids to the Administrative Agent pursuant to paragraph (b) above. (h) All notices required by this subsection 2.3 shall be given in accordance with subsection 9.2. 2.4 REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Company unconditionally promises to pay to the Administrative Agent for the account of the relevant Bank (i) on the Termination Date (or such earlier date as the Loans become due and payable pursuant to subsection 2.9 or Section 7), the unpaid principal amount of each Revolving Credit Loan and Swing Line Loan made to it by such Bank or Swing Line Bank, respectively, and (ii) on the last day of the Interest Period thereof, the unpaid principal amount of each Competitive Bid Loan 17 made to it by such Bank. The Company shall have no right to prepay any principal of any Competitive Bid Loan. The Company further agrees to pay interest in immediately available funds at the office of the Administrative Agent on the unpaid principal amount of the Loans from time to time from the date hereof until payment in full thereof at the rates per annum, and on the dates, set forth in subsection 2.13. (b) Each Bank shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Company to such Bank resulting from the Loans made by such Bank to the Company, including the amounts of principal and interest payable and paid to such Bank from time to time hereunder. (c) The Administrative Agent shall maintain the Register pursuant to subsection 9.6(d), and a subaccount for each Bank, in which Register and subaccounts (taken together) shall be recorded (i) the amount of each Loan made hereunder, whether such Loan is a Revolving Credit Loan, Swing Line Loan or a Competitive Bid Loan, the Type of each Loan made and the Interest Period or maturity date (if any) applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Company to each Bank hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder from the Company and each Bank's share thereof. (d) The entries made in the Register and the accounts maintained pursuant to paragraphs (b) and (c) of this subsection shall be prima facie evidence of the items contained therein; PROVIDED, HOWEVER, that the failure of any Bank or the Administrative Agent to maintain such account, such Register or such subaccount, as applicable, or any error therein, shall not in any manner affect the obligation of the Company to repay (with applicable interest) the Loan made to the Company by such Bank in accordance with the terms of this Agreement. (e) If requested by any Bank for purposes of subsection 9.6(g), the Company shall execute and deliver, at the Company's expense, to such Bank (and deliver a copy thereof to the Administrative Agent) one or more promissory notes evidencing the Loans owing to such Bank pursuant to this Agreement. Any such note shall be substantially in the form of Exhibit A-1, A-2 or A-3, as applicable, and shall be entitled to all of the rights and benefits of this Agreement. 2.5 FACILITY FEE; ADMINISTRATIVE AGENT'S FEE. (a) The Company agrees to pay to the Administrative Agent for the account of each Bank a non-refundable facility fee at the Applicable Facility Fee Rate per annum on the daily average amount of such Bank's Commitment (whether borrowed or unborrowed) from and including the date hereof to and excluding the Termination Date, payable quarterly in arrears on each Fee Payment Date. (b) The Company will pay to the Administrative Agent, for its own account, an agent's fee equal to the amount agreed upon in writing between the Company and the Administrative Agent, payable to the Administrative Agent in such manner as the Company and the Administrative Agent may agree. Each Bank acknowledges that the Administrative Agent is being paid certain other fees for its own account in connection with the financing pursuant to this Agreement in addition to the fees described in this Agreement. 18 2.6 UTILIZATION FEE. If the average daily aggregate principal amount of the Loans outstanding for the calendar quarter preceding a Fee Payment Date (or such shorter period beginning with the date hereof or ending with the Termination Date) is in excess of 50% of the average daily Aggregate Commitment for such calendar quarter or period, the Company agrees to pay to the Administrative Agent for the account of the Banks a non-refundable utilization fee (the "UTILIZATION FEE") at the Applicable Utilization Fee Rate on such average daily aggregate principal amount of the Loans during such calendar quarter (or shorter period), payable in arrears on each Fee Payment Date. 2.7 EXTENSION OF TERMINATION DATE. (a) The Company may, by written notice to the Administrative Agent (such notice being an "EXTENSION NOTICE"), request the Banks to consider an extension of the then applicable Termination Date to a date one year after the then applicable Termination Date. The Administrative Agent shall promptly transmit any Extension Notice to each Bank. Each Bank shall notify the Administrative Agent whether it wishes to extend the then applicable Termination Date no later than thirty days after a Bank's receipt of the Extension Notice from the Administrative Agent, and any such notice given by a Bank to the Administrative Agent, once given, shall be irrevocable as to such Bank. Any Bank which does not expressly notify the Administrative Agent within such 30 day period that it wishes to so extend the then applicable Termination Date shall be deemed to have rejected the Company's request for extension of such Termination Date. Banks consenting to extend the then applicable Termination Date are hereinafter referred to as "CONTINUING BANKS", and Banks declining to consent to extend such Termination Date (or Banks deemed to have so declined) are hereinafter referred to as "NON-EXTENDING BANKS". If the Required Banks have elected (in their sole and absolute discretion) to so extend the Termination Date, the Administrative Agent shall notify the Company of such election by such Required Banks no later than forty days after the Administrative Agent's receipt of the Extension Notice from the Company, and effective on the date of such notice by the Administrative Agent to the Company, the Termination Date shall be automatically and immediately so extended. No extension will be permitted hereunder without the consent of the Required Banks and in no event shall the Termination Date be extended beyond March 28, 2006. Upon the delivery of an Extension Notice and upon the extension of the Termination Date pursuant to this subsection 2.7, the Company shall be deemed to have represented and warranted on and as of the date of such Extension Notice and the effective date of such extension, as the case may be, that no Default or Event of Default has occurred and is continuing. Notwithstanding anything contained in this Agreement to the contrary, no Bank shall have any obligation to extend the Termination Date, and each Bank may at its option, unconditionally and without cause, decline to extend the Termination Date. (b) If the Termination Date shall have been extended in accordance with subsection 2.7(a), all references herein to the "Termination Date" shall refer to the Termination Date as so extended. (c) If any Bank shall determine not to extend the Termination Date as requested by any Extension Notice given by the Company pursuant to subsection 2.7(a), the Commitment of such Bank shall terminate on the Termination Date without giving any effect to such proposed extension, and the Company shall on such date pay to the Administrative Agent, for the account of such Bank, the principal amount of, and accrued interest on, such Bank's 19 Loans, together with any amounts payable to such Bank pursuant to subsection 2.20 and any fees or other amounts owing to such Bank under this Agreement; PROVIDED that if the Company has replaced such Non-Extending Bank pursuant to subsection 2.7(d) below then the provisions of such subsection shall apply. The Aggregate Commitment shall be reduced by the amount of the Commitment of such Non-Extending Bank to the extent the Commitment of such Non-Extending Bank has NOT been transferred to one or more Continuing Banks pursuant to subsection 2.7(d) below. (d) A Non-Extending Bank shall be obligated, at the request of the Company and subject to payment by the Company to the Administrative Agent for the account of such Non-Extending Bank the principal amount of, and accrued interest on, such Bank's Loans, together with any amounts payable to such Bank pursuant to subsection 2.20 and any fees or other amounts owing to such Bank under this Agreement, to transfer without recourse, representation, warranty (other than good title to its Loans) or expense to such Non-Extending Bank, at any time prior to the Termination Date applicable to such Non-Extending Bank, all of its rights and obligations hereunder to another financial institution or group of financial institutions nominated by the Company and willing to participate in the facility in the place of such Non-Extending Bank; PROVIDED that, if such transferee is not a Bank, such transferee(s) satisfies all the requirements of this Agreement and the Administrative Agent shall have consented to such transfer, which consent shall not be unreasonably withheld. Each such transferee shall become a Continuing Bank hereunder in replacement of the Non-Extending Bank and shall enjoy all rights and assume all obligations on the part of the Banks set forth in this Agreement. Simultaneously with such transfer, each such transferee shall execute and deliver to the Administrative Agent a written agreement assuming all obligations of the Non-Extending Bank it is replacing set forth in this Agreement, which agreement shall be reasonably satisfactory in form and substance to the Administrative Agent. (e) If the Termination Date shall have been extended in respect of Continuing Banks in accordance with subsection 2.7(a), any notice of borrowing pursuant to subsection 2.2 or 2.3 specifying a Borrowing Date occurring after the Termination Date applicable to a Non-Extending Bank or requesting an Interest Period extending beyond such date shall (a) have no effect in respect of such Non-Extending Bank and (b) not specify a requested aggregate principal amount exceeding the Aggregate Available Commitment (calculated on the basis of the Commitments of the Continuing Banks). 2.8 TERMINATION OR REDUCTION OF COMMITMENTS. The Company shall have the right, upon not less than three Business Days' notice to the Administrative Agent, to terminate the Aggregate Commitment or, from time to time, to reduce the amount of the Aggregate Commitment, PROVIDED that no such termination or reduction shall be permitted if, after giving effect thereto and to any prepayments made in respect of the Loans on the effective date of such termination or reduction, (i) the Aggregate Outstanding Extensions of Credit would exceed the Aggregate Commitment then in effect and (ii) the proportion of the Aggregate Commitment in relation to the 364-Day Aggregate Commitment, if the 364-Day Credit Agreement is in effect, shall differ from such proportion on the Closing Date. Any such reduction shall be in an amount equal to $10,000,000 or a whole multiple of $1,000,000 in excess thereof and shall reduce permanently the Commitments then in effect. 20 2.9 OPTIONAL PREPAYMENTS OF REVOLVING CREDIT LOANS. The Company may at any time and from time to time prepay the Revolving Credit Loans and the Swing Line Loans, in whole or in part, without premium or penalty, upon at least two Business Days' irrevocable notice to the Administrative Agent, specifying the date and amount of prepayment and whether the prepayment is of Base Rate Loans, Eurodollar Revolving Credit Loans or a combination thereof, and, if of a combination thereof, the amount allocable to each. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with accrued interest to such date on the amount prepaid. Partial prepayments, except in the case of Swing Line Loans, shall be in an aggregate principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Partial prepayments of Swing Line Loans shall be in an aggregate principal amount of $100,000 or a whole multiple thereof. Swing Line Loans may be prepaid without notice. Prepayments made in respect of any Eurodollar Loans on any day other than the last day of the applicable Interest Period shall be accompanied by amounts, if any, payable pursuant to subsection 2.20(d). The Company shall not have the right to prepay any Competitive Bid Borrowing. 2.10 CONVERSION AND CONTINUATION OPTIONS. (a) The Company may elect from time to time to convert Eurodollar Revolving Credit Loans to Base Rate Loans by giving the Administrative Agent at least one Business Day's prior irrevocable notice of such election, PROVIDED that any such conversion of Eurodollar Revolving Credit Loans may only be made on the last day of an Interest Period with respect thereto. The Company may elect from time to time to convert Base Rate Loans to Eurodollar Revolving Credit Loans by giving the Administrative Agent at least three Working Days' prior irrevocable notice of such election. Any such notice of conversion to Eurodollar Revolving Credit Loans shall specify the length of the initial Interest Period or Interest Periods therefor. Upon receipt of such notice the Administrative Agent shall promptly notify each Bank thereof. All or any part of outstanding Eurodollar Revolving Credit Loans and Base Rate Loans may be converted as provided herein, PROVIDED that (i) no Loan may be converted into a Eurodollar Revolving Credit Loan when any Event of Default has occurred and is continuing unless the Administrative Agent or the Required Banks have determined that such a conversion is appropriate, (ii) any such conversion may only be made if, after giving effect thereto, subsection 2.12 shall not have been contravened and (iii) no Revolving Credit Loan may be converted into a Eurodollar Revolving Credit Loan after the date that is one month prior to the Termination Date. (b) Any Eurodollar Revolving Credit Loans may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Company giving notice to the Administrative Agent, in accordance with the applicable provisions of the term "Interest Period" set forth in subsection 1.1, of the length of the next Interest Period to be applicable to such Loans, PROVIDED that no Eurodollar Revolving Credit Loan may be continued as such (i) when any Event of Default has occurred and is continuing and the Administrative Agent or the Required Banks have determined that such a continuation is not appropriate, (ii) if, after giving effect thereto, subsection 2.12 would be contravened or (iii) after the date that is one month prior to the Termination Date. If the Company shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant to the preceding proviso such Loans shall be automatically converted to Base Rate Loans on the last day of such then expiring Interest Period. 21 2.11 APPLICABLE INTEREST RATE MARGINS, FACILITY FEE RATE AND UTILIZATION FEE. The Applicable Eurodollar Margin, the Applicable Facility Fee Rate and the Applicable Utilization Fee Rate (the Applicable Eurodollar Margin, the Applicable Facility Fee Rate and the Applicable Utilization Fee Rate, individually or collectively, the "APPLICABLE MARGIN" or "APPLICABLE RATE") shall be equal to the percentage per annum set forth in the appropriate column in the table below, relating to the Company's LT Rating by S&P and Moody's. For purposes of determining the Applicable Margin or the Applicable Rate, (i) if any of the Company's LT Ratings appears in more than one column of the table, the Applicable Margin and the Applicable Rates will be based on the column which includes the lower rating, (ii) if Moody's or S&P shall not have in effect a LT Rating (other than because such rating agency shall no longer be in the business of rating corporate debt obligations), then such rating agency will be deemed to have established a LT Rating one level lower than the LT Rating of either Moody's or S&P, as the case may be, that remains in effect, (iii) the Applicable Margin and the Applicable Rates shall be subject to adjustment (upwards or downwards, as appropriate), effective as of the date on which S&P or Moody's announces a rating change which results in a change in the Applicable Margin and the Applicable Rates, and (iv) if the rating system of either S&P or Moody's shall change, or if either S&P or Moody's shall cease to be in the business of rating corporate debt obligations, amendments shall be negotiated in good faith (and shall be effective only upon approval by the Company and the Required Banks) to the references to specific ratings in the table below to reflect such changed rating system or the unavailability of ratings from such rating agency.
LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5 ------- ------- ------- ------- ------- S&P-LT Rating: AA- or A A- BBB+ BBB or better below Moody's-LT Rating: Aa3 or A2 A3 Baa1 Baa2 or better below Applicable Eurodollar .17% .21% .25% .325% .45% Margin Applicable Facility .08% .09% .10% .125% .175% Fee Rate Applicable Utilization .05% .05% .05% .125% .125% Fee Rate
As provided in subsection 2.13(b), an applicable margin shall not be added to Base Rate Loans. 2.12 MINIMUM AMOUNTS OF TRANCHES. All borrowings, conversions and continuations of Loans hereunder and all selections of Interest Periods hereunder shall be in such amounts and be made pursuant to such elections so that, after giving effect thereto, the aggregate principal amount of the Loans comprising each Tranche shall be equal to $25,000,000 or a whole multiple of $5,000,000 in excess thereof. 22 2.13 INTEREST RATES AND PAYMENT DATES. (a) The Loans comprising each Eurodollar Borrowing shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to (i) in the case of each Eurodollar Revolving Credit Loan, the Eurodollar Rate for the Interest Period in effect for such Borrowing plus the Applicable Margin and (ii) in the case of each Eurodollar Competitive Bid Loan, the Eurodollar Rate for the Interest Period in effect for such Borrowing plus the Margin offered by the Bank making such Loan and accepted by the Company pursuant to subsection 2.3. (b) Each Base Rate Loan shall bear interest for each day during which such Base Rate Loan is outstanding at a rate per annum equal to the Base Rate. (c) Each Fixed Rate Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the fixed rate of interest offered by the Bank making such Loan and accepted by the Company pursuant to subsection 2.3. (d) If all or a portion of (i) the principal amount of any Loan or (ii) any interest payable thereon, any fee or any other amount payable pursuant to the terms of this Agreement (other than attorneys' fees incurred in connection with the enforcement of the terms hereof) shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum which is (x) in the case of overdue principal, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this subsection plus 2% or (y) in the case of any overdue interest, fee or other amount, the rate described in paragraph (b) of this subsection plus 2%, in each case from the date of such non-payment until such amount is paid in full (after as well as before judgment). (e) Interest on each Loan shall be payable in arrears on each Interest Payment Date applicable to such Loan, the Termination Date and upon any prepayment of such Loan, PROVIDED that interest accruing pursuant to paragraph (d) of this subsection shall be payable on demand. 2.14 COMPUTATION OF INTEREST AND FEES. (a) Interest on Base Rate Loans and Swing Line Loans shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed. Interest on Eurodollar Loans, Fixed Rate Loans and all fees shall be calculated on the basis of a 360-day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Company and the Banks of each determination of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a change in the Base Rate shall become effective as of the opening of business on the day on which such change in the Base Rate is announced. The Administrative Agent shall as soon as practicable notify the Company and the Banks of the effective date and the amount of each such change in interest rate. Notwithstanding anything to the contrary in this Agreement, interest paid or becoming due hereunder shall in no event exceed the maximum rate permitted by applicable law. (b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Company and the Banks in the absence of manifest error. The Administrative Agent shall, at the request of 23 the Company, deliver to the Company a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to subsection 2.13. (c) If any Reference Bank's Commitment shall terminate or all its Loans shall be assigned for any reason whatsoever, such Reference Bank shall thereupon cease to be a Reference Bank, and if, as a result of the foregoing, there shall only be one Reference Bank remaining, the Administrative Agent (after consultation with the Company and the Banks) shall, by notice to the Company and the Banks, designate another Bank acceptable to the Company, as a Reference Bank so that there shall at all times be at least two Reference Banks. (d) Each Reference Bank shall use its best efforts to furnish quotations of rates to the Administrative Agent as contemplated hereby. If any of the Reference Banks shall be unable or shall otherwise fail to supply such rates to the Administrative Agent upon its request, the rate of interest shall, subject to the provisions of subsection 2.15, be determined on the basis of the quotations of the remaining Reference Banks or Reference Bank. 2.15 INABILITY TO DETERMINE INTEREST RATE. In the event that prior to the first day of any Interest Period the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Company) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, the Administrative Agent shall give telex, telecopy or telephonic notice thereof to the Company and the Banks as soon as practicable thereafter. If such notice is given (x) any Eurodollar Loans (including any Eurodollar Competitive Bid Loan) requested to be made on the first day of such Interest Period shall be made as Base Rate Loans, (y) any Loans that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as Base Rate Loans and (z) any outstanding Eurodollar Loans shall be converted on the first day of such Interest Period to Base Rate Loans. Until such notice has been withdrawn by the Administrative Agent, no further Eurodollar Loans shall be made or continued as such, nor shall the Company have the right to convert Loans to Eurodollar Loans. 2.16 PRO RATA TREATMENT AND PAYMENTS. (a) Each Revolving Credit Borrowing by the Company from the Banks hereunder, each payment by the Company on account of any fee hereunder and, except as contemplated by subsections 2.1(c)(iii), 2.7(c), 2.21, 2.23 and 2.24 any reduction of the Commitments of the Banks shall be made pro rata according to the respective Commitment Percentages of the Banks. Except as contemplated by subsections 2.1(c)(iii), 2.7(c), 2.21, 2.23 and 2.24, each payment (including each prepayment) by the Company on account of principal of and interest on the Revolving Credit Loans shall be made pro rata according to the respective outstanding principal amounts of the Revolving Credit Loans then held by the Banks. Each payment of principal of any Competitive Bid Borrowing shall be allocated pro rata among the Banks participating in such Borrowing in accordance with the respective principal amounts of their outstanding Competitive Bid Loans comprising such Borrowing. Each payment of interest on any Competitive Bid Borrowing shall be allocated pro rata among the Banks participating in such Borrowing in accordance with the respective amounts of accrued and unpaid interest on their outstanding Competitive Bid Loans comprising such Borrowing. Each Bank agrees that in computing such Bank's portion of any Borrowing to be made hereunder, the Administrative Agent may, in its discretion, round each Bank's percentage 24 of such Borrowing to the next higher or lower whole dollar amount. All payments (including prepayments) to be made by the Company hereunder, whether on account of principal, interest, fees or otherwise, shall be made without set off or counterclaim and shall be made prior to 12:00 Noon, New York City time, on the due date thereof to the Administrative Agent, for the account of the Banks, at the Administrative Agent's office specified in subsection 9.2, in Dollars and in immediately available funds. The Administrative Agent shall distribute such payments to the Lending Installation of the Banks promptly upon receipt in like funds as received. If any payment hereunder (other than payments on the Eurodollar Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension. If any payment on a Eurodollar Loan becomes due and payable on a day other than a Working Day, the maturity thereof shall be extended to the next succeeding Working Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Working Day. (b) Unless the Administrative Agent shall have been notified in writing by any Bank prior to a Borrowing Date that such Bank will not make the amount that would constitute its Commitment Percentage of the Borrowing on such date available to the Administrative Agent, the Administrative Agent may assume that such Bank has made such amount available to the Administrative Agent on such Borrowing Date, and the Administrative Agent may, in reliance upon such assumption, make available to the Company a corresponding amount. If such amount is made available to the Administrative Agent on a date after such Borrowing Date, such Bank shall pay to the Administrative Agent on demand an amount equal to the product of (i) the daily average Federal funds rate during such period as quoted by the Administrative Agent, times (ii) the amount of such Bank's Commitment Percentage of such Borrowing, times (iii) a fraction the numerator of which is the number of days that elapse from and including such Borrowing Date to the date on which such Bank's Commitment Percentage of such Borrowing shall have become immediately available to the Administrative Agent and the denominator of which is 360. A certificate of the Administrative Agent submitted to any Bank with respect to any amounts owing under this subsection shall be conclusive in the absence of manifest error. If such Bank's Commitment Percentage of such Borrowing is not in fact made available to the Administrative Agent by such Bank within three Business Days of such Borrowing Date, the Administrative Agent shall notify the Company of such Bank's failure to fund, and shall be entitled to recover such amount with interest thereon at the rate per annum applicable to Base Rate Loans hereunder, on demand, from the Company. 2.17 ILLEGALITY. Notwithstanding any other provision herein, if any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for any Bank to make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such Bank hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled, (b) the Loans of such Bank then outstanding as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law and (c) such Bank shall promptly 25 notify the Administrative Agent of any such cancellation and conversion pursuant to this subsection 2.17. 2.18 REQUIREMENTS OF LAW. (a) In the event that after the date hereof any change in any Requirement of Law or in the interpretation or application thereof by any Governmental Authority charged with the administration or interpretation thereof or compliance by any Bank or the Lending Installation of any Bank with any request or directive (whether or not having the force of law) from any such Governmental Authority made subsequent to the date hereof: (i) shall subject any Bank or the Lending Installation of any Bank to any tax of any kind whatsoever with respect to this Agreement or any Eurodollar Loan or Fixed Rate Loan made by it, or change the basis of taxation of payments to such Bank or the Lending Installation of such Bank in respect thereof (except for taxes covered by subsection 2.19 and changes in the rate of tax on the net income of such Bank or the Lending Installation of such Bank); (ii) (shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Bank or the Lending Installation of such Bank which is not otherwise included in the determination of interest on the Eurodollar Rate Loans or Fixed Rate Loans hereunder; or (iii) (shall impose on such Bank or the Lending Installation of such Bank any other condition; and the result of any of the foregoing is to increase the cost to such Bank or the Lending Installation of such Bank, by an amount which such Bank deems to be material, of making, converting into, continuing or maintaining any Eurodollar Loan or Fixed Rate Loan or to reduce any amount receivable hereunder in respect thereof then, in any such case, the Company shall pay such Bank, within 30 days after its demand, any additional amounts necessary to compensate such Bank for such increased cost or reduced amount receivable. If any Bank becomes entitled to claim any additional amounts pursuant to this subsection, it shall promptly notify the Company, through the Administrative Agent, of the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this subsection submitted by such Bank, through the Administrative Agent, to the Company shall set forth, in reasonable detail, the basis for such claim and the method of computation thereof and be conclusive in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of all other amounts payable hereunder. Notwithstanding the foregoing, no Bank shall be entitled to request compensation under this Section with respect to any Competitive Bid Loan if it shall have been aware of the change giving rise to such request at the time of submission of such Bank's Competitive Bid pursuant to which such Competitive Loan shall have been made. (b) In the event that any Bank shall have determined that any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Bank or the Lending Installation of such Bank or any corporation controlling 26 such Bank with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority, in each case, made subsequent to the date hereof, does or shall have the effect of reducing the rate of return on such Bank's, such Lending Installation's or such corporation's capital as a consequence of its obligations hereunder to a level below that which such Bank, such Lending Installation or such corporation could have achieved but for such change or compliance (taking into consideration such Bank's, such Lending Installation's or such corporation's policies with respect to capital adequacy) by an amount deemed by such Bank to be material, then from time to time, after submission by such Bank to the Company of a written request therefor, the Company shall pay to such Bank within 90 days after demand such additional amount or amounts as will compensate such Bank for such reduction. Each such request shall be accompanied by such information in respect of the basis for the claim made thereby and the method of computation thereof as such Bank shall at the time customarily provide to other borrowers deemed by it to be similarly situated. This covenant shall survive the termination of this Agreement and the payment of all other amounts payable hereunder. (c) Each Bank, through the Administrative Agent, will promptly notify the Company of any event of which it has knowledge, occurring after the date hereof, which will entitle such Bank to compensation pursuant to this subsection. Notwithstanding the foregoing, no Bank shall be entitled to any compensation described in this Section unless, at the time it requests such compensation, it is the policy or general practice of such Bank to request compensation for comparable costs in similar circumstances under comparable provisions of other credit agreements for comparable customers (as determined by such Bank) unless specific facts or circumstances applicable to the Company or the transactions contemplated by this Agreement would alter such policy or general practice. If any Bank fails to give the notice described in subsection 2.18(c) within 90 days after it obtains such actual knowledge of the event required to be described in such notice, such Bank shall, with respect to any compensation that would otherwise be owing to such Bank under this subsection 2.18, only be entitled to payment for increased costs incurred from and after the date that such Bank does give such notice. If the Company shall reimburse any Bank pursuant to this Section for any cost and such Bank shall subsequently receive a refund in respect thereof, such Bank shall so notify the Company and, upon its request, will pay to the Company the portion of such refund that such Bank shall determine in good faith to be allocable to the costs so reimbursed. 2.19 TAXES. (a) All payments made by the Company under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding, in the case of the Administrative Agent and each Bank, taxes based on or measured by net income imposed on the Administrative Agent or such Bank, as the case may be, as a result of a present or former connection between the jurisdiction of the government or taxing authority imposing such tax and the Administrative Agent or such Bank (excluding a connection arising solely from the Administrative Agent or such Bank having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement) or any political subdivision or taxing authority thereof or therein (all such non-excluded taxes, levies, imposts, duties, charges, fees, deductions and withholdings being 27 hereinafter called "TAXES"). If any Taxes are required to be withheld from any amounts payable to the Administrative Agent or any Bank hereunder, the amounts so payable to the Administrative Agent or such Bank shall be increased to the extent necessary to yield to the Administrative 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; PROVIDED, HOWEVER, that the Company shall not be required to increase any amounts payable to any Non-U.S. Lender (as defined in subsection 2.19(b)) with respect to any Taxes that would not have been imposed but for such Non-U.S. Lender's failure to provide to the Company the Internal Revenue Service Forms required to be provided to the Company pursuant to subsection 2.19(b). Whenever any Taxes are payable by the Company, promptly thereafter the Company shall send to the Administrative 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 Company showing payment thereof. If such evidence of payment is unavailable, other evidence of such payment, satisfactory to the Administrative Agent, shall be provided by the Company. If the Company fails to pay any Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, the Company shall indemnify the Administrative Agent and the Banks for any incremental taxes, interest or penalties that may become payable by the Administrative Agent or any Bank as a result of any such failure. (b) Each Bank represents and warrants to the Company that under currently applicable law and treaties no Taxes will be required to be withheld by the Company with respect to any payments to be made to such Bank hereunder. Each Bank that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes (each, a "NON-U.S. LENDER") agrees to deliver to the Company and the Administrative Agent on or prior to the Closing Date or, in the case of a Non-U.S. Lender that is an assignee or transferee of, or purchaser of a participation in, an interest under this Agreement pursuant to subsection 9.6 (unless such Non-U.S. Lender was already a Bank hereunder immediately prior to such assignment or transfer), on the date of such assignment or transfer to such Non-U.S. Lender, (i) two (2) accurate and complete original signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN (or successor forms) certifying that such Non-U.S. Lender is entitled as of such date to a complete exemption from United States withholding tax with respect to payments to be made under this Agreement, or (ii) if such Non-U.S. Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under an income tax treaty) (or any successor forms) pursuant to clause (i) above, (x) a certificate substantially in the form of Exhibit K (any such certificate, an "EXEMPTION CERTIFICATE"), and (y) two (2) accurate and complete original signed copies of Internal Revenue Service Form W-8BEN (with respect to the portfolio interest exemption) (or successor form) certifying that such Non-U.S. Lender is entitled as of such date to a complete exemption from United States withholding tax with respect to payments of interest to be made under this Agreement. In addition, each Non-U.S. Lender agrees that from time to time after the Closing Date, when the passage of time or a change in facts or circumstances renders the previous certification obsolete or inaccurate in any material respect, such Non-U.S. Lender will deliver to the Company and the Administrative Agent two (2) new accurate and complete original signed copies of Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect 28 to a complete exemption under an income tax treaty), or Form W-8BEN (with respect to the portfolio interest exemption) and an Exemption Certificate, as the case may be, and such other forms as may be required in order to confirm or establish that such Non-U.S. Lender is entitled to a continued exemption from United States withholding tax with respect to payments under this Agreement, or such Non-U.S. Lender shall immediately notify the Company and the Administrative Agent of its inability to deliver any such form or Exemption Certificate, in which case such Non-U.S. Lender shall not be required to deliver any such form or Exemption Certificate. Notwithstanding anything to the contrary contained in this subsection 2.19, the Company agrees to pay any additional amounts and to indemnify each Non-U.S. Lender in the manner set forth in subsection 2.19(a) in respect of any United States Taxes deducted or withheld by them if such Taxes would not have been deducted or withheld but for any change after the Closing Date in any applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof. (c) If any Bank (or Transferee) or the Administrative Agent shall become aware that it is entitled to receive a refund or credit (such credit to include any increase in any foreign tax credit) as a result of Taxes (including any penalties or interest with respect thereto) as to which it has been indemnified by the Company pursuant to this subsection 2.19, it shall promptly notify the Company of the availability of such refund or credit and shall, within 30 days after receipt of a request by the Company, apply for such refund or credit at the Company's expense, and in the case of any application for such refund or credit by the Company, shall, if legally able to do so, deliver to the Company such certificates, forms or other documentation as may be reasonably necessary to assist the Company in such application. If any Bank (or Transferee) or the Administrative Agent receives a refund or credit (such credit to include any increase in any foreign tax credit) in respect to any Taxes as to which it has been indemnified by the Company pursuant to this subsection 2.19, it shall promptly notify the Company of such refund or credit and shall, within 60 days after receipt of such refund or the benefit of such credit (such benefit to include any reduction of the taxes for which any Bank (or Transferee) or the Administrative Agent would otherwise be liable due to any increase in any foreign tax credit available to such Bank (or Transferee) or the Administrative Agent), repay the amount of such refund or benefit of such credit (with respect to the credit, as determined by the Bank, Transferee or Administrative Agent in its sole, reasonable judgment) to the Company (to the extent of amounts that have been paid by the Company under this subsection 2.19 with respect to Taxes giving rise to such refund or credit), plus any interest received with respect thereto, net of all reasonable out-of-pocket expenses of such Bank (or Transferee) or the Administrative Agent and without interest (other than interest actually received from the relevant taxing authority or other Governmental Authority with respect to such refund or credit); PROVIDED, HOWEVER, that the Company, upon the request of such Bank (or Transferee) or the Administrative Agent, agrees to return the amount of such refund or benefit of such credit (plus interest) to such Bank (or Transferee) or the Administrative Agent in the event such Bank (or Transferee) or the Administrative Agent is required to repay the amount of such refund or benefit of such credit to the relevant taxing authority or other Governmental Authority. (d) The agreements in this subsection shall survive the termination of this Agreement and the payment of all other amounts payable hereunder. 29 2.20 INDEMNITY. The Company agrees to indemnify each Bank and to hold each Bank harmless from any loss or expense which such Bank may sustain or incur as a consequence of (a) default by the Company in payment when due of the principal amount of or interest on any Eurodollar Loan or Fixed Rate Loan, (b) default by the Company in making a borrowing of, conversion into or continuation of any Eurodollar Loan, or any borrowing of a Fixed Rate Loan, after the Company has given a notice requesting the same in accordance with the provisions of this Agreement, (c) default by the Company in making any prepayment after the Company has given a notice thereof in accordance with the provisions of this Agreement or (d) the making of a prepayment of a Eurodollar Loan or Fixed Rate Loan on a day which is not the last day of an Interest Period with respect thereto, including, in each case, any such loss or expense arising from the reemployment of funds obtained by it (or which it has arranged to obtain) or from fees payable to terminate the deposits from which such funds were obtained (or which it has arranged to obtain). Such indemnification shall be in an amount equal to the excess, if any, of (i) the amount of interest which would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure), in each case at the applicable rate of interest for such Loans provided for herein (excluding the Applicable Margin included therein), over (ii) the amount of interest (as reasonably determined by such Bank) which would have accrued to such Bank on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurodollar market. Nothing in this Section shall be deemed to give the Company any right to prepay any Competitive Bid Loan or other Loan the prepayment of which is otherwise prohibited pursuant to the terms of this Credit Agreement. This covenant shall survive the termination of this Agreement and the payment of all other amounts payable hereunder. 2.21 ACTIONS OF BANKS. Each Bank agrees to use reasonable efforts (including reasonable efforts to change the Lending Installation for its Loans) to avoid or minimize any illegality pursuant to subsection 2.17 or any amounts which might otherwise be payable pursuant to subsection 2.18 or 2.19; PROVIDED, HOWEVER, that such efforts shall not cause the imposition on such Bank of any additional costs or legal or regulatory burdens deemed by such Bank to be material. In the event that such reasonable efforts are insufficient to avoid all such illegality, all such events or circumstances or all amounts that might be payable pursuant to subsection 2.18 or 2.19, then the Company may remove any such Bank pursuant to subsection 2.23 or replace any such Bank pursuant to subsection 2.24. 2.22 LENDING INSTALLATIONS. Each Bank may hold its Loans at any Lending Installation selected by it and may change its Lending Installation from time to time, provided that no such Bank shall be entitled to receive any greater amount under subsections 2.18, 2.19, 2.20 or 9.5 as a result of a transfer of any such Loans to a different office of such Bank than it would be entitled to immediately prior thereto unless such claim would have arisen even if such transfer had not occurred. All provisions of this Agreement shall apply to any such Lending Installation. Each Bank may, by written or telex notice to the Company and the Administrative Agent, designate a Lending Installation through which the Loans will be made by it and for whose account payments are to be made. 30 2.23 REMOVAL OF BANKS. The Company shall be permitted, from time to time in its discretion, to remove Banks from this Agreement and to reduce the Aggregate Commitment and the Aggregate Facilities Commitment; PROVIDED, that (a) the Aggregate Facilities Commitment may not be reduced below $5,000,000,000 as a result of removal of one or more Banks from this Agreement pursuant to this Section, (b) after giving effect to such removal, no Bank shall have a Commitment hereunder which exceeds an amount equal to 20% of the Aggregate Commitment and (c) a Bank may not be removed from this Agreement at any time a Default or an Event of Default exists and remains uncured or unwaived under this Agreement. If the Company elects to terminate the Commitment of a Bank, it shall give not less than 30 days written notice to the Administrative Agent and such Bank. On the effective date of such termination, the Company shall pay to the Administrative Agent, for the account of such Bank, in immediately available funds, an amount equal to all Loans and other amounts (including accrued interest and fees) owing to such Bank plus the amounts, if any, owing to such Bank under subsections 2.18, 2.19, 2.20 and 9.5. Notwithstanding the removal of any Bank pursuant to this subsection, such Bank shall continue to have all such rights as would survive the termination of this Agreement under subsections 2.18, 2.19, 2.20 and 9.5. 2.24 REPLACEMENT OF BANKS. In the event that any Bank (a "NOTIFYING BANK") (a) shall demand payment by the Company of any amount pursuant to subsection 2.18 or 2.19, (b) shall cause the suspension of the availability of any Type pursuant to subsection 2.17, (c) shall have excused itself from funding a Loan pursuant to subsection 2.17, (d) shall have failed to make available a Loan on the date on which it was obligated to do so or (e) shall have failed to consent to any waiver, amendment or modification of this Agreement that has been consented to by the Required Banks, the Company may, upon notice to such Notifying Bank and the Administrative Agent, nominate a new financial institution or group of financial institutions willing to participate in the facility in the place of such Notifying Bank ("REPLACEMENT BANK"). Upon receipt of such notice from the Company and upon the consent of the Administrative Agent as to the Replacement Bank, which consent shall not be unreasonably withheld, such Notifying Bank shall be obligated to transfer without recourse, representation, warranty (other than that it has not in any way transferred, assigned, encumbered, sold or conveyed its rights under its Loans) or expense to such Notifying Bank, all of its rights (other than rights that would survive the termination of this Agreement pursuant to subsections 2.18, 2.19, 2.20 and 9.5) and obligations hereunder to the Replacement Bank; PROVIDED that the Replacement Bank satisfies all of the requirements of this Agreement and pays such Notifying Bank all amounts owing to such Notifying Bank under this Agreement and the Company pays such Notifying Bank any funding losses incurred pursuant to subsection 2.20, if any, as a result of such replacement. This subsection 2.24 shall in no way affect the right of the Company to replace, remove or add a Bank pursuant to any other provision of this Agreement. 2.25 SWING LINE COMMITMENTS. (a) Subject to the terms and conditions hereof, each Swing Line Bank severally agrees to make short-term funding loans ("SWING LINE LOANS") to the Company from time to time during the Commitment Period in an aggregate principal amount at any one time outstanding not to exceed such Swing Line Bank's Swing Line Commitment; PROVIDED, that no Swing Line Loans may be made if, after giving effect thereto, (i) the Aggregate Outstanding Extensions of Credit of all the Banks would exceed the Aggregate 31 Commitment or (ii) the aggregate outstanding principal amount of Swing Line Loans of any Swing Line Bank would exceed such Swing Line Bank's Swing Line Commitment. (b) The Company may borrow under the Swing Line Commitments during the Commitment Period on any Business Day, PROVIDED that the Company shall give the Administrative Agent irrevocable telephonic notice (which notice must be received by the Administrative Agent prior to 3:00 P.M., New York City time, on the requested Borrowing Date and shall be promptly confirmed in writing), specifying the amount to be borrowed. Each borrowing under the Swing Line Commitments shall be in an amount equal to $1,000,000 or a whole multiple of $500,000 in excess thereof. Each such notice shall be in writing or by fax in the form of Exhibit F and shall include the information required as set forth therein. During the Commitment Period, the Company may use the Swing Line Commitments by borrowing, prepaying the Swing Line Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. Upon receipt of any such notice from the Company, the Administrative Agent shall promptly notify each Swing Line Bank thereof. Each Swing Line Bank will make the amount of its pro rata share of each borrowing (determined on the basis of its Swing Line Commitment) available to the Administrative Agent for the account of the Company at the office of the Administrative Agent specified in subsection 9.2 prior to 4:00 P.M. New York City time, on the Borrowing Date requested by the Company in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Company by the Administrative Agent at the office of the Administrative Agent specified in subsection 9.2 or to an account designated by the Company with the aggregate of the amounts made available to the Administrative Agent by the Swing Line Banks and in like funds as received by the Administrative Agent. Each Swing Line Loan will bear interest at the Base Rate. (c) The Administrative Agent may at any time in its sole and absolute discretion after the occurrence and during the continuance of a Default or an Event of Default, and, with respect to each Swing Line Loan which has not been repaid by the Company in immediately available funds prior to 10:30 A.M., New York City time, on the seventh Business Day after the Borrowing Date with respect to such Swing Line Loan shall, on behalf of the Company (which hereby irrevocably directs the Administrative Agent to act on its behalf) request prior to 12:00 Noon, New York City time, each Bank on such seventh day after the Borrowing Date with respect to such Swing Line Loan to make a Revolving Credit Loan in an amount equal to such Bank's Commitment Percentage of the amount of such Swing Line Loan (the "MATURING SWING LINE LOANS"). Unless any of the events described in paragraph (f) of Section 7 shall have occurred (in which event the procedures of paragraph (d) of this subsection 2.25 shall apply) each Bank shall make the proceeds of its Revolving Credit Loan available to the Administrative Agent for the account of the Swing Line Banks at the office of the Administrative Agent specified in subsection 9.2 prior to 11:00 A.M., New York City time, in funds immediately available one Business Day after the date such notice is given. The proceeds of such Revolving Credit Loans shall be immediately applied to repay the Maturing Swing Line Loan. Each Revolving Credit Loan made pursuant to this subsection 2.25(c) shall be a Base Rate Loan. (d) If prior to the making of a Revolving Credit Loan pursuant to paragraph (c) of this subsection 2.25 one of the events described in paragraph (f) of Section 7 shall have 32 occurred, each Bank will on the date such Revolving Credit Loan was to have been made, purchase an undivided participating interest in the Maturing Swing Line Loan that was to have been refunded with the proceeds of such Revolving Credit Loan in an amount equal to its Commitment Percentage of such Maturing Swing Line Loan. Each Bank will immediately transfer to the Administrative Agent, in immediately available funds, the amount of its participation and upon receipt thereof (i) the Administrative Agent will make such funds available to each Swing Line Bank based pro rata on their respective portion of such Swing Line Loan and (ii) each such Swing Line Bank will deliver to the Administrative Agent, and the Administrative Agent will in turn promptly deliver to each such Bank, a Swing Line Loan participation certificate dated the date of receipt of such funds and in such amount. (e) Whenever, at any time after the Administrative Agent has received from any Bank such Bank's participating interest in a Maturing Swing Line Loan, the Administrative Agent receives any payment on account thereof, the Administrative Agent will distribute to such Bank its participating interest in such amount (appropriately adjusted in the case of interest payments, to reflect the period of time during which such Bank's participating interest was outstanding and funded); PROVIDED, HOWEVER, that in the event that such payment received by the Administrative Agent is required to be returned, such Bank will return to the Administrative Agent any portion thereof previously distributed by the Administrative Agent to it. (f) Each Bank's obligation to purchase participating interests pursuant to this subsection 2.25 shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right which such Bank or the Company may have against the Administrative Agent or any Swing Line Bank, the Company or anyone else for any reason whatsoever; (ii) the occurrence or continuance of an Event of Default; (iii) any adverse change in the financial condition of the Company; (iv) any breach of this Agreement by the Company or any other Bank; or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Banks to enter into this Agreement and to make the Loans, the Company hereby represents and warrants to the Administrative Agent and each Bank that: 3.1 FINANCIAL CONDITION. The consolidated balance sheet of the Company and its consolidated Subsidiaries as of December 31, 1998, and the related consolidated statements of income and of cash flows for the fiscal years ended on such dates, reported on by KPMG Peat Marwick, copies of which have heretofore been furnished to each Bank, present fairly the consolidated financial condition of the Company and its consolidated Subsidiaries as at such dates, and the consolidated results of their operations and their consolidated cash flows for the fiscal year then ended. All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by such accountants or Responsible Officer, as the case may be, and as disclosed therein). 33 3.2 NO CHANGE. Since December 31, 1998 and until the date of this Agreement there has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect. 3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW; SIGNIFICANT SUBSIDIARIES. Each of the Company and its Significant Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and (b) has the power and authority to conduct the business in which it is currently engaged. As of December 31, 1998 (based on the full 1998 fiscal year), each Significant Subsidiary is listed on Schedule II hereto. 3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The Company has the corporate power and authority to make, deliver and perform this Agreement and to borrow hereunder and has taken all necessary corporate action to authorize the borrowings on the terms and conditions of this Agreement and to authorize the execution, delivery and performance of this Agreement. No consent or authorization of, filing with or other act by or in respect of, any Governmental Authority or any other Person is required on the part of the Company in connection with the borrowings hereunder or with the execution, delivery, performance, validity or enforceability of this Agreement. This Agreement has been duly executed and delivered on behalf of the Company. This Agreement constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). 3.5 NO LEGAL BAR. The execution, delivery and performance of this Agreement, the borrowings hereunder and the use of the proceeds thereof will not violate any Requirement of Law or material Contractual Obligation of the Company or of any of its Significant Subsidiaries and will not result in, or require, the creation or imposition of any Lien on any of its or their material respective properties or revenues pursuant to any such Requirement of Law or material Contractual Obligation. 3.6 NO MATERIAL LITIGATION. (a) No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Company, threatened by or against the Company or any of its Significant Subsidiaries or against any of its or their respective properties or revenues, in any case that involves this Agreement, the execution, delivery and performance of this Agreement or the Borrowings hereunder. (b) No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Company, threatened by or against the Company or any of its Significant Subsidiaries or against any of its or their respective properties or revenues which could reasonably be expected to result in a violation of subsection 6.3. 3.7 NO DEFAULT. (a) Neither the Company nor any of its Significant Subsidiaries is in default under or with respect to any of its Contractual Obligations in any respect which could reasonably be expected to result in a violation of subsection 6.3. 34 (b) No Default or Event of Default has occurred and is continuing. 3.8 AGGREGATION OF THE REPRESENTATIONS AND WARRANTIES RELATING TO NET WORTH. The total effect of each event or circumstance referred to in subsections 3.6(b) and 3.7(a) is not, when taken together in the aggregate, reasonably expected to result in a violation of subsection 6.3. 3.9 FEDERAL REGULATIONS. No part of the proceeds of any Loans will be used for "purchasing" or "carrying" any "margin stock" within the respective meanings of each of the quoted terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect or for any purpose which violates the provisions of Regulations T, U and X of such Board of Governors. 3.10 ERISA. Each Plan complies in all material respects with all applicable provisions of ERISA and the Code, no Reportable Event has occurred with respect to any Plan, neither the Company nor any other members of any Commonly Controlled Entity has withdrawn from any Plan or initiated steps to do so, and no steps have been taken to terminate any Plan, except in any case to the extent that such failures could not, in the aggregate, reasonably be expected to result in a violation of subsection 6.3. 3.11 INVESTMENT COMPANY ACT. The Company is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended. 3.12 PURPOSE OF LOANS. The proceeds of the Loans shall be used by the Company for general corporate purposes and to repay outstanding Indebtedness. SECTION 4. CONDITIONS PRECEDENT 4.1 CONDITIONS TO INITIAL LOANS. The agreement of each Bank to make the initial Loan requested to be made by it is subject to the satisfaction of the following conditions precedent: (a) CREDIT AGREEMENT. The Administrative Agent shall have received this Agreement, executed and delivered by a duly authorized officer of the Company, with a counterpart for each Bank. (b) CORPORATE PROCEEDINGS OF THE COMPANY. The Administrative Agent shall have received, with a counterpart for each Bank, a copy of the resolutions, in form and substance satisfactory to the Administrative Agent, of the Board of Directors of the Company authorizing (i) the execution, delivery and performance of this Agreement, and (ii) the borrowings contemplated hereunder, certified by the Secretary or an Assistant Secretary of the Company as of the Closing Date pursuant to a certificate substantially in the form of Exhibit D-2, which certificate shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded. (c) CORPORATE DOCUMENTS. The Administrative Agent shall have received, with a counterpart for each Bank, true and complete copies of the certificate of 35 incorporation and by-laws of the Company, certified as of the Closing Date as complete and correct copies thereof by the Secretary or an Assistant Secretary of the Company. (d) LEGAL OPINIONS. The Administrative Agent shall have received, with a counterpart for each Bank, (i) the executed legal opinion of the general counsel of the Company, substantially in the form of Exhibit B-1, and (ii) the executed legal opinion of Simpson Thacher & Bartlett, counsel to the Administrative Agent, substantially in the form of Exhibit B-2. (e) CERTIFICATES. The Administrative Agent shall have received, with a counterpart for each Bank, an officer's certificate of the chief financial officer, treasurer or controller of the Company, substantially in the form of Exhibit D-1, and a certificate of incumbency of the Company, substantially in the form of Exhibit E. (f) EXISTING CREDIT AGREEMENTS. The Administrative Agent shall have received evidence satisfactory to it that the Existing Credit Agreements have been terminated and all amounts, if any, owing by the borrowers thereunder have been paid in full. (g) TRANSFER INSTRUCTIONS. The Administrative Agent shall have received written money transfer instructions addressed to the Administrative Agent and signed by a duly authorized officer, together with such other related money transfer authorizations as the Administrative Agent may have reasonably requested. 4.2 CONDITIONS TO EACH LOAN. The agreement of each Bank to make any Loan requested to be made by it on any date (including, without limitation, its initial Loan) is subject to the satisfaction of the following conditions precedent: (a) REPRESENTATIONS AND WARRANTIES. Each of the representations and warranties made by the Company in Section 3 of this Agreement shall be true and correct in all material respects on and as of such date as if made on and as of such date except (i) to the extent such representations and warranties expressly relate to an earlier date; (ii) for changes in the Schedules hereto reflecting transactions permitted by this Agreement and (iii) subsequent to the Closing Date, for the representations and warranties contained in subsection 3.2. (b) NO DEFAULT. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the Loans requested to be made on such date. (c) BORROWING NOTICE. The Administrative Agent shall have received a notice of borrowing from the Company, substantially in the form of Exhibit F. Each Borrowing by the Company hereunder shall constitute a representation and warranty by the Company as of the date of such Loan that the conditions contained in this subsection 4.2 have been satisfied. It is understood and agreed that conversions and continuations of Revolving 36 Credit Loans pursuant to subsection 2.10 shall not be subject to the conditions set forth in this subsection 4.2. SECTION 5. AFFIRMATIVE COVENANTS The Company hereby agrees that, so long any Commitment shall remain in effect, any principal of or interest on any Loan or any other amount shall be unpaid hereunder, the Company shall: 5.1 FINANCIAL STATEMENTS. Furnish to: (a) each Bank, promptly after becoming available, each annual and quarterly report which the Company files with the SEC; (b) each Bank, promptly after becoming available and in any event within 120 days after the end of each fiscal year of the Company, a consolidated balance sheet of the Company and its consolidated Subsidiaries as of the end of such fiscal year and the related consolidated statements of income and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on in a manner acceptable to the SEC by KPMG Peat Marwick or other independent public accountants of nationally recognized standing (PROVIDED that no such financial statements of the Company need be so delivered if the Company shall have delivered to such Bank its annual report for the relevant year containing such financial statements pursuant to subsection 5.1(a)); (c) each Bank, promptly after becoming available and in any event within 60 days after the end of each of the first three quarters of each fiscal year of the Company, (i) a consolidated balance sheet of the Company and its consolidated Subsidiaries as of the end of such quarter and (ii) the related consolidated statements of income and cash flows for such quarter and for the portion of the Company's fiscal year ended at the end of such quarter, setting forth in comparative form (i) in the case of clause (i) above, the figures for the previous fiscal year end, and (ii) in the case of clause (ii) above, the figures for the corresponding quarter and the corresponding portion of the Company's previous fiscal year, all certified (subject to the absence of footnotes and normal year-end adjustments) as to fairness of presentation, generally accepted accounting principles and consistency by the chief financial officer or the chief accounting officer of the Company (the "CERTIFICATE") (PROVIDED that no such financial statements of the Company or the Certificate need be so delivered if the Company shall have delivered to such Bank its quarterly report for the relevant quarter containing such financial statements pursuant to subsection 5.1(a); all such financial statements to fairly present in all material respects the financial condition and results of operations of the Company and to be prepared in reasonable detail and in accordance with Agreement Accounting Principles (except as approved by such accountants or officer, as the case may be, and disclosed therein); 37 (d) the Administrative Agent (for distribution to each Bank), each Report on Form 8-K (if any) which the Company files with the SEC; (e) the Administrative Agent (for distribution to each Bank), upon specific request, copies of all financial statements and reports which the Company has sent to holders of its publicly issued debt securities, and after the same are filed, copies of all financial statements and reports which the Company may make to, or file with, the SEC; and (f) the Administrative Agent (for distribution to each Bank requesting such information), promptly, such other information regarding the operations, business affairs and financial condition of the Company as any Bank may from time to time reasonably request through the Administrative Agent. 5.2 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy, and cause each of its Significant Subsidiaries to pay, discharge or otherwise satisfy, at or before maturity or before they become delinquent, as the case may be, all its obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of the Company or its Significant Subsidiaries, as the case may be, or except to the extent that the failure to pay, discharge or otherwise satisfy the same could not, in the aggregate, reasonably be expected to result in a violation of subsection 6.3. 5.3 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Preserve, renew and keep in full force and effect, and cause each of its Significant Subsidiaries to preserve, renew and keep in full force and effect, its corporate existence and take, and cause each of its Significant Subsidiaries to take, all reasonable action to maintain all rights, privileges and franchises material to the normal conduct of its significant businesses, PROVIDED, HOWEVER, that notwithstanding this subsection 5.3, the Company or any Significant Subsidiary may (a) discontinue any of its businesses that are no longer deemed advantageous to it (such determination to be in the sole and absolute discretion of the Company or such Significant Subsidiary) and (b) sell or dispose of any assets, subsidiaries or the capital stock thereof, or consolidate with, accept a merger of, or permit the merger of such Person into any other Person in a transaction permitted pursuant to subsection 6.2; and comply, and cause each of its Significant Subsidiaries to comply, in all material respects with all Requirements of Law (including, but not limited to, ERISA), except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to result in a violation of subsection 6.3. 5.4 NOTICES. Promptly give notice (or in the case of subsection 5.4(d), a copy) to the Administrative Agent of: ------- (a) the occurrence of any Default or Event of Default; (b) any litigation, investigation or proceeding affecting the Company or any of its Significant Subsidiaries which could reasonably be expected to result in a violation of subsection 6.3; 38 (c) the following events, as soon as possible and in any event within 30 days after the Company knows or has reason to know thereof: (i) the occurrence or expected occurrence of any Reportable Event with respect to any Plan, or any withdrawal from, or the termination, Reorganization or Insolvency of any Multiemployer Plan or (ii) the institution of proceedings or the taking of any other action by the PBGC or the Company or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the termination, Reorganization or Insolvency of, any Plan, in any event which could reasonably be expected to result in a Material Adverse Effect; and (d) as soon as possible and in any event within 30 days after receipt by the Company, a copy of (i) any notice or claim to the effect that the Company or any Subsidiary is or may be liable to any Person as a result of the release by the Company, any of its Subsidiaries, or any other Person of any toxic or hazardous waste or substance into the environment, and (ii) any notice alleging any violation of any federal, state or local environmental, health or safety law or regulation by the Company or any Subsidiary, which could reasonably be expected to result in a claim, liability or loss that will, in the case of clauses (i) or (ii), when aggregated with the effect of any failure by the Company to (x) maintain and preserve all property material to the conduct of its business, (y) keep such property in good repair, working order and condition and (z) from time to time make, or cause to be made, all needful and proper repairs, renewals, additions, improvements and replacements thereto, result in a violation of subsection 6.3. Each notice pursuant to this subsection shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the Company proposes to take with respect thereto. 5.5 STATUS OF OBLIGATIONS. Ensure that its obligations under this Agreement shall at all times be direct and general obligations of the Company and shall at all times rank at least pari passu in all respects with all other outstanding unsecured and unsubordinated indebtedness of the Company. 5.6 MAINTENANCE OF PROPERTY. At all times maintain and preserve, and cause each of its Significant Subsidiaries to maintain and preserve, all property material to the conduct of its business and keep such property in good repair, working order and condition and from time to time make, or cause to be made, all needful and proper repairs, renewals, additions, improvements and replacements thereto except where the failure to do so would not result in a violation of subsection 6.3; PROVIDED, HOWEVER, that nothing in this subsection 5.6 shall prevent the Company or any Subsidiary from (a) discontinuing the operation and maintenance of any of its properties no longer deemed useful in the conduct of its business or (b) selling or disposing of any assets, subsidiaries or the capital stock thereof in a transaction permitted pursuant to subsection 6.2. 5.7 PAYMENT OF TAXES. Pay and discharge promptly when due, and cause each of its Significant Subsidiaries to pay and discharge promptly when due, all taxes, assessments and governmental charges or levies the amounts of which are material to the business, assets, operations, prospects or condition, financial or otherwise, of the Company and the Subsidiaries 39 taken as a whole, imposed upon it or upon its income or profits or in respect of its property, before the same shall become delinquent or in default; provided, however, that such payment and discharge shall not be required with respect to any such tax, assessment, charge, or levy so long as the validity or amount thereof shall be contested in good faith by appropriate actions or proceedings and the Company shall have set aside on its books appropriate reserves with respect thereto. 5.8 USE OF PROCEEDS. Use the proceeds of the Loans for general corporate purposes and to repay outstanding Indebtedness. The Company will not, nor will it permit any Subsidiary to, use any of the proceeds of the Loans to purchase or carry any "margin stock" (as defined in Regulation U). SECTION 6. NEGATIVE COVENANTS The Company hereby agrees that, so long as any Commitment remains in effect, or any principal of or interest on any Loan or any other amount shall be unpaid hereunder, the Company shall not: 6.1 NEGATIVE PLEDGE. (a)(1) Create, incur or suffer to exist any Lien upon any of its property or assets to secure indebtedness for money borrowed, incurred, issued, assumed or guaranteed by the Company or (2) create any Lien upon any of its property or assets to secure any indebtedness or other obligations of any Person if such Lien is a Lien created by any action of the Company (including any grant by the Company of any Lien pursuant to a written instrument or by the pledge by the Company of property, but excluding Liens arising by operation of law), without, in the case of any Lien described in the foregoing clauses (1) and (2), thereby expressly securing the due and punctual payment of the principal of and interest on the Loans and all other amounts payable by the Company hereunder equally and ratably with any and all other obligations and indebtedness secured by such Lien, so long as any such other obligations and indebtedness shall be so secured; PROVIDED, HOWEVER, that this restriction shall not prohibit or otherwise restrict: (i) the Company from creating, incurring or suffering to exist upon any of its property or assets any Lien in favor of any subsidiary of the Company; (ii) the Company (A) from creating, incurring or suffering to exist a purchase money Lien upon any such property, assets, capital stock or indebtedness acquired by the Company prior to, at the time of, or within one year after (1) in the case of physical property or assets, the later of the acquisition, completion of construction (including any improvements on existing property) or commencement of commercial operation of such property or (2) in the case of shares of capital stock, indebtedness or other property or assets, the acquisition of such shares of capital stock, indebtedness, property or assets, (B) from acquiring property or assets subject to Liens existing thereon at the date of acquisition thereof, whether or not the indebtedness secured by any such Lien is assumed or guaranteed by the Company, or (C) from creating, incurring or suffering to exist Liens upon any property of any Person, which Liens exist at the time any such Person is merged with or into or consolidated with the Company (or becomes a subsidiary of the 40 Company) or which Liens exist at the time of a sale or transfer of the properties of any such Person as an entirety or substantially as an entirety to the Company; (iii) the Company from creating, incurring or suffering to exist upon any of its property or assets Liens in favor of the United States of America or any State thereof or the District of Columbia, or any agency, department or other instrumentality thereof, to secure progress, advance or other payments pursuant to any contract or provision of any statute (including maintaining self-insurance or participating in any fund in connection with worker's compensation, disability benefits, unemployment insurance, old age pensions or other types of social benefits, or joining in any other provisions or benefits available to companies participating in any such arrangements); (iv) the Company from creating, incurring or suffering to exist upon any of its property or assets Liens securing the performance of letters of credit, bids, tenders, sales contracts, purchase agreements, repurchase agreements, reverse repurchase agreements, bankers' acceptances, leases, surety and performance bonds, and other similar obligations incurred in the ordinary course of business; (v) the Company from creating, incurring or suffering to exist Liens upon any real property acquired or constructed by the Company primarily for use in the conduct of its business; (vi) the Company from entering into any arrangement with any Person providing for the leasing by the Company of any property or assets, which property or assets have been or will be sold or transferred by the Company to such Person with the intention that such property or assets will be leased back to the Corporation, if the obligations in respect of such lease would not be included as liabilities on a consolidated balance sheet of the Company; (vii) the Company from creating, incurring or suffering to exist upon any of its property or assets Liens to secure non-recourse debt in connection with the Company engaging in any leveraged or single-investor or other lease transactions, whether (in the case of Liens on or relating to leases or groups of leases or the particular properties subject thereto) such Liens are on the particular properties subject to any leases involved in any of such transactions and/or the rental or other payments or rights under such leases or, in the case of any group of related or unrelated leases, on the properties subject to the leases comprising such group and/or on the rental or other payments or rights under such leases, or on any direct or indirect interest therein, and whether (in any case) (A) such Liens are created prior to, at the time of, or at any time after the entering into of such lease transactions and/or (B) such leases are in existence prior to, or are entered into by the Company at the time of or at any time after, the purchase or other acquisition by the Company of the properties subject to such leases; (viii) the Company from creating, incurring or suffering to exist (A) other consensual Liens in the ordinary course of business of the Company that secure indebtedness that, in accordance with generally accepted accounting principles, would not be included in total liabilities as shown on the Company's consolidated balance sheet, or (B) Liens created by the Company in connection with any transaction intended by the Company to be a sale of property or 41 assets of the Company, PROVIDED that such Liens are upon any or all of the property or assets intended to be sold, the income from such property or assets and/or the proceeds of such property or assets; (ix) the Company from creating, incurring or suffering to exist Liens on property or assets financed through tax-exempt municipal obligations, PROVIDED that such Liens are only on the property or assets so financed; (x) any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any of the foregoing; PROVIDED, HOWEVER, that any such extension, renewal or replacement shall be limited to all or a part of the property or assets (or substitutions therefor) which secured the Lien so extended, renewed or replaced (plus improvements on such property); and (xi) the Company from creating, incurring or suffering to exist any other Lien not otherwise permitted by any of the foregoing clauses (i) through (ix) above if the aggregate amount of all secured debt of the Company secured by such Liens would not exceed 5% of the excess of the Company's consolidated assets over the consolidated liabilities as shown on the Company's most recent audited consolidated financial statements in accordance with generally accepted accounting principles. (b) For the purposes of this subsection 6.1, any contract by which title is retained as security (whether by lease, purchase, title retention agreement or otherwise) for the payment of a purchase price shall be deemed to be a purchase money Lien. Nothing in this subsection 6.1 shall apply to any Lien of any kind upon any of the properties of any character of the Company existing on the date of execution and delivery of this Agreement. (c) Subject to subsection 6.3, nothing contained in this subsection 6.1 or elsewhere in this Agreement shall prevent or be deemed to prohibit the creation, assumption or guaranty by the Company of any indebtedness not secured by a Lien or the issuance by the Company of any debentures, notes or other evidences of indebtedness not secured by a Lien, whether in the ordinary course of business or otherwise. 6.2 CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. Consolidate with any other corporation or accept a merger of any other corporation into the Company or permit the Company to be merged into any other corporation, or sell its properties and assets as, or substantially as, an entirety; PROVIDED, HOWEVER, that subject to the provisions of subsection 6.1, nothing contained in this Agreement shall be deemed to prevent (i) the merger into the Company of another corporation, (ii) the consolidation of the Company and another corporation, (iii) the merger of the Company into another corporation or (iv) the sale of the property or assets of the Company to another corporation, so long as (a) no Default or Event or Default shall have occurred and be continuing and (b) with respect to clauses (ii), (iii) and (iv) above, the surviving corporation of the merger or the purchaser of the Company's assets, as the case may be, shall expressly assume the obligations of the Company under this Agreement and expressly agree to be bound by all other provisions applicable to the Company under this Agreement. 42 6.3 NET WORTH. Permit Net Worth at any time to be less than $3,750,000,000. SECTION 7. EVENTS OF DEFAULT If any of the following events shall occur and be continuing: (a) The Company shall (i) fail to pay any principal of any Loan when due in accordance with the terms hereof; (ii) fail to pay any interest on any Loan, any Utilization Fee or any Facility Fee within five Business Days after any such interest or fee becomes due in accordance with the terms hereof; or (iii) fail to pay any expenses or other amounts payable under this Agreement to the Administrative Agent or any Bank within fifteen days after such expenses or other amounts become due in accordance with the terms hereof; or (b) Any representation or warranty made or deemed made by the Company herein or which is contained in any certificate, document or financial or other statement furnished at any time under or in connection with this Agreement shall prove to have been incorrect in any material respect on or as of the date made or deemed made; or (c) The Company shall default in the observance or performance of any agreement contained in Section 6; or (d) The Company shall default in the observance or performance of any other agreement contained in this Agreement (other than as provided in paragraphs (a) through (c) of this Section), and such default shall continue unremedied for a period of 30 days after notice shall have been given to the Company by the Administrative Agent; or (e) Any event or condition shall occur which results in the acceleration of the maturity of any Indebtedness of the Company or any of its Significant Subsidiaries in an aggregate principal amount equal to or greater than $100,000,000; or the Company or any of its Significant Subsidiaries shall not make any liquidation or termination payment or payments in an aggregate amount equal to or greater than $100,000,000 when it becomes due (any applicable grace period having expired) under one or more Hedging Agreements; or the Company or any of its Significant Subsidiaries shall not pay the principal of or interest on any Indebtedness with respect to Indebtedness in an aggregate principal amount in excess of $100,000,000 when it becomes due and beyond any period of grace with respect thereto; or (f) (i) The Company or any of its Significant Subsidiaries shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets, or the Company or any of its Significant Subsidiaries shall make a general assignment for the benefit of its 43 creditors; or (ii) there shall be commenced against the Company or any of its Significant Subsidiaries any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against the Company or any of its Significant Subsidiaries any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) the Company or any of its Significant Subsidiaries shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the Company or any of its Significant Subsidiaries shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or (g) (i) Any Person shall engage in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the Company or any Commonly Controlled Entity shall incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other event or condition shall occur or exist, with respect to a Plan; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to result in a violation of subsection 6.3; or (h) One or more judgments or decrees shall be entered against the Company or any of its Significant Subsidiaries involving in the aggregate a liability (not paid or fully covered by insurance) of $100,000,000 or more and such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 90 days from the entry thereof; or (i) If at any time the Company and its Significant Subsidiaries shall become liable for remediation and/or environmental compliance expenses and/or fines, penalties or other charges which, in the aggregate, could reasonably be expected to result in a violation of subsection 6.3; then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (f) above with respect to the Company, automatically the Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement shall immediately become due and payable, and (B) if 44 such event is any other Event of Default, either or both of the following actions may be taken: (i) with the consent of the Required Banks, the Administrative Agent may, or upon the request of the Required Banks the Administrative Agent shall, by notice to the Company declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate; and (ii) with the consent of the Required Banks, the Administrative Agent may, or upon the request of the Required Banks the Administrative Agent shall, by notice of default to the Company, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement to be due and payable forthwith, whereupon the same shall immediately become due and payable. Except as expressly provided above in this Section, presentment, demand, protest and all other notices of any kind are hereby expressly waived. SECTION 8. THE AGENTS 8.1 APPOINTMENT. Each Bank hereby designates and appoints Chase as the Administrative Agent of such Bank under this Agreement, and each such Bank authorizes Chase as the Administrative Agent to take such action on its behalf under the provisions of this Agreement and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Bank, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or otherwise exist against the Administrative Agent. The Arranger and the Syndication Agents, in their respective capacities as such, shall not have any duties or responsibilities hereunder nor any fiduciary relationship with any Bank, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or otherwise exist against the Arranger or the Syndication Agents in their respective capacities as such. 8.2 DELEGATION OF DUTIES. The Administrative Agent may execute any of its duties under this Agreement by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. 8.3 EXCULPATORY PROVISIONS. Neither the Administrative Agent nor any of its officers, directors, employees, 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 this Agreement (except for its or such Person's own gross negligence or willful misconduct) or (ii) responsible in any manner to any of the Banks for any recitals, statements, representations or warranties made by the Company or any officer thereof contained in this Agreement or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or for any failure of the Company to perform its obligations hereunder or thereunder. The Administrative Agent shall not be under any obligation to any Bank to ascertain or to inquire as to the observance or 45 performance of any of the agreements contained in, or conditions of, this Agreement, or to inspect the properties, books or records of the Company. 8.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Company), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent may deem and treat the payee of the Bank specified in the Register with respect to any amount owing hereunder as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement unless it shall first receive such advice or concurrence of the Required Banks as it deems appropriate and it shall first be indemnified to its satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement in accordance with a request of the Required Banks, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Banks and all future holders of the obligations owing by the Company hereunder. 8.5 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Administrative Agent has received notice from a Bank or the Company referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default". In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give notice thereof to the Banks. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Banks; PROVIDED that unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Banks. 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER BANKS. Each Bank expressly acknowledges that neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by the Administrative Agent hereinafter taken, including any review of the affairs of the Company, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Bank. Each Bank represents to the Administrative Agent that it has, independently and without reliance upon the Administrative 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, operations, property, financial and other condition and creditworthiness of the Company and made its own decision to make its Loans hereunder and enter into this Agreement. Each Bank also represents that it will, independently and without reliance upon the Administrative Agent or any other Bank, and based on such documents and 46 information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Company. Except for notices, reports and other documents expressly required to be furnished to the Banks by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Bank with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of the Company which may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates. 8.7 INDEMNIFICATION. The Banks agree to indemnify the Administrative Agent in its capacity as such (to the extent not reimbursed by the Company and without limiting the obligation of the Company to do so), ratably according to their respective Commitment Percentages in effect on the date on which indemnification is sought under this Section (or, if indemnification is sought after the date upon which the Commitment shall have terminated and the Loans shall have been paid in full, ratably in accordance with their Commitment Percentages immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Loans and all other amounts owing hereunder) be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of this Agreement or any documents contemplated by or referred to herein or the transactions contemplated hereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; PROVIDED that no Bank shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent's gross negligence or willful misconduct. The agreements in this subsection shall survive the payment of the Loans and all other amounts payable hereunder. 8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The Administrative Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Company as though the Administrative Agent were not the Administrative Agent hereunder. With respect to its Loans made or renewed by it, the Administrative Agent shall have the same rights and powers under this Agreement as any Bank and may exercise the same as though it were not the Administrative Agent, and the terms "Bank" and "Banks" shall include the Administrative Agent in its individual capacity. 8.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may resign as Administrative Agent upon thirty days' notice to the Banks, and may be removed at any time with or without cause by the Required Banks. Upon any resignation or removal of the Administrative Agent, the Required Banks shall appoint from among the Banks a successor Administrative Agent for the Banks, which successor Administrative Agent shall be approved by the Company. If no successor Administrative Agent shall have been so approved by the Company and shall have accepted such appointment within thirty days after the resignation of the Administrative Agent, then in place or the Required Banks' removal of the retiring 47 Administrative Agent, such retiring Administrative Agent may, on behalf of the Banks, appoint a successor Administrative Agent (which shall be a commercial bank or trust company organized or licensed under the laws of the United States or any state thereof) which appointment shall be subject to the approval of the Company such approval not to be unreasonably withheld. Upon the acceptance of any appointment as Administrative Agent hereunder, such successor Administrative Agent shall succeed to the rights, powers and duties of the Administrative Agent and the term "Administrative Agent" shall mean such successor agent effective upon its appointment, and the former Administrative Agent's rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement or any holders of the obligations owing hereunder. After any retiring Administrative Agent's resignation or removal as Administrative Agent, the provisions of this subsection shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement. SECTION 9. MISCELLANEOUS 9.1 AMENDMENTS AND WAIVERS. Neither this Agreement, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this subsection. With the written consent of the Required Banks, the Administrative Agent and the Company may, from time to time, enter into written amendments, supplements or modifications hereto for the purpose of adding any provisions to this Agreement or adding any financial institution (other than as provided for herein) as a Bank hereunder (thereby increasing the Aggregate Commitment) or changing in any manner the rights of the Banks or of the Company hereunder or thereunder or waiving, on such terms and conditions as the Administrative Agent may specify in such instrument, any of the requirements of this Agreement or any Default or Event of Default and its consequences; PROVIDED, HOWEVER, that no such waiver and no such amendment, supplement or modification shall (a) reduce the amount or extend the maturity of any Loan or any installment thereof, or reduce the rate of interest (other than default interest rates) thereon or extend the time of payment of interest or fees thereon, or reduce any fee payable to any Bank hereunder, or change the amount of any Bank's Commitment, in each case without the written consent of the Bank affected thereby, or (b) amend, modify or waive any provision of subsection 2.7, subsection 2.1(c) or this subsection, amend the definition of Required Banks or consent to the assignment or transfer by the Company of any of its rights and obligations under this Agreement (other than as set forth in subsection 6.2), in each case without the written consent of all the Banks, or (c) amend, modify or waive any provision of Section 8 or any reference to the Administrative Agent or the Syndication Agents in any other provision of this Agreement which alters the duties or obligations of the Administrative Agent or the Syndication Agents without the written consent of the then Administrative Agent or the Syndication Agents, as the case may be. Nothing in this subsection 9.1 shall prevent or prohibit the Administrative Agent, the Company or any Bank from taking any action in accordance with subsection 2.1(c), 2.7, 2.21, 2.23 or 2.24 notwithstanding anything contained in this subsection 9.1 to the contrary, including, without limitation (i) preventing the Administrative Agent from increasing the Aggregate Commitment or the Aggregate Facilities Commitment, (ii) preventing any Bank from increasing its Commitment or prohibiting the execution and delivery of any Commitment Increase Supplement, (iii) preventing an Other Bank from becoming an Additional Bank or prohibiting the execution and delivery of an Additional Bank Agreement, (iv) 48 preventing a Non-Extending Bank from transferring its rights and obligations hereunder to a Continuing Bank, (v) preventing a Notifying Bank from transferring its rights and obligations to a Replacement Bank, or (vi) the modification, amendment or supplement of this Agreement (including, without limitation, Schedule I), in each case solely in accordance with, or upon a transfer by a Bank of its rights and obligations hereunder pursuant to, the applicable provisions of subsection 2.1(c), 2.7, 2.21, 2.23 or 2.24. Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Banks and shall be binding upon the Company, the Banks, the Agents and all future holders of the obligations owing hereunder. In the case of any waiver, the Company, the Banks and the Agents shall be restored to their former position and rights hereunder, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. 9.2 NOTICES. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy, telegraph or telex), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered by hand, or three days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when received, or, in the case of telegraphic notice, when delivered to the telegraph company, or, in the case of telex notice, when sent, answerback received, addressed, in the case of the Company and the Administrative Agent, as follows, and as set forth on Schedule I in the case of the other parties hereto, or to such other address as may be hereafter notified by the respective parties hereto and any future holders of the obligations owing hereunder: The Administrative Agent: The Chase Manhattan Bank Agency Services Group 1 Chase Manhattan Plaza - 8th Floor New York, New York 10081 Attention: Frank Forlenza Telecopy: (212) 552-7490 The Company: The CIT Group, Inc. 1211 Avenue of the Americas New York, New York 10036 Attention: Senior Vice President and Treasurer Telecopy: (212) 536-1971 9.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Bank, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and warranties made hereunder and in any document, certificate or statement delivered pursuant 49 hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans hereunder. 9.5 PAYMENT OF EXPENSES AND TAXES. The Company agrees (a) to pay or reimburse the Administrative Agent for all of its reasonable out-of-pocket costs and expenses incurred in connection with the preparation and execution of, and any amendment, supplement or modification to, this Agreement and any other documents prepared in connection herewith (including, without limitation, any Commitment Increase Supplement or Additional Bank Agreement pursuant to subsection 2.1), including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent, (b) to pay or reimburse each Bank and the Agents for all its reasonable costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement and any such other documents, including, without limitation, reasonable fees and disbursements (including the allocated costs and expenses of in-house counsel) of counsel to the Administrative Agent and to the several Banks, (c) to pay, indemnify, and hold each Bank and the Administrative Agent harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement and any such other documents, and (d) to pay, indemnify, and hold each Bank and the Administrative Agent harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement, any Loan (including the use of proceeds thereof) and any such other documents (all the foregoing, collectively, the "INDEMNIFIED LIABILITIES"), PROVIDED, that the Company shall have no obligation hereunder to any Administrative Agent or any Bank with respect to indemnified liabilities arising from (i) the gross negligence or willful misconduct of such Administrative Agent or such Bank, (ii) legal proceedings commenced against any Administrative Agent or any Bank by any security holder or creditor thereof arising out of and based upon rights afforded any such security holder or creditor solely in its capacity as such, or (iii) legal proceedings commenced against any Agent or any Bank by any other Bank or by any Transferee. The agreements in this subsection shall survive repayment of the Loans and all other amounts payable hereunder. 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING BANKS. (a) This Agreement shall be binding upon and inure to the benefit of the Company, the Administrative Agent, the Banks, all future holders of the obligations owing hereunder and their respective successors and assigns, except that the Company may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of each Bank (except as provided in subsection 6.2). (b) Any Bank may, in the ordinary course of its commercial banking business and in accordance with applicable law, at any time sell to one or more banks or other entities ("PARTICIPANTS") participating interests in any Loan owing to such Bank, any Commitment of such Bank or any other interest of such Bank hereunder. In the event of any such sale by a Bank of participating interests to the Participant, such Bank's obligations under this Agreement to the 50 other parties to this Agreement shall remain unchanged, such Bank shall remain solely responsible for the performance thereof, such Bank shall remain the holder of any obligation owing to it hereunder for all purposes under this Agreement, and the Company and the Administrative Agent shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement; PROVIDED, that such Bank shall retain the sole right to approve, without the consent of any Participant, any amendment, modification or waiver of any provision of the Credit Agreement other than, as may be agreed to by such Bank and Participant, any amendment, modification or waiver with respect to any Loan or Commitment in which such Participant has an interest which forgives principal, interest or fees or reduces the interest rate or fees payable with respect to any such Loan or Commitment or postpones any date fixed for any regularly-scheduled payment of principal of, or interest or fees on, any such Loan or Commitment. The Company agrees that if amounts outstanding under this Agreement are due or unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of setoff in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Bank under this Agreement. The Company also agrees that each Participant shall be entitled to the benefits of subsections 2.18, 2.19, 2.20 and 9.5 with respect to its participation in the Commitment and the Loans outstanding from time to time; PROVIDED, that no Participant shall be entitled to receive any greater amount pursuant to such subsections than the transferor Bank would have been entitled to receive in respect of the amount of the participation transferred by the transferor Bank to such Participant had no such transfer occurred. (c) Any Bank may, in the ordinary course of its commercial banking business and in accordance with applicable law, at any time sell to any Bank or any Affiliate thereof and, with the consent of the Company and the Administrative Agent (which shall not be unreasonably withheld), to one or more additional banks or financial institutions ("PURCHASING BANKS") all or any part of its rights and obligations under this Agreement pursuant to a Commitment Transfer Supplement, substantially in the form of Exhibit C (a "COMMITMENT TRANSFER SUPPLEMENT"), executed by such Purchasing Bank and such transferor Bank (and, in the case of a Purchasing Bank that is not then a Bank or an Affiliate thereof, by the Company and the Administrative Agent) and delivered to the Administrative Agent for its acceptance and recording in the Register. The Company shall have no obligation to consent to a sale by a Bank to any Person that is not a bank or an Affiliate of a bank. Each such assignment shall be in a minimum amount of $15,000,000 (other than in the case of an assignment of all of a Bank's interests under this Agreement) and the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance, a Commitment Transfer Supplement, and the Transferor Bank or the Purchasing Bank, as agreed between them, shall deliver to the Administrative Agent a processing and recordation fee of $2,000. Each such assignment shall be ratable as among any Commitment and/or Revolving Credit Loans under this Agreement and the 364-Day Credit Agreement, if such agreement is in effect. After giving effect to any such assignment (other than an assignment of all of a Bank's interests under this Agreement), the assigning Bank (together with any Bank which is an Affiliate of such assigning Bank) shall retain Revolving Credit Loans and/or Commitments aggregating not less than $15,000,000. Upon such execution, delivery, acceptance and recording, from and after the Transfer Effective Date determined pursuant to such Commitment Transfer Supplement (the "TRANSFER EFFECTIVE 51 DATE"), (x) the Purchasing Bank thereunder shall be a party hereto and, to the extent provided in such Commitment Transfer Supplement, have the rights and obligations of a Bank hereunder with a Commitment as set forth therein, and (y) the transferor Bank thereunder shall, to the extent provided in such Commitment Transfer Supplement, be released from its obligations under this Agreement (and, in the case of a Commitment Transfer 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 hereto). Such Commitment Transfer Supplement shall be deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect the addition of such Purchasing Bank and the resulting adjustment of Commitment Percentages arising from the purchase by such Purchasing Bank of all or a portion of the rights and obligations of such transferor Bank under this Agreement. Notwithstanding any provision of this subsection 9.6, the consent of the Company shall not be required for any assignment which occurs at any time when any of the events described in Section 7(f) shall have occurred and be continuing. (d) The Administrative Agent shall maintain at its address referred to in subsection 9.2 a copy of each Commitment Transfer 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 constitute prima facie evidence of the items contained therein, and the Company, the Administrative Agent and the Banks shall treat each Person whose name is recorded in the Register as the owner of the Loan recorded therein for all purposes of this Agreement. The Register shall be available for inspection by the Company or any Bank at any reasonable time and from time to time upon reasonable prior notice. (e) Upon its receipt of a Commitment Transfer Supplement executed by a transferor Bank and Purchasing Bank (and, in the case of a Purchasing Bank that is not then a Bank or an Affiliate thereof, by the Company and the Administrative Agent), the Administrative Agent shall (i) promptly accept such Commitment Transfer Supplement and (ii) on the Transfer Effective Date determined pursuant thereto record the information contained therein in the Register and give notice of such acceptance and recordation to the Banks and the Company. (f) If, pursuant to this subsection, any interest in this Agreement is transferred to any Participant or Assignee (each, a "TRANSFEREE") which is organized under the laws of any jurisdiction other than the United States or any state thereof, the transferor Bank shall cause such Transferee, concurrently with the effectiveness of such transfer, (i) to represent to the transferor Bank (for the benefit of the transferor Bank and the Company) that under applicable law and treaties no taxes will be required to be withheld by the Company or the transferor Bank with respect to any payments to be made to such Transferee in respect of the Loans (except to the extent that such Transferee's assignor (if any) was entitled, at the time of assignment, to receive additional amounts from the Company with respect to Taxes pursuant to subsection 2.19(a)) and (ii) to furnish to the transferor Bank (and, in the case of any Assignee, to the Company) the forms and certificates required to be delivered pursuant to subsection 2.19(b). (g) Nothing herein shall prohibit any Bank from pledging or assigning all or any portion of its Loans to any Federal Reserve Bank in accordance with applicable law. 52 9.7 DISSEMINATION OF INFORMATION; CONFIDENTIALITY. (a) The Company authorizes each Bank to disclose to any Participant or Purchasing Bank or any other Person acquiring an interest in this Agreement by operation of law (each a "TRANSFEREE") and any prospective Transferee any and all information in such Bank's possession concerning the creditworthiness of the Company and its Subsidiaries, provided that such Transferee or prospective Transferee agrees to be bound by this subsection 9.7 with respect to such information as though such Transferee or prospective Transferee were a Bank hereunder. (b) Each Bank and each Transferee that receives information which is not publicly available and which has been identified by the Company as confidential ("PROPRIETARY INFORMATION") will be bound to treat such Proprietary Information in a confidential manner and to use such Proprietary Information only for the purpose of evaluating and monitoring the creditworthiness of the Company and its Subsidiaries in connection with such Bank's or such Transferee's extensions of credit pursuant to this Agreement or such Bank's or Transferee's other agreements with the Company, or as otherwise may be required by law, regulation or court order; PROVIDED, that if any Bank or Transferee shall be required to disclose any Proprietary Information by a court order (i) such Bank or Transferee shall, unless prohibited by applicable law, applicable regulation or the terms of the applicable court order, communicate such fact to the Administrative Agent and the Administrative Agent shall communicate such fact to the Company and (ii) such Bank or Transferee shall disclose only such Proprietary Information which it is requested to disclose or advised by counsel to disclose; PROVIDED, FURTHER, that any Bank or Transferee may disclose such information which it is requested to disclose or is advised by counsel to disclose to an auditor or examiner if it has advised such auditor or examiner that such information is confidential; PROVIDED, FURTHER, that any Bank or Transferee may disclose Proprietary Information (A) to Affiliates of such Bank or Transferee provided that such Affiliates agree to keep the Proprietary Information confidential as set forth herein, (B) with the written consent of the Company, (C) in connection with any litigation involving the Company and such Bank or Transferee, (D) to legal counsel to such Bank or Transferee if it advises such legal counsel that such information is confidential, (E) if such Proprietary Information was in the possession of such Bank or Transferee on a non-confidential basis prior to the Company furnishing it to such Bank or Transferee as shown by clear and convincing evidence, or (F) if such Proprietary Information is received by such Bank or Transferee, without restriction as to its disclosure or use, from a Person who, to such Bank's or Transferee's knowledge or reasonable belief, was not prohibited from disclosing it by any duty of confidentiality. 9.8 ADJUSTMENTS. (a) If any Bank (a "BENEFITTED BANK") shall at any time receive any payment of all or part of its Loans, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 7(f), or otherwise), in a greater proportion than any such payment to or collateral received by any other Bank, if any, in respect of such other Bank's Loans, or interest thereon, such benefitted Bank shall purchase for cash from the other Banks such portion of each such other Bank's Loan, or shall provide such other Banks with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such benefitted Bank to share the excess payment or benefits of such collateral or proceeds ratably with each of the Banks; PROVIDED, HOWEVER, that if all or any portion of such excess payment or benefits is thereafter recovered from such benefitted Bank, such purchase shall be rescinded, and the purchase price 53 and benefits returned, to the extent of such recovery, but without interest. Notwithstanding anything contained in this Agreement to the contrary, this subsection 9.8 shall only be applicable to (i) payments received by a Bank in respect of the obligations of the Company under this Agreement and (ii) collateral received from the Company, if any, to secure obligations of the Company under this Agreement. (b) In addition to any rights and remedies of the Banks provided by law, upon (i) the occurrence and during the continuance of an Event of Default, and (ii) the declaration by the Administrative Agent that the Loans are immediately due and payable pursuant to the last paragraph of Section 7, or the occurrence and continuance of an Event of Default specified in clause (i) or (ii) of paragraph (f) of Section 7, each Bank shall have the right, without prior notice to the Company, any such notice being expressly waived by the Company to the extent permitted by applicable law (but without waiving any notices specified in Section 7), upon any amount becoming due and payable by the Company hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether matured or unmatured, at any time held or owing by such Bank or any branch or agency thereof to or for the credit or the account of the Company. Each Bank agrees promptly to notify the Company and the Administrative Agent after any such set-off and application made by such Bank, PROVIDED that the failure to give such notice shall not affect the validity of such set-off and application. 9.9 COUNTERPARTS. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with the Company and the Administrative Agent. 9.10 SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 9.11 INTEGRATION. This Agreement represents the agreement of the Company, the Agents and the Banks with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Company, the Agents or any Bank relative to subject matter hereof not expressly set forth or referred to herein other than any agreements referred to in subsection 2.5(b). 9.12 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 54 9.13 SUBMISSION TO JURISDICTION; WAIVERS. The Company hereby irrevocably and unconditionally: (a) submits for itself and its property in any legal action or proceeding relating to this Agreement, or for recognition and enforcement of any judgement in respect thereof, to the non-exclusive general jurisdiction of the Courts of the State of New York, the courts of the United States for the Southern District of New York, and appellate courts from any thereof; (b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Company at its address set forth in subsection 9.2 or at such other address of which the Bank shall have been notified pursuant thereto; and (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction. 9.14 WAIVERS OF JURY TRIAL. THE COMPANY, THE AGENTS AND THE BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN. 55 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written. THE CIT GROUP, INC. By:/s/ GLENN A. VOTEK -------------------------------------------------- Name: Title: Executive Vice President & Treasurer THE CHASE MANHATTAN BANK, as Administrative Agent and as a Bank By:/s/ ROGER PARKER -------------------------------------------------- Name: Title: Vice President CHASE SECURITIES INC. as Arranger By:/s/ R. CRAIG TRACY ------------------------------------------------ Name: Title: Vice President BARCLAYS BANK PLC, as Syndication Agent and as a Bank By:/s/ DOUGLAS BERNEGGER -------------------------------------------------- Name: Title: Director BANK OF AMERICA, N.A., as Syndication Agent and as a Bank By:/s/ NELSON D. ALBRECHT -------------------------------------------------- Name: Title: Vice President CITIBANK, N.A. as Syndication Agent and as a Bank By:/s/ ROBERT B. GOLDSTEIN -------------------------------------------------- Name: Title: Managing Director DAI-ICHI KANGYO BANK, LIMITED as Syndication Agent and as a Bank By:/s/ NICHOLAS A. FIORE -------------------------------------------------- Name: Title: Assistant Vice President ABN AMRO BANK N.V. By:/s/ PARKER H. DOUGLAS -------------------------------------------------- Name: Title: Group Vice President By:/s/ NEIL R. STEIN -------------------------------------------------- Name: Title: Assistant Vice President DRESDNER BANK AG, NEW YORK BRANCH AND GRAND CAYMAN BRANCH By:/s/ J. CURTIN BEAUDOUIN -------------------------------------------------- Name: Title: First Vice President By:/s/ STEPHEN A. KOVACH -------------------------------------------------- Name: Title: Assistant Vice President FIRST UNION NATIONAL BANK By:/s/ JANE W. WORKMAN -------------------------------------------------- Name: Title: Senior Vice President LEHMAN COMMERCIAL PAPER INC. By:/s/ MICHELE SWANSON -------------------------------------------------- Name: Title: Authorized Signatory NATIONAL AUSTRALIA BANK LIMITED, A.C.N. 004044937 By:/s/ BILL SCHMID ------------------------------------------------ Name: Title: Vice President SOCIETE GENERALE BANK NY BRANCH By:/s/ CHARLES D. FISCHER, JR. -------------------------------------------------- Name: Title: Vice President UBS AG, STAMFORD BRANCH By:/s/ GREGORY RAUE -------------------------------------------------- Name: Title: Director By:/s/ WILFRED SAINT -------------------------------------------------- Name: Title: Associate Director WESTDEUTSCHE LANDESBANK GIROZENTRALE By:/s/ ALAN S. BOOKSPAN -------------------------------------------------- Name: Title: Director By:/s/ LEO G. KAPAKOS -------------------------------------------------- Name: Title: Associate Director BANK ONE, NA By:/s/ CORY M. HELFAND -------------------------------------------------- Name: Title: Vice President BANQUE NATIONALE DE PARIS By:/s/ VERONIQUE MARCUS -------------------------------------------------- Name: Title: Vice President By:/s/ PHIL TRUESDALE -------------------------------------------------- Name: Title: Vice President CREDIT SUISSE FIRST BOSTON By:/s/ JAY CHALL -------------------------------------------------- Name: Title: Director By:/s/ JAMES H. LEE -------------------------------------------------- Name: Title: Assistant Vice President DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN ISLANDS BRANCHES By:/s/ GAYMA Z. SHIVNARAIN -------------------------------------------------- Name: Title: Director By:/s/ SUZANNE R. KISSLING -------------------------------------------------- Name: Title: Managing Director REVOLVING COMMITMENT VEHICLE CORPORATION By: Morgan Guaranty Trust Company of New York, As Attorney-in-Fact for Revolving Commitment Vehicle Corporation By:/s/ DAVID P. WEINTROB ------------------------------------------------- Name: Title: Vice President CANADIAN IMPERIAL BANK OF COMMERCE By: /s/ Robert Mendeles --------------------------------------------------- Name: Title: Executive Director ROYAL BANK OF CANADA By:/s/ C.W. EVANS -------------------------------------------------- Name: Title: Senior Account Manager FLEET BANK, N.A. By:/s/ ROBERT T.P. STORER -------------------------------------------------- Name: Title: Senior Vice President MELLON BANK, N.A. By:/s/ DAVID B. WIRL -------------------------------------------------- Name: Title: Assistant Vice President HSBC BANK USA By: /s/ JOHAN SORENSSON ------------------------------------------------ Name: Title: Vice President LLOYDS TSB BANK PLC By:/s/ MICHAEL J. GILLIGAN -------------------------------------------------- Name: Title: Director, Financial Institutions, USA By:/s/ IAN DIMMOCK ------------------------------------------------- Name: Title: Vice President, Acquisition Finance THE BANK OF NEW YORK By:/s/ ERNEST FUNG -------------------------------------------------- Name: Title: Vice President TORONTO DOMINION (TEXAS), INC. By:/s/ ANN S. SLANIS -------------------------------------------------- Name: Title: Vice President COMERICA BANK By:/s/ JAMES R. GROSSETT -------------------------------------------------- Name: Title: First Vice President NORDDEUTSCHE LANDESBANK GIROZENTRALE NEW YORK BRANCH AND/OR CAYMAN ISLANDS BRANCH By:/s/ JOSEF HAAS -------------------------------------------------- Name: Title: Vice President By:/s/ STEPHEN K. HUNTER -------------------------------------------------- Name: Title: Senior Vice President SUNTRUST BANK By:/s/ W. DAVID WISDOM -------------------------------------------------- Name: Title: Vice President BANK OF MONTREAL By:/s/ BRIAN L. BANKE -------------------------------------------------- Name: Title: Director ALLFIRST BANK By:/s/ ROBERT M. BEAVER -------------------------------------------------- Name: Title: Vice President BANCA NAZIONALE DEL LAVORO S.P.A. - NEW YORK BRANCH By:/s/ FREDERIC W. HALL -------------------------------------------------- Name: Title: Vice President By:/s/ LEONARDO VALENTINI -------------------------------------------------- Name: Title: First Vice President BANCA MONTE DEI PASCHI DI SIENA S.P.A. By:/s/ GIULIO NATALICCHI -------------------------------------------------- Name: Title: Senior Vice President & General Manager By:/s/ BRIAN R. LANDY -------------------------------------------------- Name: Title: Vice President FIRST HAWAIIAN BANK By/s/ JEFFREY N. HIGASHI -------------------------------------------------- Name: Title: Assistant Vice President WELLS FARGO BANK, N.A. By:/s/ MICHAEL J. GIESE -------------------------------------------------- Name: Title: Assistant Vice President By:/s/ EDWARD J. MEYER, JR. -------------------------------------------------- Name: Title: Vice President ARAB BANK PLC By: /s/ NOFAL BARBER ------------------------------------------------ Name: Title: E.V.P. and Branch Manager BANCA DI ROMA By:/s/ WILLIAM J. FONTANA -------------------------------------------------- Name: Title: Vice President By:/s/ ALESSANDRO PAOLI -------------------------------------------------- Name: Title: Assistant Treasurer SUMMIT BANK By:/s/ MICHAEL P. THOMSON -------------------------------------------------- Name: Title: Vice President BANCA POPOLARE DI MILANO, NEW YORK BRANCH By:/s/ FULVIO MONTANARI -------------------------------------------------- Name: Title: First Vice President By:/s/ PATRICK F. DILLON -------------------------------------------------- Name: Title: Vice President EX-10.7 9 a2069484zex-10_7.txt EXHIBIT 10.7 EXHIBIT 10.7 ASSUMPTION AGREEMENT ASSUMPTION AGREEMENT dated as of June 1, 2001, made by THE CIT GROUP, INC. (formerly known as Tyco Acquisition Corp. XX (NV)), a Nevada corporation, ("CIT") and CIT HOLDINGS (NV) INC. (formerly known as Tyco Acquisition Corp. XIX (NV)), a Nevada corporation ("CIT HOLDINGS"), to the 5 YEAR CREDIT AGREEMENT, dated as of March 28, 2000 (the "CREDIT AGREEMENT"; unless otherwise defined herein, capitalized terms which are defined in the Credit Agreement are used herein as defined therein) among THE CIT GROUP, INC., a Delaware corporation (the "CIT DELAWARE"), the several banks and other financial institutions from time to time parties to the Credit Agreement (the "LENDERS"), JPMorgan, a division of CHASE SECURITIES INC., as sole arranger and bookrunner (in such capacity, the "ARRANGER"), BARCLAYS BANK PLC, BANK OF AMERICA, N.A., CITIBANK, N.A. and THE DAI-ICHI KANGYO BANK, LIMITED, as syndication agents (in such capacity, the "SYNDICATION AGENTS") and THE CHASE MANHATTAN BANK ("CHASE") (in such capacity, the "ADMINISTRATIVE AGENT"). W I T N E S S E T H WHEREAS, CIT Delaware, the Lenders, the Arranger, the Syndication Agents and the Administrative Agent are parties to the Credit Agreement pursuant to which Lenders have agreed to make certain loans and other extensions of credit to CIT Delaware; WHEREAS, effective as of the date hereof, CIT Delaware has merged into CIT Holdings pursuant to a Certificate of Merger filed with the Delaware Secretary of State on the date hereof and Articles of Merger filed with the Nevada Secretary of State on the date hereof (the "MERGER"); WHEREAS, immediately following the Merger CIT Holdings will transfer all of the assets owned by CIT Delaware immediately prior to the Merger, whether tangible or intangible, including, without limitation, any and all claims, judgments, contractual rights, causes of action and other rights, whether legal or equitable (the "ASSETS"), to CIT, and CIT will accept the contribution of the Assets and assume substantially all of the liabilities of CIT Delaware, whether fixed or contingent, liquidated or unliquidated, matured or unmatured, secured or unsecured (collectively, the "LIABILITIES"), in each case as the same shall exist immediately following the Merger (such assignment and assumption, the "TRANSFER"), pursuant to and in accordance with, the terms and conditions of the Contribution and Assumption Agreement (the "CONTRIBUTION AND ASSUMPTION AGREEMENT"); WHEREAS, pursuant to the terms of the Merger and applicable law, CIT Holdings succeeded to all of the rights and obligations of CIT Delaware, and pursuant to the Contribution and Assumption Agreement, CIT Holdings has transferred to CIT all such rights and CIT has assumed all such obligations; WHEREAS, pursuant to Section 6.2 of the Credit Agreement if CIT Delaware merges with or into another corporation or sells substantially all of its assets or property to another corporation, the surviving corporation and/or the purchaser of the property and assets shall expressly assume the obligations of the Company under the Credit Agreement and expressly agree to be bound by all other provisions applicable to the Company under the Credit Agreement; and WHEREAS, pursuant to this Assumption Agreement the parties wish to provide that CIT Holdings shall become the "Company" under the Credit Agreement by reason of the Merger and that, immediately thereafter, CIT shall become the "Company" by reason of the Transfer. NOW, THEREFORE, in consideration of the premises and the agreements herein, CIT LLC hereby agrees as follows: ARTICLE I ASSUMPTION AND RELEASE Section 1.1. ASSUMPTION AND SUBSTITUTION. (a) Pursuant to the Merger and this Assumption Agreement, CIT Holdings has expressly assumed, as its direct and primary obligation, the due and punctual performance and observance of all of the covenants and conditions to be performed or observed by CIT Delaware under the Credit Agreement, and has succeeded to, and has been substituted for, CIT Delaware, with the same effect as if CIT Holdings had been named in the Credit Agreement. (b) Pursuant to the Transfer and this Assumption Agreement, CIT has expressly assumed the due and punctual performance and observance of all the covenants and conditions to be performed or observed by CIT Holdings, as successor of CIT Delaware, under the Credit Agreement, and has succeeded to, and is substituted for, CIT Delaware and CIT Holdings, with the same effect as if CIT had been named in the Credit Agreement. ARTICLE II REPRESENTATIONS AND WARRANTIES Section 2.1. REPRESENTATIONS AND WARRANTIES OF CIT HOLDINGS. CIT Holdings hereby represents and warrants as follows: (a) CIT Holdings (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and (ii) has the power and authority to execute, deliver and perform this Assumption Agreement. (b) The execution, delivery and performance by CIT Holdings of this Assumption Agreement (i) have been duly authorized by all necessary company action, (ii) do not and will not contravene its articles of incorporation or bylaws, any material law or any material contractual restriction binding on or affecting CIT Holdings or any of its material properties and (iii) do not and will not result in or require the creation of any lien, security interest or other charge or encumbrance upon or with respect to any of its material properties. -2- (c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or other regulatory body is required for the due execution, delivery and performance by CIT Holdings of this Assumption Agreement or for its assumption of the obligations of CIT Delaware under the Credit Agreement. (d) This Assumption Agreement is, the legal, valid and binding obligation of CIT Holdings, enforceable against CIT Holdings in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). (e) No litigation, investigation or proceeding of or before any arbitrator or governmental authority or other regulatory body is pending or, to the knowledge of CIT Holdings, threatened by or against CIT Holdings with respect to this Assumption Agreement or any of the transactions contemplated hereby. (f) CIT Holdings was not, effective immediately following the Merger, in default in the performance of any covenant or condition in the Credit Agreement. Section 2.2. REPRESENTATIONS AND WARRANTIES OF CIT. CIT hereby represents and warrants as follows: (a) CIT (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and (ii) has the power and authority to assume the obligations of Corporation under the Credit Agreement and to execute, deliver and perform this Assumption Agreement. (b) The execution, delivery and performance by CIT of this Assumption Agreement and the assumption of the obligations of CIT Holdings under the Credit Agreement (i) have been duly authorized by all necessary company action, (ii) do not and will not contravene its articles of incorporation or bylaws, any material law or any material contractual restriction binding on or affecting CIT or any of its material properties and (iii) do not and will not result in or require the creation of any lien, security interest or other charge or encumbrance upon or with respect to any of its material properties. (c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or other regulatory body is required for the due execution, delivery and performance by CIT of this Assumption Agreement or for its assumption of the obligations of CIT Holdings under the Credit Agreement. (d) This Assumption Agreement is the legal, valid and binding obligation of CIT, enforceable against CIT in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). -3- (e) No litigation, investigation or proceeding of or before any arbitrator or governmental authority or other regulatory body is pending or, to the knowledge of CIT, threatened by or against CIT with respect to this Assumption Agreement or any of the transactions contemplated hereby. (f) CIT is not, effective immediately following the Transfer, in default in the performance of any covenant or condition in the Credit Agreement. ARTICLE III FURTHER ASSURANCES REQUIRED Section 3.1. DOCUMENTS. The Administrative Agent shall have received from CIT (a) the executed legal opinion of Lionel Sawyer & Collins, Nevada counsel to CIT, substantially in the form of Exhibit A-1 and (b) the executed legal opinion of the general counsel of CIT, substantially in the form of Exhibit A-2. Section 3.2. FURTHER ASSURANCES REQUIRED. At any time and from time to time, upon the Administrative Agent's request, CIT Holdings and CIT will promptly execute and deliver such documents and instruments and take such further actions as the Administrative Agent may reasonably request to effect the purposes of this Assumption Agreement, at their respective cost and expense. ARTICLE IV MISCELLANEOUS Section 4.1. MISCELLANEOUS. This Assumption Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. (b) This Assumption Agreement is effective in respect of CIT Holdings, as of the Merger and, in respect of CIT, as of the Transfer. [Rest of page left intentionally blank] -4- IN WITNESS WHEREOF, CIT Holdings and CIT have caused this Assumption Agreement to be executed by an officer thereunto duly authorized, as of the date first above written. CIT HOLDINGS (NV) INC., a Nevada corporation By: -------------------------------------- Name: Title: THE CIT GROUP, INC., a Nevada corporation By: -------------------------------------- Name: Glenn A. Votek Title: Executive Vice President and Treasurer -5- EX-10.8 10 a2069484zex-10_8.txt EXHIBIT 10.8 Exhibit 10.8 ADDITIONAL BANK AGREEMENT AGREEMENT, dated August 1, 2000, to the $3,670,000,000 5-Year Credit Agreement dated as of March 28, 2000 (as amended, supplemented or otherwise modified from time to time, the "5-YEAR CREDIT AGREEMENT") among THE CIT GROUP, INC., a Delaware corporation (the "COMPANY"), the several banks and other financial institutions from time to time parties thereto (the "BANKS"), CHASE SECURITIES INC., as sole arranger and book manager, BARCLAYS BANK PLC, BANK OF AMERICA, N.A., CITIBANK, N.A. and THE DAI-ICHI KANGYO BANK, LIMITED, as syndication agents and THE CHASE MANHATTAN BANK, as Administrative Agent (in such capacity, the "ADMINISTRATIVE AGENT"). W I T N E S S E T H: WHEREAS, the 5-Year Credit Agreement provides in subsection 2.1(c) thereof that any bank or financial institution, although not originally a party thereto, may become a party to the 5-Year Credit Agreement in accordance with the terms thereof by entering into a written agreement with the Company and the Administrative Agent in form and substance reasonably satisfactory to the Administrative Agent; and WHEREAS, Merrill Lynch Bank USA (the "ADDITIONAL BANK") was not an original party to the 5-Year Credit Agreement but now desires to become a party thereto; NOW, THEREFORE, the Additional Bank hereby agrees as follows: 1. The Additional Bank agrees to be bound by the provisions of the 5-Year Credit Agreement, and agrees that it shall become a Bank for all purposes of the 5-Year Credit Agreement to the same extent as if originally a party thereto, with a Commitment of $50,000,000. 2. The Additional Bank (a) represents and warrants that it is legally authorized to enter into this Agreement; (b) confirms that it has received a copy of the 5-Year Credit Agreement, together with copies of the financial statements delivered pursuant to subsection 3.1 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement; (c) agrees that it has made and will, independently and without reliance upon the Administrative Agent or any other Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the 5-Year Credit Agreement or any instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Administrative Agent to take such action as administrative agent on its behalf and to exercise such powers and discretion under the 5-Year Credit Agreement or any instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the provisions of the 5-Year Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the 5-Year Credit 2 Agreement are required to be performed by it as a Bank including, without limitation, its obligations pursuant to subsection 2.19 of the 5-Year Credit Agreement. 3. The Additional Bank's address for notices for the purposes of the 5-Year Credit Agreement is as follows: Merrill Lynch Bank USA 15 W. South Temple Suite 300 Salt Lake City, UT 84101 Attention: Kevin lmlay Telephone: (801) 526-8310 Telecopy: (801) 521-6466 4. This Agreement will become effective upon receipt by the Administrative Agent of(a) counterparts to this Agreement and (b) a favorable written opinion of counsel for the Company, addressed to the Banks, with respect to the matters set forth in paragraphs 2, 3 and 4 of Exhibit B-1 to the 5-Year Credit Agreement. 5. Terms defined in the 5-Year Credit Agreement shall have their defined meanings when used herein. IN WITNESS WHEREOF, the Additional Bank has caused this Agreement to be executed and delivered by a duly authorized officer on the date first above written. MERRILL LYNCH BANK USA By --------------------------------- Title: President Accepted this 1st day of August, 2000: THE CIT GROUP, INC. By /s/ Glenn A. Votek ------------------------------------- Title: GLENN A. VOTEK EXECUTIVE VICE PRESIDENT TREASURER 3 Accepted this 1st day of August, 2000: THE CHASE MANHATTAN BANK, as Administrative Agent By ------------------------------------- Title: Vice President EX-10.9 11 a2069484zex-10_9.txt EXHIBIT 10.9 Exhibit 10.9 EXECUTION COPY FIVE-YEAR $765,000,000 CREDIT AGREEMENT dated as of April 13, 1998 among AT&T Capital Corporation, as Borrower, Newcourt Credit Group Inc., and Newcourt Credit Group USA Inc., as Guarantors, and The Banks Party Hereto, and Morgan Guaranty Trust Company of New York, as Administrative Agent, and Canadian Imperial Bank of Commerce, as Syndication Agent and The Chase Manhattan Bank and Deutsche Bank AG, New York Branch, as Co-Documentation Agents - -------------------------------------------------------------------------------- J.P. Morgan Securities Inc. and CIBC Oppenheimer Corp. as Arrangers - -------------------------------------------------------------------------------- TABLE OF CONTENTS ---------- PAGE ---- ARTICLE 1 DEFINITIONS SECTION 1.01. DEFINITIONS ................................................. 1 SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS ......................... 13 SECTION 1.03. TYPES OF BORROWINGS ......................................... 14 SECTION 1.04. BASIS FOR RATINGS ........................................... 14 ARTICLE 2 THE CREDITS SECTION 2.01. COMMITMENTS TO LEND ......................................... 14 SECTION 2.02. NOTICE OF COMMITTED BORROWING ............................... 15 SECTION 2.03. NOTICE TO BANKS; FUNDING OF LOANS ........................... 15 SECTION 2.04. NOTES ....................................................... 16 SECTION 2.05. MATURITY OF LOANS; TERMINATION OF COMMITMENTS ............... 16 SECTION 2.06. INTEREST RATES .............................................. 17 SECTION 2.07. FACILITY FEES ............................................... 19 SECTION 2.08. OPTIONAL TERMINATION OR REDUCTION OF COMMITMENTS ............ 20 SECTION 2.09. METHOD OF ELECTING INTEREST RATES ........................... 20 SECTION 2.10. OPTIONAL PREPAYMENTS ........................................ 21 SECTION 2.11. GENERAL PROVISIONS AS TO PAYMENTS ........................... 22 SECTION 2.12. FUNDING LOSSES .............................................. 22 SECTION 2.13. COMPUTATION OF INTEREST AND FEES ............................ 23 SECTION 2.14. REGULATION D COMPENSATION ................................... 23 SECTION 2.15. JUDGMENT CURRENCY ........................................... 24 ARTICLE 3 CONDITIONS SECTION 3.01. EFFECTIVENESS ............................................... 24 SECTION 3.02. BORROWINGS .................................................. 26 ARTICLE 4 REPRESENTATIONS AND WARRANTIES SECTION 4.01. CORPORATE EXISTENCE AND POWER ............................... 27 SECTION 4.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO CONTRAVENTION ............................................... 27 PAGE ---- SECTION 4.03. BINDING EFFECT .............................................. 27 SECTION 4.04. FINANCIAL INFORMATION ....................................... 28 SECTION 4.05. LITIGATION .................................................. 28 SECTION 4.06. SUBSIDIARIES ................................................ 29 SECTION 4.07. NOT AN INVESTMENT COMPANY ................................... 29 SECTION 4.08. FULL DISCLOSURE ............................................. 29 SECTION 4.09. RANK OF DEBT ................................................ 29 SECTION 4.10. TAXES ....................................................... 29 ARTICLE 5 COVENANTS SECTION 5.01. INFORMATION ................................................. 30 SECTION 5.02. MAINTENANCE OF EXISTENCE .................................... 31 SECTION 5.03. INTEREST COVERAGE ........................................... 31 SECTION 5.04. DEBT ........................................................ 31 SECTION 5.05. MINIMUM CONSOLIDATED TANGIBLE NET WORTH ..................... 31 SECTION 5.06. RESTRICTED PAYMENTS ......................................... 32 SECTION 5.07. NEGATIVE PLEDGE ............................................. 32 SECTION 5.08. CONSOLIDATIONS, MERGERS AND SALES OF ASSETS ................. 34 SECTION 5.09. USE OF PROCEEDS ............................................. 36 SECTION 5.10. COMPLIANCE WITH LAWS ........................................ 36 SECTION 5.11. INSPECTION OF PROPERTY, BOOKS AND RECORDS ................... 36 SECTION 5.12. YEAR 2000 COMPATIBILITY ..................................... 36 SECTION 5.13. PARI PASSU .................................................. 37 ARTICLE 6 DEFAULTS SECTION 6.01. EVENTS OF DEFAULT ........................................... 37 SECTION 6.02. NOTICE OF DEFAULT ........................................... 39 SECTION 6.03. RESCISSION .................................................. 39 ARTICLE 7 THE AGENT SECTION 7.01. APPOINTMENT AND AUTHORIZATION ............................... 40 SECTION 7.02. AGENT AND AFFILIATES ........................................ 40 SECTION 7.03. ACTION BY AGENT ............................................. 40 SECTION 7.04. CONSULTATION WITH EXPERTS ................................... 40 SECTION 7.05. LIABILITY OF AGENT .......................................... 41 ii PAGE ---- SECTION 7.06. INDEMNIFICATION ............................................. 41 SECTION 7.07. CREDIT DECISION ............................................. 41 SECTION 7.08. SUCCESSOR AGENT ............................................. 41 SECTION 7.09. AGENT'S FEE ................................................. 42 SECTION 7.10. OTHER AGENTS ................................................ 42 ARTICLE 8 CHANGE IN CIRCUMSTANCES SECTION 8.01. BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR .... 42 SECTION 8.02. ILLEGALITY .................................................. 43 SECTION 8.03. INCREASED COST AND REDUCED RETURN ........................... 43 SECTION 8.04. TAXES ....................................................... 45 SECTION 8.05. BASE RATE LOANS SUBSTITUTED FOR AFFECTED EURO-DOLLAR LOANS ....................................................... 47 SECTION 8.06. SUBSTITUTION OF BANK ........................................ 48 SECTION 8.07. COMPENSATION ................................................ 48 ARTICLE 9 GUARANTY SECTION 9.01. THE GUARANTY ................................................ 49 SECTION 9.02. GUARANTY UNCONDITIONAL ...................................... 49 SECTION 9.03. DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN CERTAIN CIRCUMSTANCES ....................................... 50 SECTION 9.04. WAIVER BY THE GUARANTORS .................................... 50 SECTION 9.05. SUBROGATION AND CONTRIBUTION ................................ 50 SECTION 9.06. STAY OF ACCELERATION ........................................ 51 SECTION 9.07. RELEASE OF NEWCOURT USA AS GUARANTOR ........................ 51 SECTION 9.08. LIMITATION ON THE OBLIGATIONS ............................... 51 ARTICLE 10 MISCELLANEOUS SECTION 10.01. NOTICES .................................................... 51 SECTION 10.02. NO WAIVERS ................................................. 52 SECTION 10.03. EXPENSES; INDEMNIFICATION .................................. 52 SECTION 10.04. SHARING OF SET-OFFS ........................................ 52 SECTION 10.05. AMENDMENTS AND WAIVERS ..................................... 53 SECTION 10.06. SUCCESSORS AND ASSIGNS ..................................... 53 SECTION 10.07. COLLATERAL ................................................. 55 iii PAGE ---- SECTION 10.08. GOVERNING LAW; SUBMISSION TO JURISDICTION .................. 55 SECTION 10.09. COUNTERPARTS; INTEGRATION .................................. 56 SECTION 10.10. WAIVER OF JURY TRIAL ....................................... 57 SECTION 10.11. CONFIDENTIALITY ............................................ 57 Exhibit A - Note Exhibit B-1 - Opinion of Counsel for the Borrower Exhibit B-2 - Opinion of Counsel for Newcourt Exhibit B-3 - Opinion of General Counsel of Newcourt USA Exhibit C - Opinion of Special Counsel for the Agent Exhibit D - Assignment and Assumption Agreement Exhibit E - Terms of Subordination Exhibit F - Terms of Guaranty iv CREDIT AGREEMENT AGREEMENT dated as of April 13, 1998 among AT&T CAPITAL CORPORATION, NEWCOURT CREDIT GROUP INC., NEWCOURT CREDIT GROUP USA NC., the BANKS party hereto, MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent, CANADIAN IMPERIAL BANK OF COMMERCE, as Syndication Agent THE CHASE MANHATTAN BANK and DEUTSCHE BANK AG, NEW YORK BRANCH, as Co-Documentation Agents and J.P. MORGAN SECURITIES INC. and CIBC OPPENHEIMER CORP., as Arrangers. W I T N E S S E T H: WHEREAS, the Borrower (as defined below) has heretofore entered into a $800,000,000 Credit Agreement dated as of August 14, 1997 with the banks parties thereto and Morgan Guaranty Trust Company of New York, as agent for such banks (as in effect on the date hereof, the "Existing Credit Agreement"); and WHEREAS, the Borrower and the Guarantors (as defined below) wish to enter into this Agreement to replace the Existing Credit Agreement; and WHEREAS, upon the effectiveness of this Agreement in accordance with Section 3.01, the Existing Credit Agreement shall terminate; NOW, THEREFORE, the parties hereto agree as follows: ARTICLE 1 DEFINITIONS SECTION 1.01. DEFINITIONS. The following terms, as used herein, have the following meanings: "ACCOUNTS RECEIVABLE" means (i) any accounts receivable (whether or not earned by performance), chattel paper, instruments, documents, general intangibles, trade acceptances, any other rights to receive installment, rental or other payments for, or relating to amounts due or to become due on account of, equipment or goods sold or leased or to be sold or leased or services rendered or to be rendered or funds advanced or loaned or to be advanced or loaned and other rights to payment of any kind, (ii) any proceeds of any of the foregoing and (iii) any interest in any property or asset of any kind (whether of the obligor under such Accounts Receivable or any other Person) securing the payment of any item listed in clause (i) hereof "ACQUISITION" means the purchase by Newcourt on January 12, 1998 of all of the outstanding shares of common stock of the Borrower, alter which the Borrower shall be a direct or indirect wholly-owned subsidiary of Newcourt and Newcourt Holdings USA. "ADMINISTRATIVE QUESTIONNAIRE" means, with respect to each Bank, an administrative questionnaire in the form prepared by the Agent and submitted to the Agent (with a copy to the Borrower) duly completed by such Bank. "AGENT" means Morgan Guaranty Trust Company of New York in its capacity as administrative agent for the Banks hereunder, and its successors in such capacity. "AGREEMENT" means this Credit Agreement, as amended, supplemented or otherwise modified from time to time. "APPLICABLE LENDING OFFICE" means, respect to any Bank, (i) in the case of its Base Rate Loans, its Domestic Lending Office and (ii) in the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office. "APPLICABLE MARGIN" has the meaning set forth in Section 2.06(f). "ASSET DROP-DOWN" has the meaning set forth in Section 5.08. "ASSIGNEE" has the meaning set forth in Section 10.06(c). "AT&T CAPITAL CORPORATION" means AT&T Capital Corporation, a Delaware corporation, and its successors. "AT&T 364-DAY CREDIT AGREEMENT" means the $1,535,000,000 Credit Agreement dated as of April 13, 1998 among the Borrower, Newcourt, Newcourt USA, the banks party thereto, Morgan Guaranty Trust Company of New York, as Administrative Agent, Canadian Imperial Bank of Commerce, as Syndication Agent, and The Chase Manhattan Bank and Deutsche Bank AG, New York Branch, as Co-Documentation Agents, as amended, restated, modified or supplemented from time to time. "BANK" means each bank listed on the signature pages hereof; each Assignee which becomes a Bank pursuant to Section 8.06 or 10.06(c), and their respective successors. 2 "BASE RATE" means, for any day, a rate per annum equal to the higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal Funds Rate for such day. "BASE RATE LOAN" means (i) a Committed Loan which bears interest at the Base Rate pursuant to the applicable Notice of Committed Borrowing or Notice of Interest Rate Election or the provisions of Article 8 or (ii) an overdue amount which was a Base Rate Loan immediately before it became overdue. "BORROWER" means AT&T Capital Corporation, a Delaware corporation, and its successors. "BORROWER'S 1997 FORM 10-K" means the Borrower's annual report on Form 10-K for 1997, as filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. "BORROWING" has the meaning set forth in Section 1.03. "CO-DOCUMENTATION AGENTS" means The Chase Manhattan Bank and Deutsche Bank AG, New York Branch, each in its capacity as co-documentation agent for the Banks hereunder, and their successors in such capacity. "COMMITMENT" means, respect to each Bank, the amount set forth opposite the name of such Bank on the signature pages hereof, as such amount may be reduced from time to time pursuant to Section 2.08 or changed pursuant to Section 10.06(c). "COMMITTED LOAN" means a loan made by a Bank pursuant to Section 2.01; PROVIDED that, if any such loan or loans (or portions thereof) are combined or subdivided pursuant to a Notice of Interest Rate Election, the term "Committed Loan" shall refer to the combined principal amount resulting from such combination or to each of the separate principal amounts resulting from such subdivision, as the case may be. "CONSOLIDATED DEBT" means at any date the Debt of Newcourt and its Consolidated Subsidiaries of the type referred to in clauses (i), (ii), (iv) and (vii) of the definition of "DEBT", determined on a consolidated basis as of such date; PROVIDED, HOWEVER, that any recourse provided by any Person in connection with any sale, transfer or other disposition by such Person of Accounts Receivable or of any subsidiary of such Person substantially all the assets of which are Accounts Receivable which constitutes a "SALE" under GAAP (as in effect at the time of such sale, transfer or other disposition) shall not, in any event, constitute Consolidated Debt 3 "CONSOLIDATED EBIT" means, for any period, the sum of (i) Consolidated Net Income for such period PLUS (ii) to the extent deducted in determining such Consolidated Net Income, the sum of Consolidated Interest Expense and the provision for consolidated income tax for such period. "CONSOLIDATED INTEREST EXPENSE" means, for any period, the interest expense of Newcourt and its Consolidated Subsidiaries determined on a consolidated basis for such period. "CONSOLIDATED NET INCOME" means, for any period, the net income (loss) (calculated (a) before preferred and common stock dividends and (b) exclusive of the effect of any extraordinary or other material non-recurring gain or loss outside the ordinary course of business) of Newcourt and its Consolidated Subsidiaries, determined on a consolidated basis for such period. "CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or other entity (including a business trust) the accounts of which would be consolidated with those of Newcourt in its consolidated financial statements if such statements were prepared as of such date. "CONSOLIDATED TANGIBLE NET WORTH" means at any date the sum of (i) consolidated stockholders' equity of Newcourt and its Consolidated Subsidiaries, less their consolidated Intangible Assets plus (ii) the Permitted Additional Amount, all determined as of such date. "C$" means the lawful currency of Canada. "DEBT" of any Person means at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (iv) all obligations of such Person as lessee which are capitalized in accordance with GAAP, (v) all non-contingent obligations (and, for purposes of Section 5.07 and the definitions of Material Debt and Material Financial Obligations, all contingent obligations) of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit or similar instrument, (vi) all Debt (to the extent not otherwise included pursuant to the foregoing clauses) secured by a Lien on any asset of such Person, whether or not such Debt is otherwise an obligation of such Person, and (vii) all Debt (to the extent not otherwise included pursuant to the foregoing clauses) of others guaranteed by such Person. 4 "DEFAULT" means any condition or event which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default. "DERIVATIVES OBLIGATIONS" of any Person means all obligations of such Person in respect of any rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of the foregoing transactions) or any combination of the foregoing transactions. "DOLLARS" and "$" means the lawful currency of the United States. "DOMESTIC BUSINESS DAY" means any day except a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close. "DOMESTIC LENDING OFFICE" means, as to each Bank, its office located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Domestic Lending Office) or such other office as such Bank may hereafter designate as its Domestic Lending Office by notice to the Borrower and the Agent. "DROP-DOWN SUBSIDIARY" has the meaning set forth in Section 5.08. "EFFECTIVE DATE" means the date this Agreement becomes effective in accordance with Section 3.01. "ENVIRONMENTAL LAWS" means any and all federal, state, local and foreign statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions, permits, concessions, grants, franchises, licenses, agreements and other governmental restrictions relating to the environment or the effect of the environment on human health or to emissions, discharges or releases of pollutants, contaminants, Hazardous Substances or wastes into the environment, including (without limitation) ambient air, surface water, ground water or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, Hazardous Substances or wastes or the clean-up or other remediation thereof. 5 "EURO-DOLLAR BUSINESS DAY" means any Domestic Business Day on which commercial banks are open for international business (including dealings in dollar deposits) in London. "EURO-DOLLAR LENDING OFFICE" means, as to each Bank, its office, branch or affiliate located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Euro-Dollar Lending Office) or such other office, branch or affiliate of such Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice to the Borrower and the Agent "EURO-DOLLAR LOAN" means (i) a Committed Loan which bears interest at a Euro-Dollar Rate pursuant to the applicable Notice of Committed Borrowing or Notice of Interest Rate Election or (ii) an overdue amount which was a Euro-Dollar Loan immediately before it became overdue. "EURO-DOLLAR RATE" means a rate of interest determined pursuant to Section 2.06(b) on the basis of a London Interbank Offered Rate. "EURO-DOLLAR REFERENCE BANKS" means the principal London offices of Canadian Imperial Bank of Commerce, Morgan Guaranty Trust Company of New York, The Chase Manhattan Bank and Royal Bank of Canada "EURO-DOLLAR RESERVE PERCENTAGE" means for any day that percentage (expressed as a decimal) which is in effect on such day, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement for a member bank of the Federal Reserve System in New York City with deposits exceeding five billion Dollars in respect of "EUROCURRENCY LIABILITIES" (or in respect of any other category of liabilities which includes deposits by reference to which the interest rate on Euro-Dollar Loans is determined or any category of extensions of credit or other assets which includes loans by a non-United States office of any Bank to United States residents). "EVENT OF DEFAULT" has the meaning set forth in Section 6.01. "EXISTING AT&T 364-DAY CREDIT AGREEMENT" means the $1,200,000,000 Credit Agreement dated as of August 14, 1997 among the Borrower, the banks party thereto and Morgan Guaranty Trust Company of New York, as agent for such banks. "EXISTING NEWCOURT CREDIT AGREEMENT" means the Credit Agreement dated as of May 14,1997 among Newcourt, the banks party thereto and Canadian Imperial Bank of Commerce, as Agent as amended. 6 "EXISTING NEWCOURT USA CREDIT AGREEMENTS" means each of the 364-Day Credit Agreement dated as of May 14,1997 among Newcourt USA, the banks party thereto, Canadian Imperial Bank of Commerce, as Administrative Agent, Bank of America Illinois, as Syndication Agent and Deutsche Bank AG, New York Branch, as Documentation Agent and the Thee-Year Credit Agreement dated as of May 14, 1997 among Newcourt USA, the banks party thereto, Canadian Imperial Bank of Commerce, as Administrative Agent, Bank of America Illinois, as Syndication Agent and Deutsche Bank AG, New York Branch, as Documentation Agent, each as amended. "EXISTING CREDIT AGREEMENT" has the meaning set forth in the recitals hereto. "FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Domestic Business Day next succeeding such day, PROVIDED that (i) if such day is not a Domestic Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Domestic Business Day as so published on the next succeeding Domestic Business Day, and (ii) if no such rate is so published on such next succeeding Domestic Business Day, the Federal Funds Rate for such day shall be the average rate quoted to Morgan Guaranty Trust Company of New York on such day on such transactions as determined by the Agent. "GROUP" or "GROUP OF LOANS" means at any time a group of Loans consisting of(i) all Committed Loans which are Base Rate Loans at such time or (ii) all Committed Loans which are Euro-Dollar Loans having the same Interest Period at such time; PROVIDED that, if a Committed Loan of any particular Bank is converted to or made as a Base Rate Loan pursuant to Section 8.02 or 8.05, such Loan shall be included in the same Group or Groups of Loans from time to time as it would have been in if it had not been so converted or made. "GUARANTORS" means (i) each of Newcourt and (subject to Section 9.07) Newcourt USA and (ii) from and after the date that any Restricted Subsidiary is required to provide a guaranty pursuant to Section 5.13, such Restricted Subsidiary, and their respective successors. "HAZARDOUS SUBSTANCES" means any toxic, radioactive, caustic or otherwise hazardous substance, including petroleum, its derivatives and by-products and other hydrocarbons, or any substance having any constituent 7 elements displaying any of the foregoing characteristics, PROVIDED that the foregoing substances are regulated under the Environmental Laws. "INDEMNITEE" has the meaning set forth in Section 10.03(b). "INITIAL QUALIFYING PREFERRED SECURITIES" means the trust preferred securities issued by Capita Preferred Trust in the form substantially as described in the Prospectus dated as of August 30, 1996 contained in a Registration Statement filed prior to the date hereof with the Securities and Exchange Commission (which Registration Statement has not become effective as of the date hereof). "INTANGIBLE ASSETS" means the amount (to the extent reflected in determining consolidated stockholders' equity of Newcourt and its Consolidated Subsidiaries at any date) of(x) all write-ups (other than write-ups resulting from foreign currency translations and write-ups of assets of a going concern business made within twelve months after the acquisition of such business) subsequent to December 31, 1997 in the book value of any asset owned by Newcourt or a Consolidated Subsidiary and (y) all unamortized debt discount and expense, unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, anticipated future benefit of tax loss carry-forwards, copyrights, organization or developmental expenses and other intangible assets. "INTEREST PERIOD" means with respect to each Euro-Dollar Loan, a period commencing on the date of borrowing specified in the applicable Notice of Borrowing or on the date specified in the applicable Notice of Interest Rate Election and ending one, two, three or six months thereafter, as the Borrower may elect in the applicable notice; PROVIDED that: (a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall, subject to clause (c) below, be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Euro-Dollar Business Day; (b) any Interest Period which begins on the last Euro-Dollar Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c) below, end on the last Euro-Dollar Business Day of a calendar month, and (c) any Interest Period which would otherwise end after the Termination Date shall end on the Termination Date. 8 "INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as amended, or any successor statute. "LIEN" means any mortgage, pledge, security interest or lien. "LOAN" means a Base Rate Loan or a Euro-Dollar Loan and "LOANS" means Base Rate Loans or Euro-Dollar Loans or any combination of the foregoing. "LONDON INTERBANK OFFERED RATE" has the meaning set forth in Section 2.06(b). "MATERIAL ADVERSE EFFECT" means a material adverse effect on the consolidated financial position of Newcourt and its subsidiaries. "MATERIAL DEBT" means Debt (other than the Loans) of Newcourt and/or one or more of its Subsidiaries, arising in one or more related or unrelated transactions, in an aggregate principal or face amount exceeding $100,000,000 (or its equivalent in any other currency). "MATERIAL FINANCIAL OBLIGATIONS" means a principal or face amount of Debt and/or payment obligations in respect of Derivatives Obligations of Newcourt and/or one or more of its Subsidiaries, arising in one or more related or unrelated transactions, exceeding in the aggregate $100,000,000 (or its equivalent in any other currency). "MATERIAL SUBSIDIARY" means at any time each of Newcourt USA, Newcourt Holdings USA and the Borrower, and each subsidiary of Newcourt that is also a "significant subsidiary", as defined in Rule 1-02 of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended, as such Regulation is in effect on the date hereof "NEWCOURT" means Newcourt Credit Group Inc., an Ontario corporation, and its successors. "NEWCOURT AGREEMENTS" means each of this Agreement, the AT&T 364-Day Credit Agreement and the Newcourt Credit Agreement "NEWCOURT CREDIT AGREEMENT" means the C$1,200,000,000 Credit Agreement dated as of April 13, 1998 among Newcourt, Newcourt USA, AT&T Capital Corporation, the banks party thereto, Canadian Imperial Bank of Commerce, as Administrative Agent, Bank of Nova Scotia, as Syndication Agent, 9 and Royal Bank of Canada, as Documentation Agent, as amended, restated, supplemented or otherwise modified from time to time. "NEWCOURT HOLDINGS USA" means Newcourt Holdings USA, Inc., a Delaware corporation, and its successors. "NEWCOURT'S 1997 ANNUAL REPORT" means Newcourt's annual report for 1997, as filed with the Ontario Securities Commission and each of the securities regulatory authorities in each of the provinces of Canada. "NEWCOURT'S 1997 FORM 40-F" means Newcourt's annual report on Form 40-F for 1997, as filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. "NEWCOURT SENIOR OBLIGATIONS" means Newcourt's obligations under this Agreement, the AT&T 364-Day Credit Agreement and the Newcourt Credit Agreement. "NEWCOURT USA" means Newcourt Credit Group USA Inc., a Delaware corporation, and its successors. "Newcourt USA Debt" means the commercial paper debt expiring on May 13, 1998 of Newcourt USA outstanding as of the date of this Agreement. "NON-RECOURSE DEBT" of Newcourt, the Borrower or any Restricted Subsidiary means any indebtedness for borrowed money of Newcourt, the Borrower or any Restricted Subsidiary, as the case may be, which is secured by any Lien on or payable solely from the income and proceeds of any property (including, without limiting the generality of such term, any intangible assets), shares of stock, other equity interests or debt of Newcourt, the Borrower or such Restricted Subsidiary, as the case may be, and which is limited in recourse to the property, shares of stock, other equity interests or debt subject to such Lien and is not otherwise a general obligation of Newcourt, the Borrower or such Restricted Subsidiary, as the case may be. "NOTES" means promissory notes of the Borrower, substantially in the form of Exhibit A hereto, evidencing the obligation of the Borrower to repay the Loans, and "NOTE" means any one of such promissory notes issued hereunder. "NOTICE OF BORROWING" means a Notice of Committed Borrowing (as defined in Section 2.02). 10 "NOTICE OF INTEREST RATE ELECTION" has the meaning set forth in Section 2.09. "OBLIGORS" means the Guarantors and the Borrower, and Obligor means any one of the foregoing. "PARENT" means, with respect to any Bank, any Person controlling such Bank. "PARTICIPANT" has the meaning set forth in Section 10.06(b). "PERMITTED ADDITIONAL AMOUNT" means, at any date, the lesser of (i) (A) the sum, for each issue of Qualifying Preferred Securities, of the excess of(x) the amount of minority interests of Consolidated Subsidiaries not included in consolidated stockholders' equity of Newcourt, determined in accordance with GAAP, attributable to such Qualifying Preferred Securities MINUS (y) the aggregate principal or face amount of securities and other obligations (including guarantees) held by the issuer of such Qualifying Preferred Securities (or any intermediary issuer) other than (1) securities or other obligations (including guarantees) of any intermediary issuer (including those issued by Capita Preferred Funding L.P. to Capita Preferred Trust in the Initial Qualifying Preferred Securities) or (2) securities or other obligations (including guarantees) of Newcourt all payments in respect of which are fully subordinated (including in a bankruptcy, insolvency or similar proceeding) to the prior payment in full of all principal, interest, fees and any other amount payable under this Agreement PLUS (B) the aggregate outstanding principal amount of Subordinated Debt at such time and (ii) 30% of Consolidated Tangible Net Worth (determined after inclusion of the Permitted Additional Amount), each determined on such date. "PERSON" means an individual, a corporation, a partnership, an association, a limited liability company, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. "PRIME RATE" means the rate of interest publicly announced by Morgan Guaranty Trust Company of New York in New York City from time to time as its Prime Rate. "QUALIFYING PREFERRED SECURITIES" means (A) the Initial Qualifying Preferred Securities and (B) any preferred stock, limited partnership interests, preferred trust certificates or other preferred equity securities, issued for financing purposes by Newcourt or its Consolidated Subsidiaries and held by Persons other than Newcourt and its Consolidated Subsidiaries, and reasonably similar to the Initial Qualifying Preferred Securities, which securities (whether described in 11 clause (A) or clause (B)) neither have nor provide the holders thereof (nor any Person acting on their behalf) with (i) any required payments of the liquidation preference or other capital amount thereof or any mandatory redemption or rights of redemption, other than solely at the option of the issuer (other than an insolvency of the issuer), (ii) any right to enforce against assets held by the issuer thereof, whether upon a stated date or upon the happening of a default in payment or other contingency (other than an insolvency of the issuer), whether or not with the passage of time, or (iii) any conversion or rights to convert into any securities of the issuer or any other Person other than into common stock or other Qualifying Preferred Securities of such issuer, in any case prior to December 31,2003. "QUARTERLY DATE" means the last Euro-Dollar Business Day of each March, June, September and December. "REFERENCE BANKS" means the Euro-Dollar Reference Banks, and "REFERENCE BANK" means any one of such Reference Banks. "REGULATION U" means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time. "REQUIRED BANKS" means at any time Banks having at least 51% of the aggregate amount of the Commitments or, if the Commitments shall have been terminated, holding Notes evidencing at least 51% of the aggregate unpaid principal amount of the Loans. "RESTRICTED PAYMENT" means (i) any dividend or other distribution on any shares of Newcourt's capital stock, including, without limitation, preferred stock (except dividends payable solely in shares of such capital stock) or (ii) any payment on account of the purchase, redemption, retirement or acquisition of(a) any shares of Newcourt's capital stock, including, without limitation, preferred stock, or (b) any option, warrant or other right to acquire shares of Newcourt's capital stock, including, without limitation, preferred stock. "RESTRICTED SUBSIDIARY" means each Subsidiary of Newcourt that is organized under the laws of (i) Canada or any Province thereof or (ii) any State of the United States or the District of Columbia, and no substantial portion of the business of which is carried on outside of the United States and Canada PROVIDED that each Drop-Down Subsidiary shall be a Restricted Subsidiary. "SUBORDINATED DEBT" means Debt that is (i) Debt solely of Newcourt, (ii) not secured by a Lien on any assets of Newcourt or any of its Subsidiaries and (iii) made expressly subordinate and junior in right of payment to the payment by Newcourt of all of its obligations under the Newcourt Senior Obligations 12 ("SUPERIOR DEBT") on terms no less favorable to the holders of such Superior Debt than those set forth in Exhibit E. "SUBSIDIARY" means any corporation or other entity of which securities or other ownership interests (whether directly or indirectly in connection with contract rights) having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by Newcourt (or, if such term is used with reference to any other Person, by such other Person). "SYNDICATION AGENT" means Canadian Imperial Bank of Commerce, in its capacity as syndication agent for the Banks hereunder, and its successors in such capacity. "TERMINATION DATE" means April 13,2003, or if such day is not a Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day. "UNITED STATES" means the United States of America, including the States thereof and the District of Columbia, but excluding its territories and possessions. "UNSECURED DEBT" means all Debt of any Person that is not secured by a Lien on any asset of such Person. "VOTING POWER" means, respect to any outstanding capital stock of Newcourt, the power (expressed as a percentage) represented by such capital stock of the aggregate voting power of all outstanding shares of any class of capital stock of Newcourt having ordinary voting power, including the power to vote for election of the members of the Board of Directors (and, if any class thereof has power to designate members of the Board of Directors or any special committee thereoof, the power so to designate). SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with, and all references to generally accepted accounting principles shall refer to, accounting principles generally accepted in Canada as in effect from time to time (such principles, so applied, "GAAP"), applied on a basis consistent (except for changes made in consultation with Newcourt's independent public accountants) with the most recent audited consolidated financial statements of Newcourt and its Consolidated Subsidiaries delivered to the Banks; PROVIDED that, if Newcourt notifies the Agent that Newcourt wishes to amend any covenant in Article 5 to eliminate the effect of any change in generally accepted accounting principles on 13 the operation of such covenant (or if the Agent notifies Newcourt that the Required Banks wish to amend Article 5 for such purpose), then Newcourt's compliance with such covenant shall be determined on the basis of generally accepted accounting principles in effect immediately before the relevant change in generally accepted accounting principles became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to Newcourt and the Required Banks. SECTION 1.03. TYPES OF BORROWINGS. The term "BORROWING" denotes the aggregation of Loans of one or more Banks to be made to the Borrower pursuant to Article 2 on the same date, all of which Loans are of the same type (subject to Article 8) and, except in the case of Base Rate Loans, have the same Interest Period or initial Interest Period. Borrowings are classified for purposes of this Agreement either by reference to the pricing of Loans comprising such Borrowing (E.G., a "Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar Loans) or by reference to the provisions of Article 2 under which participation therein is determined (I.E., a "COMMITTED BORROWING" is a Borrowing under Section 2.01 in which all Banks participate in proportion to their Commitments). SECTION 1.04. BASIS FOR RATINGS. The credit ratings to be utilized in the determination of a Status are the ratings assigned to unsecured senior obligations of the Rated Issuer, without third party credit support. Ratings assigned to any obligation which is secured or which has the benefit of third party credit support shall be disregarded. ARTICLE 2 THE CREDITS SECTION 2.01. COMMITMENTS TO LEND. Each Bank severally agrees, on the terms and conditions set forth in this Agreement, to make loans to the Borrower pursuant to this Section from time to time on and alter the Effective Date and prior to the Termination Date in amounts such that the aggregate principal amount of Committed Loans by such Bank at any one time outstanding shall not exceed the amount of its Commitment. Each Borrowing under this Section shall be in an aggregate principal amount of $50,000,000 or any larger multiple of $5,000,000 (except that any such Borrowing may be in the aggregate amount available in accordance with Section 3.02(b)) and shall be made from the several Banks ratably in proportion to their respective Commitments. Within the foregoing limits, the Borrower may borrow under this Section, prepay Loans to the extent permitted by Section 2.10, and reborrow at any time prior to the Termination Date. 14 SECTION 2.02. NOTICE OF COMMITTED BORROWING. The Borrower shall give the Agent notice (a "NOTICE OF COMMITTED BORROWING") not later than 10:30 A.M. (New York City time) on (x) the date of each Base Rate Borrowing and (y) the third Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying: (a) the date of such Borrowing, which shall be a Domestic Business Day in the case of a Base Rate Borrowing or a Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing, (b) the aggregate amount of such Borrowing, (c) whether the Loans comprising such Borrowing are to bear interest initially at the Base Rate or a Euro-Dollar Rate, and (d) in the case of a Euro-Dollar Borrowing, the duration of the initial Interest Period applicable thereto, subject to the provisions of the definition of Interest Period. SECTION 2.03. NOTICE TO BANKS; FUNDING OF LOANS. (a) Upon receipt of a Notice of Borrowing, the Agent shall promptly notify each Bank of the contents thereof and of such Bank's share (if any) of such Borrowing and such Notice of Borrowing shall not thereafter be revocable by the Borrower. (b) Not later than 12:00 Noon (New York City time) on the date of each Borrowing, each Bank participating therein shall make available its share of such Borrowing, in Federal or other funds immediately available in New York City, to the Agent at its address referred to in Section 10.01. Unless the Agent determines that any applicable condition specified in Article 3 has not been satisfied, the Agent will make the funds so received from the Banks available to the Borrower. by 3:00 P.M. (New York City time) on the date of such Borrowing at the Agent's aforesaid address. (c) Unless the Agent shall have received notice from a Bank prior to the date of any Borrowing that such Bank will not make available to the Agent such Bank's share of such Borrowing, the Agent may assume that such Bank has made such share available to the Agent on the date of such Borrowing in accordance with subsection (b) of this Section 2.03 and the Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Bank shall not have so made such share available to the Agent, such Bank and the Borrower severally agree to repay to the Agent forthwith on demand such corresponding amount together with interest thereon, for 15 each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Agent, at (i) in the case of the Borrower, a rate per annum equal to the higher of the Federal Funds Rate and the interest rate applicable thereto pursuant to Section 2.06 and (ii) in the case of such Bank, the Federal Funds Rate. If such Bank shall repay to the Agent such corresponding amount, such amount so repaid shall constitute such Bank's Loan included in such Borrowing for purposes of this Agreement. SECTION 2.04. NOTES. (a) The Loans of each Bank shall be evidenced by a single Note payable to the order of such Bank for the account of its Applicable Lending Office in an amount equal to the aggregate unpaid principal amount of such Bank's Loans. (b) Each Bank may, by notice to the Borrower and the Agent, request that its Loans of a particular type be evidenced by a separate Note in an amount equal to the aggregate unpaid principal amount of such Loans. Each such Note shall be in substantially the form of Exhibit A hereto with appropriate modifications to reflect the fact that it evidences solely Loans of the relevant type. Each reference in this Agreement to the "NOTE" of such Bank shall be deemed to refer to and include any or all of such Notes, as the context may require. (c) Upon receipt of each Bank's Note pursuant to Section 3.0 1(b). the Agent shall forward such Note to such Bank. Each Bank shall record the date, amount and type of each Loan made by it and the date and amount of each payment of principal made by the Borrower with respect thereto, and may, if such Bank so elects in connection with any transfer or enforcement of its Note, endorse on the schedule forming a part thereof appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding; PROVIDED that the failure of any Bank to make any such recordation or endorsement or any error in making the same shall not affect the obligations of the Borrower hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the Borrower so to endorse its Note and to attach to and make a part of its Note a continuation of any such schedule as and when required. SECTION 2.05. MATURITY OF LOANS; TERMINATION OF COMMITMENTS. The Commitments shall terminate on the Termination Date, and all Committed Loans shall mature, and the principal amount thereof shall be due and payable, on such date. SECTION 2.06. INTEREST RATES. (a) Each Base Rate Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is made until it becomes due, at a rate per annum equal to the Base Rate for such day. Such interest shall be payable quarterly in arrears on each Quarterly Date and 16 on the Termination Date, and, with respect to the principal amount of any Base Rate Loan converted to a Euro-Dollar Loan, on each date a Base Rate Loan is so converted. Any overdue principal of or interest on any Base Rate Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the sum of 1% plus the rate otherwise applicable to Base Rate Loans for such day. (b) Each Euro-Dollar Loan shall bear interest on the outstanding principal amount thereof, for each day during each Interest Period applicable thereto, at a rate per annum equal to the sum of the Applicable Margin for such day plus the London Interbank Offered Rate applicable to such Interest Period. Such interest shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than three months, at intervals of three months after the first day thereof. The "LONDON INTERBANK OFFERED RATE" applicable to any Interest Period means a rate of interest determined by the Agent on the basis of at least two offered rates for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on the Reuters Screen LIBO Page as of 11:00 A.M. (London time) on the day that is two Euro-Dollar Business Days prior to the first day of such Interest Period. If at least two such offered rates appear on the Reuters Screen LIBO Page, the rate with respect to each Interest Period will be the arithmetic average (rounded upwards to the next 1/16th of 1%) of such offered rates. If fewer than two offered rates appear, the "LONDON INTERBANK OFFERED RATE" in respect of any Interest Period will be the average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the respective rates per annum at which deposits in Dollars are offered to each of the Euro-Dollar Reference Banks in the London interbank market at approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before the first day of such Interest Period in an amount approximately equal to the principal amount of the Euro-Dollar Loan of such Euro-Dollar Reference Bank to which such Interest Period is to apply and for a period of time comparable to such Interest Period. (c) Any overdue principal of or interest on any Euro-Dollar Loan shall bear interest, payable on demand, for each day from and including the date payment thereof was due to but excluding the date of actual payment, at a rate per annum equal to the sum of 1% plus the rate applicable to Base Rate Loans for such day. (d) The Agent shall determine each interest rate applicable to the Loans hereunder. The Agent shall give prompt notice to the Borrower and the participating Banks of each rate of interest so determined, and its determination thereof shall be conclusive in the absence of manifest error. 17 (e) Each Reference Bank agrees to use its best efforts to furnish quotations to the Agent as contemplated by this Section. If any Reference Bank does not furnish a timely quotation necessary to determine an interest rate m accordance with this Section, the Agent shall determine the relevant interest rate on the basis of the quotation or quotations furnished by the remaining Reference Bank or Banks or, if none of such quotations is available on a timely basis, the provisions of Section 8.01 shall apply. (f) The "APPLICABLE MARGIN" with respect to any Euro-Dollar Loan at any date is the applicable percentage amount set forth in the table below based on the Status and Usage on such date.
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V LEVEL VI STATUS STATUS STATUS STATUS STATUS STATUS ------- -------- --------- -------- ------- -------- Euro-Dollar Loans Usage less than or equal to 50% 0.210% 0.225% 0.265% 0.280% 0.350% 0.425% Usage greater than 50% 0.260% 0.275% 0.315% 0.330% 0.400% 0.475%
"D&P" means Duff & Phelps Credit Rating Co. or any successor rating agency acceptable to the Required Banks and the Borrower. "LEVEL I STATUS" exists at any date if, at such date, the Rated Issuer's senior unsecured long-term debt is rated A/A2 or higher by at least two Rating Agencies. "LEVEL II STATUS" exists at any date if, at such date, (a) the Rated Issuer's senior unsecured long-term debt is rated A-/A3 or higher by at least two Rating Agencies AND (b) Level I Status does not exist. "LEVEL III STATUS" exists at any date if, at such date, (a) the Rated Issuer's senior unsecured long-term debt is rated BBB+/Baa1 or higher by at least two Rating Agencies AND (b) neither Level I Status nor Level II Status exists. "LEVEL IV STATUS" exists at any date if, at such date, (a) the Rated Issuer's senior unsecured long-term debt is rated BBB/Baa2 or higher by at least two Rating Agencies AND (b) none of Level I Status through Level Ill Status exists. "LEVEL V STATUS" exists at any date if, at such date, (a) the Rated Issuer's senior unsecured long-term debt is rated BBB-/Baa3 or higher by at least two Rating Agencies AND (b) none of Level I Status through Level IV Status exists. "LEVEL VI STATUS" exists at any date if, at such date, none of Level I Status through Level V Status exists. 18 "MOODY'S" means Moody's Investors Service, Inc. or any successor rating agency acceptable to the Required Banks and the Borrower. "RATED ISSUER" means Newcourt; PROVIDED that if Newcourt is not rated by all three Rating Agencies, "RATED ISSUER" means the Borrower. "RATING AGENCIES" means D&P, Moody's and S&P. "S&P" means Standard & Poor's Ratings Services or any successor rating agency acceptable to the required Banks and the Borrower. "STATUS" means, at any date, whichever of Level I Status, Level II Status, Level III Status, Level IV Status, Level V Status or Level VI Status exists at such date. "USAGE" means at any date the percentage equivalent of a fraction (i) the numerator of which is the aggregate outstanding principal amount of the Loans at such date, after giving effect to any borrowing or payment on such date, and (ii) the denominator of which is the aggregate amount of the Commitments at such date. If for any reason any Loans remain outstanding after termination of the Commitments, the Usage for each date on or after the date of such termination shall be deemed to be greater than 50%. The rating in effect at any date is that in effect at the close of business on such date. If the Rated Issuer has more than two ratings that are not equivalent, the lower of the highest two ratings will apply. SECTION 2.07. FACILITY FEES. The Borrower shall pay to the Agent for the account of the Banks ratably a facility fee at the Facility Fee Rate. Such facility fee shall accrue from and including the Effective Date to but excluding the Termination Date (or earlier date of termination of the Commitments in their entirety), on the daily aggregate amount of the Commitments (whether used or unused). Accrued facility fees shall be payable quarterly on each Quarterly Date and upon the date of termination of the Commitments in their entirety. The "FACILITY FEE RATE" at any date is: (i) 0.090% if Level I Status exists AT such date, (ii) 0.100% if Level II Status exists at such date, (iii) 0.110% if Level III Status exists at such date, (iv) 0.120% if Level IV Status exists at such date, (v) 0.150% if Level V Status exists at such date and (vi) 0.200% if Level VI Status exists at such date. SECTION 2.08. OPTIONAL TERMINATION OR REDUCTION OF COMMITMENTS. The Borrower may, upon AT least three Domestic Business Days' notice to the Agent, 19 (i) terminate the Commitments at any time, if no Loans are outstanding at such time, or (ii) ratably reduce from time to time by an aggregate amount of $25,000,000 or any larger multiple of $5,000,000, the aggregate amount of the Commitments in excess of the aggregate outstanding principal amount of the Loans. The Agent shall promptly notify each Bank of any such notice received by the Agent. SECTION 2.09. METHOD OF ELECTING INTEREST RATES. (a) The Loans included in each Committed Borrowing shall bear interest initially at the type of rate specified by the Borrower in the applicable Notice of Committed Borrowing. Thereafter, the Borrower may from time to time elect to change or continue the type of interest rate borne by each Group of Loans (subject in each case to the provisions of Article 8), as follows: (i) if such Loans are Base Rate Loans, the Borrower may elect to convert such Loans to Euro-Dollar Loans as of any Euro-Dollar Business Day; and (ii) if such Loans are Euro-Dollar Loans, the Borrower may elect to convert such Loans to Base Rate Loans or elect to continue such Loans as Euro-Dollar Loans for an additional Interest Period, in each case effective on the last day of the then current Interest Period applicable to such Loans. Each such election shall be made by delivering a notice (a "NOTICE OF INTEREST RATE ELECTION") to the Agent at least three Euro-Dollar Business Days before the conversion or continuation selected in such notice is to be effective. A Notice of Interest Rate Election may, if it so specifies, apply to only a portion of the aggregate principal amount of the relevant Group of Loans; PROVIDED that (i) such portion is allocated ratably among the Loans comprising such Group and (ii) the portion to which such notice applies, and the remaining portion to which it does not apply, are each $50,000,000 or any larger multiple of $5,000,000. (b) Each Notice of Interest Rate Election shall specify: (i) the Group of Loans (or portion thereof) to which such notice applies; (ii) the date on which the conversion or continuation selected in such notice is to be effective, which shall comply with the applicable clause of subsection (a) above; 20 (iii) if the Loans comprising such Group are to be convened, the new type of Loans and, if such new Loans are Euro-Dollar Loans, the duration of the initial Interest Period applicable thereto; and (iv) if such Loans are to be continued as Euro-Dollar Loans for an additional Interest Period, the duration of such additional Interest Period. Each Interest Period specified in a Notice of Interest Rate Election shall comply with the provisions of the definition of Interest Period. (c) Upon receipt of a Notice of Interest Rate Election from the Borrower pursuant to subsection (a) above, the Agent shall promptly notify each Bank of the contents thereof and such notice shall not thereafter be revocable by the Borrower. If the Borrower fails to deliver a timely Notice of Interest Rate Election to the Agent for any Group of Euro-Dollar Loans, such Loans shall be convened into Base Rate Loans on the last day of the then current Interest Period applicable thereto. SECTION 2.10. OPTIONAL PREPAYMENTS. (a) The Borrower may, upon at least one Domestic Business Day's notice to the Agent, prepay the Group of Base Rate Loans in whole at any time, or from time to time in part in amounts aggregating $50,000,000 or any larger multiple of $5,000,000, by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment. Each such optional prepayment shall be applied to prepay ratably the Loans of the several Banks included in such Group or Borrowing. (b) The Borrower may, upon at least three Euro-Dollar Business Days' notice to the Agent, in the case of a Group of Euro-Dollar Loans, prepay the Loans comprising such a Group on the last day of any Interest Period applicable to such Group, in whole at any time, or from time to time in part in amounts aggregating $50,000,000 or any larger multiple of $5,000,000, by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment. Each such optional prepayment shall be applied to prepay ratably the Loans of the several Banks included in such Group. (c) Upon receipt of a notice of prepayment pursuant to this Section, the Agent shall promptly notify each Bank of the contents thereof and of such Bank's ratable share (if any) of such prepayment and such notice shall not thereafter be revocable by the Borrower. SECTION 2.11. GENERAL PROVISIONS AS TO PAYMENTS. (a) The Borrower shall make each payment of principal of, and interest on, the Loans and of fees hereunder, not later than 12:00 Noon (New York City time) on the date when due, 21 in Federal or other funds immediately available in New York City, to the Agent at its address referred to in Section 10.01. The Agent will promptly distribute to each Bank its ratable share of each such payment received by the Agent for the account of the Banks. Whenever any payment of principal of, or interest on, the Base Rate Loans or of fees shall be due on a day which is not a Domestic Business Day, the date for payment thereof shall be extended to the next succeeding Domestic Business Day. Whenever any payment of principal of, or interest on, the Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business Day, the date for payment thereof shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case the date for payment thereof shall be the next preceding Euro-Dollar Business Day. If the date for any payment of principal is extended pursuant to this Agreement or by operation of law or otherwise, interest thereon shall be payable for such extended time. (b) Unless the Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Banks hereunder that the Borrower will not make such payment in full, the Agent may assume that the Borrower has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to each Bank on such due date an amount equal to the amount then due such Bank. If and to the extent that the Borrower shall not have so made such payment, each Bank shall repay to the Agent forthwith on demand such amount distributed to such Bank together with interest thereon, for each day from the date such amount is distributed to such Bank until the date such Bank repays such amount to the Agent, at the Federal Funds Rate. SECTION 2.12. FUNDING LOSSES. If the Borrower makes any payment of principal with respect to any Euro-Dollar Loan or any Euro-Dollar Loan is converted to a Base Rate Loan (pursuant to Article 6 or 8 or otherwise) on any day prior to the last day of an Interest Period applicable thereto, or if the Borrower fails to borrow, continue, convert or prepay any Euro-Dollar Loans after notice has been given to any Bank in accordance with Section 2.03(a), 2.09(c) or 2.10(c), the Borrower shall reimburse each Bank as provided in the following paragraph for any resulting loss or expense incurred by it (or by a Participant in the related Loan), including (without limitation) any loss incurred in obtaining, liquidating or employing deposits from third parties, but excluding loss of the Applicable Margin or any other margin for the period after any such payment or conversion or failure to borrow or prepay. A certificate of each Bank setting forth such amount or amounts (including the computation of such amount or amounts) as shall be necessary to compensate such Bank or a Participant for the out-of-pocket expenses incurred by such Bank or 22 such Participant shall be delivered to the Borrower and such amount or amounts may be reviewed by the Borrower. If the Borrower, after receipt of any such certificate from such Bank, disagrees in good faith with such Bank on the computation of the amount or amounts owed to such Bank pursuant to this Section 2.12, such Bank and the Borrower shall negotiate in good faith to promptly resolve such disagreement. Any payment required to be paid to such Bank pursuant to this Section 2.12 shall be paid within 30 days after demand is made therefor (or if there is a disagreement, after such disagreement is resolved). Each Bank shall have a duty to mitigate the damages to such Bank that may arise as a consequence of such funding losses described above to the extent that such mitigation will not, in the judgment of such Bank, entail any cost or disadvantage to such Bank that such Bank is not reimbursed or compensated for by the Borrower. SECTION 2.13. COMPUTATION OF INTEREST AND FEES. Interest based on the Prime Rate hereunder shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and paid for the actual number of days elapsed (including the first day but excluding the last day). All other interest and fees shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day). SECTION 2.14. REGULATION D COMPENSATION. For so long as any Bank maintains reserves against "EUROCURRENCY LIABILITIES" (or any other category of liabilities which includes deposits by reference to which the interest rate on Euro-Dollar Loans is determined or any category of extensions of credit or other assets which includes loans by a non-United States office of such Bank to United States residents), and as a result the cost to such Bank (or its Applicable Lending Office) of making or maintaining its Euro-Dollar Loans is increased, then such Bank may require the Borrower to pay, contemporaneously with each payment of interest on the Euro-Dollar Loans, additional interest on the related Euro-Dollar Loan of such Bank at a rate per annum up to but not exceeding the excess of(i)(A) the applicable London Interbank Offered Rate divided by (B) one MINUS the Euro-Dollar Reserve Percentage over (ii) the rate specified in clause (i)(A). Any Bank wishing to require payment of such additional interest (x) shall so notify the Borrower, in which case such additional interest on the Euro-Dollar Loans of such Bank shall be payable to such Bank at the rate and place indicated in such notice with respect to each Interest Period commencing at least three Euro-Dollar Business Days after the giving of such notice and (y) shall furnish to the Borrower at least five Euro-Dollar Business Days prior to each date on which interest is payable on the Euro-Dollar Loans an officers' certificate setting forth the amount to which such Bank is then entitled under this Section 2.14 (which shall be consistent with such Bank's good faith estimate of the level at which the related reserves are maintained by it). 23 SECTION 2.15. JUDGMENT CURRENCY. If for the purpose of obtaining judgment in any court it is necessary to convert a sum due from the Borrower or any Guarantor hereunder or under any Note into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Agent could purchase Dollars with such other currency at the Agent's New York office on the Domestic Business Day preceding that on which final judgment is given. The obligations of the Borrower and each Guarantor in respect of any sum due to any Bank or the Agent hereunder or under any Note shall, notwithstanding any judgment in a currency other than Dollars, be discharged only to the extent that, on the Domestic Business Day following receipt by such Bank or the Agent (as the case may be) of any sum adjudged to be so due in such other currency, such Bank or the Agent (as the case may be) may in accordance with normal banking procedures purchase Dollars with such other currency. If the amount of Dollars so purchased is less than the sum originally due to such Bank or the Agent, as the case may be, in Dollars, the Borrower and each Guarantor agrees, to the fullest extent that it may effectively do so, as a separate obligation and notwithstanding any such judgment, to indemnify such Bank or the Agent, as the case may be, against such loss. If the amount of Dollars so purchased exceeds (a) the sum originally due to any Bank or the Agent, as the case may be, and (b) any amounts shared with other Banks as a result of allocations of such excess as a disproportionate payment to such Bank under Section 10.04, such Bank or the Agent, as the case may be, agrees to remit such excess to the Borrower or the appropriate Guarantor, as the case may be. ARTICLE 3 CONDITIONS SECTION 3.01. EFFECTIVENESS. This Agreement shall become effective on the date that each of the following conditions shall have been satisfied (or waived in accordance with Section 10.05): (a) receipt by the Agent of counterparts hereof signed by each of the parties hereto (or, in the case of any party as to which an executed counterpart shall not have been received, receipt by the Agent in form satisfactory to it of telegraphic, telex, facsimile transmission or other written confirmation from such party of execution of a counterpart hereof by such party); 24 (b) receipt by the Agent of a duly executed Note for the account of each Bank dated on or before the Effective Date complying with the provisions of Section 2.04; (c) receipt by the Agent of evidence satisfactory to it that no loans are outstanding under the Existing Credit Agreement; (d) receipt by the Agent of an opinion of(i) the General Counsel or any Assistant General Counsel of the Borrower, substantially in the form of Exhibit B-l hereto, (ii) the General Counsel or any Assistant General Counsel of Newcourt, substantially in the form of Exhibit B-2 hereto and (iii) the General Counsel or any Assistant General Counsel of Newcourt USA, substantially in the form of Exhibit B-3 hereto; (e) receipt by the Agent of an opinion of Davis Polk & Wardwell, special counsel for the Agent, substantially in the form of Exhibit C hereto; (f) receipt by the Agent of evidence satisfactory to it that the AT&T 364-Day Credit Agreement and the Newcourt Credit Agreement are closing concurrently with this Agreement; (g) receipt by the Agent of evidence satisfactory to it that the commitments under each of the Existing Credit Agreement, the Existing AT&T 364-Day Credit Agreement, the Existing Newcourt Credit Agreement and the Existing Newcourt USA Credit Agreements have been terminated and that the principal and interest on all loans and accrued fees outstanding thereunder have been repaid in full; (h) receipt by the Agent of the financial statements and PRO FORMA financial statements referred to in Section 4.04(a), (b) and (c); and (i) receipt by the Agent of all documents the Agent may reasonably request relating to the existence of each Obligor, the corporate authority for and the validity of this Agreement and the Notes, and any other matters relevant hereto, all in form and substance satisfactory to the Agent; PROVIDED that this Agreement shall not become effective or be binding on any party hereto unless all of the foregoing conditions are satisfied not later than April 24, 1998. The Agent shall promptly notify the Borrower and the Banks of the Effective Date, and such notice shall be conclusive and binding on all parties hereto. The Banks that are parties to the Existing Credit Agreement, comprising the "REQUIRED BANKS" as defined therein, and the Borrower agree that the 25 commitments under the Existing Credit Agreement shall terminate in their entirety simultaneously with and subject to the effectiveness of this Agreement and that the Borrower shall be obligated to pay on the Effective Date the accrued facility fees thereunder to but excluding the date of such effectiveness. SECTION 3.02. BORROWINGS. The obligation of any Bank to make a Loan on the occasion of any Borrowing is subject to the satisfaction of the following conditions: (a) receipt by the Agent of a Notice of Borrowing as required by Section 2.02; (b) immediately after such Borrowing, the aggregate outstanding principal amount of the Loans will not exceed the aggregate amount of the Commitments; (c) immediately before and after such Borrowing, no Default shall have occurred and be continuing; and (d) the representations and warranties of the Borrower and Newcourt contained in this Agreement (except the representation and warranty set forth in Section 4.04(d)) shall be true in all material respects on and as of the date of such Borrowing. Each Borrowing hereunder shall be deemed to be a representation and warranty by the Borrower and Newcourt on the date of such Borrowing as to the facts specified in clauses (b), (c) and (d) of this Section. ARTICLE 4 REPRESENTATIONS AND WARRANTIES Each of the Borrower, Newcourt and Newcourt USA jointly and severally represents and warrants that: SECTION 4.01. CORPORATE EXISTENCE AND POWER. Each Obligor and each Material Subsidiary of Newcourt is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate power and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted except those which the failure to have would not have a Material Adverse Effect. SECTION 4.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO CONTRAVENTION. (a) The execution, delivery and performance by the Borrower of 26 this Agreement and the Notes are within the Borrower's corporate power, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any governmental body, agency or official and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of the Borrower or of any material agreement, judgment, injunction, order, decree or other material instrument binding upon the Borrower or result in the creation or imposition of any Lien on any asset of the Borrower. (b) The execution, delivery and performance by each Guarantor of this Agreement and the Notes are within each Guarantor's corporate power, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any governmental body, agency or official, including without limitation, any action by or in respect of, or filing with, any governmental body, agency or official required by exchange control regulations to enable Newcourt to pay its obligations hereunder in Dollars at the office of the Agent in New York City, and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of any Guarantor or of any material agreement, judgment, injunction, order, decree or other material instrument binding upon any Guarantor or result in the creation or imposition of any Lien on any asset of any Guarantor. SECTION 4.03. BINDING EFFECT. This Agreement constitutes a valid and binding agreement of each Obligor, and the Notes, when executed and delivered in accordance with this Agreement, will constitute valid and binding obligations of each Obligor, in each case enforceable against each Obligor (or in the case of the Notes, the Borrower) in accordance with their respective terms, except as the same may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and similar laws affecting creditors' rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law). SECTION 4.04. FINANCIAL INFORMATION. (a) The consolidated balance sheet of Newcourt and its Consolidated Subsidiaries as of December 31,1997 and the related consolidated statements of income, changes in stockholders' equity and cash flows for the fiscal year then ended, reported on by Ernst & Young and set forth in Newcourt's 1997 Form 40-F and Newcourt's 1997 Annual Report, copies of which have been delivered to each of the Banks, present fairly, in all material respects, the consolidated financial position of Newcourt and its Consolidated Subsidiaries as of such date and the consolidated results of their operations and cash flows for such fiscal year, in conformity with GAAP. 27 (b) The consolidated balance sheet of the Borrower and its consolidated subsidiaries as of December 31, 1997 and the related consolidated statements of income, changes in stockholders' equity and cash flows for the fiscal year then ended, reported on by Arthur Andersen LLP and set forth in the Borrower's 1997 Form 10-K, a copy of which has been delivered to each of the Banks, present fairly, in all material respects, the consolidated financial position of the Borrower and its consolidated subsidiaries as of such date and the consolidated results of their operations and cash flows for such fiscal year, in conformity with generally accepted accounting principles as in effect in the United States. (c) The PRO FORMA balance sheet of Newcourt and its Consolidated Subsidiaries as of December 31, 1997, certified by Newcourt's chief financial officer or chief accounting officer, set forth in Newcourt's 1997 Annual Report, a copy of which has been delivered to each of the Banks prior to the date hereof, fairly presents, in accordance with GAAP applied on a basis consistent with the financial statements referred to in Section 4.04(a), the consolidated financial position of Newcourt and its Consolidated Subsidiaries as of such date, adjusted to give effect to the Acquisition as if the Acquisition had occurred on December 31, 1997. (d) Since December 31, 1997 to the Effective Date, after giving effect to the PRO FORMA adjustments referred to in clause (c) above, there has been no material adverse change in the consolidated financial condition of Newcourt and its Consolidated Subsidiaries. SECTION 4.05. LITIGATION. There is no action, suit or proceeding pending against, or to the knowledge of the Borrower or Neweourt threatened against, Newcourt, the Borrower or any of Newcourt's other Subsidiaries before any court or arbitrator or any governmental body, agency or official in which there is a reasonable probability of an adverse decision which would have a Material Adverse Effect, or which in any manner draws into question the validity or enforceability of this Agreement or the Notes. SECTION 4.06. SUBSIDIARIES. Each of Newcourt's Consolidated Subsidiaries which is a corporation is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate power and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted, except those which the failure to have would not have a Material Adverse Effect SECTION 4.07. NOT AN INVESTMENT COMPANY. Neither Newcourt, the Borrower nor any of Newcourt's other Subsidiaries is an "INVESTMENT COMPANY" within the meaning of the Investment Company Act of 1940, as amended. 28 SECTION 4.08. FULL DISCLOSURE. No written information heretofore furnished by the Borrower or Newcourt to the Agent or any Bank pursuant to Section 4.04 is, and no written information hereafter furnished by the Borrower or Newcourt to the Agent or any Bank pursuant to Section 5.01 contains or will contain any material misstatement of any material facts. SECTION 4.09. RANK OF DEBT. The obligations of the Borrower under this Agreement to pay the principal of and interest on the Loans and any and all other amounts due hereunder and the obligations of the Guarantors hereunder constitute direct and unconditional obligations of the Borrower and the Guarantors and, except for Liens permitted under Section 5.07 and any obligations in respect of employee benefits and taxes which have priority under the laws of the United States or Canada, as the case may be, will rank at least PARI PASSU in right of payment with all other Debt of the Borrower and the Guarantors. SECTION 4.10. TAXES. Newcourt and each of the Material Subsidiaries has filed or caused to be filed all income and other material tax returns and reports required to be filed, and have paid all taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP. To the best of Newcourt's knowledge, there is no proposed tax assessment against Newcourt or any of the Material Subsidiaries that would, if made, have a Material Adverse Effect. ARTICLE 5 COVENANTS The Borrower and Newcourt each agree that, so long as any Bank has any Commitment hereunder or any amount payable under any Note remains unpaid: SECTION 5.01. INFORMATION. Newcourt will deliver to each of the Banks: (a) within 105 days after the end of each fiscal year of Newcourt, a consolidated balance sheet of Newcourt and its Consolidated Subsidiaries as of the end of such fiscal year and the related consolidated statements of income, changes in stockholders' equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures as of the end of and for the previous fiscal year, all reported on in a manner acceptable to the Securities and Exchange Commission by Ernst & Young or other independent public accountants of nationally recognized standing; 29 (b) within 60 days after the end of each of the first three quarters of each fiscal year of Newcourt, a consolidated balance sheet of Newcourt and its Consolidated Subsidiaries as of the end of such quarter and the related consolidated statements of income for such quarter and the related consolidated statements of income and cash flows for the portion of Newcourt's fiscal year ended at the end of such quarter, setting forth in the case of such statements of income in comparative form the figures for the corresponding quarter and in the case of such statements of income and cash flows the corresponding portion of Neweourt's previous fiscal year, all certified as to fairness of presentation, GAAP and consistency by the chief financial officer or the chief accounting officer of Newcourt, subject to normal year end adjustments; (c) simultaneously with the delivery of each set of financial statements referred to in clauses (a) and (b) above, a certificate of the chief financial officer or the chief accounting officer of Newcourt (i) setting forth in reasonable detail the calculations required to establish whether Newcourt was in compliance with the requirements of Sections 5.03, 5.04 and 5.05, inclusive, on the date of the consolidated balance sheet included in such financial statements and (ii) stating whether any Default exists on the date of such certificate and, if any Default then exists, setting forth the details thereof and the action which Newcourt is taking or proposes to take with respect thereto; (d) promptly after the mailing thereof to the shareholders of Newcourt generally, copies of all financial statements, reports and proxy statements so mailed; and (e) promptly after the filing thereof; copies of all reports on Forms 40-F, 6-K, 10-K, 10-Q and 8-K (or their equivalents), as applicable, which any Obligor shall have filed with the Securities and Exchange Commission and copies of annual reports to shareholders, annual financial statements, annual information forms and notices of annual meetings, as applicable, which Newcourt shall have filed with the Ontario Securities Commission or any of the securities regulatory authorities in a Province of Canada SECTION 5.02. MAINTENANCE OF EXISTENCE. Newcourt will, and will cause each of its Material Subsidiaries to, preserve, renew and keep in full force and effect its corporate existence except as otherwise permitted under Section 5.08. 30 SECTION 5.03. INTEREST COVERAGE. The ratio of Consolidated EBIT to Consolidated Interest Expense will not, for any period of four consecutive fiscal quarters, be less than 1.25 to 1. SECTION 5.04. DEBT. Consolidated Debt determined at the end of any fiscal quarter will not exceed 750% of Consolidated Tangible Net Worth determined at the end of such fiscal quarter, and Consolidated Debt determined at the end of any fiscal month which is not the last month of a fiscal quarter will not exceed 750% of the greater of(i) Consolidated Tangible Net Worth determined at the end of the most recently ended fiscal quarter or (ii) Consolidated Tangible Net Worth determined at the end of such fiscal month. SECTION 5.05. MINIMUM CONSOLIDATED TANGIBLE NET WORTH. Consolidated Tangible Net Worth shall at all times be at least (i) $1,059,000,000 PLUS (ii) an amount equal to 50% of Consolidated Net Income for each fiscal quarter of Newcourt and its Consolidated Subsidiaries ending alter December 31, 1997 (but on or prior to the date of determination) for which Consolidated Net Income is positive (but with no deduction on account of negative Consolidated Net Income for any fiscal quarter of Newcourt and its Consolidated Subsidiaries) PLUS (iii) an amount equal to 50% of the net proceeds, including the fair market value of property other than cash (as determined in good faith by Newcourt's Board of Directors), received after December 31, 1997 (x) by Newcourt from the issuance of any capital stock of Newcourt, or in connection with the conversion or exchange of any Debt into any such capital stock of Newcourt or (y) by any Consolidated Subsidiary, to the extent that such amount received by a Consolidated Subsidiary is included in the determination of, and results in an increase to, the Permitted Additional Amount. SECTION 5.06. RESTRICTED PAYMENTS. Newcourt will not, and will not permit any of its Subsidiaries to, declare or make any Restricted Payment unless, both before and after giving effect thereto, no Event of Default under any of paragraphs (a), (b), (d), (e), (f), (g), (h), (i) or (j) of Section 6.01 shall have occurred and be continuing. SECTION 5.07. NEGATIVE PLEDGE. Newcourt will not and will not permit the Borrower or any Restricted Subsidiary to, create, assume or suffer to exist any Lien on any asset now owned or hereafter acquired by it, except: (a) Liens existing on the date of this Agreement securing Debt outstanding on the date of this Agreement (or Debt issued or incurred pursuant to commitments outstanding on the date of this Agreement) in an aggregate principal or face amount not exceeding $420,000,000 (or its equivalent in any other currency); 31 (b) Liens on property of, or on any shares of stock or Debt of, any corporation existing at the time such corporation becomes a Restricted Subsidiary and not created at the request or with the consent of Newcourt and in contemplation of such event; (c) Liens on property, shares of stock, other equity interests, or Debt existing at the time of acquisition or repossession thereof by Newcourt, the Borrower or any Restricted Subsidiary and not created at the request or with the consent of Newcourt and in contemplation of such event; (d) Liens on physical property (or any Accounts Receivable arising in connection with the lease thereof), shares of stock; other equity interests, or Debt acquired (or, in the case of physical property, constructed) after the date hereof by Newcourt, the Borrower or any Restricted Subsidiary, which Liens are created prior to, at the time of, or within 180 days after such acquisition (or, in the case of physical property, the completion of such construction or commencement of commercial operation of such property, whichever is later) to secure any Debt incurred or assumed for the purpose of financing all or any part of the cost of such acquisition (or such construction); (e) any Lien on any asset of any corporation existing at the time such corporation is merged or consolidated with or into Newcourt, the Borrower or a Restricted Subsidiary and not created in contemplation of such event; (f) Liens arising in the ordinary course of Newecurt's, the Borrower's or such Restricted Subsidiary's business which (i) do not secure Debt or Derivatives Obligations, (ii) do not secure any obligation in an amount exceeding $25,000,000 (or its equivalent in any other currency) and (iii) do not in the aggregate materially detract from the value of its assets or materially impair the use thereof in the operation of its business; (g) Liens on Accounts Receivable of Newcourt, the Borrower or any Restricted Subsidiary arising from or in connection with transactions entered into by Newcourt, the Borrower or such Restricted Subsidiary after the date hereof or on Accounts Receivable acquired by Newcourt, the Borrower or such Restricted Subsidiary after such date from others, which Liens are created prior to, at the time of, or within one year after such Accounts Receivable arise or are acquired or, if later, the completion of the delivery or installation of the equipment or goods or the rendering of the 32 services or the advancement or loaning of funds relating thereto (i) as a result of any guarantee, repurchase or other contingent (direct or indirect) or recourse obligation of Newcourt, the Borrower or such Restricted Subsidiary in connection with the discounting, sale, assignment, transfer or other disposition of such Accounts Receivable or any interest therein, or (ii) to secure or provide for the payment of all or any part of the investment of Newcourt, the Borrower or such Restricted Subsidiary in any such Accounts Receivable (whether or not such Accounts Receivable are the Accounts Receivable on which such Liens are created) or the purchase price thereof or to secure any debt (including, without limitation, Non-Recourse Debt) issued, incurred, assumed or guaranteed for the purpose of financing or refinancing all or any part of such investment or purchase price; (h) Liens on cash and cash equivalents securing Derivatives Obligations, PROVIDED that the aggregate amount of cash and cash equivalents subject to such Liens at no time exceed $25,000,000 (or its equivalent in any other currency); (i) Liens in favor of Newcourt, the Borrower or any Restricted Subsidiary; (j) Liens in favor of Canada or any Province thereof or the United States or any State thereof or the District of Columbia, or any agency, department or other instrumentality thereof, to secure progress, advance or other payments pursuant to any contract or provision of any statute; (k) Liens to secure Non-Recourse Debt in connection with Newcourt, the Borrower or any Restricted Subsidiary engaging in any leveraged or single-investor or other lease transactions, whether (in the case of Liens on or relating to leases or groups of leases or the particular properties subject thereto) such Liens be on the particular properties subject to any leases involved in any of such transactions and/or the rental or other payments or rights under such leases or, in the case of any group of related or unrelated leases, on the properties subject to the leases comprising such group and/or the rental or other payments or rights under such leases, or on any direct or indirect interest therein, and whether (in any case) (i) such Liens be created prior to, at the time of, or at any time after the entering into of such lease transactions and/or (ii) such leases be in existence prior to, or be entered into by Newcourt, the Borrower or such Restricted Subsidiary at the time of or at any time after, the purchase or other acquisition by Newcourt, the Borrower or such Restricted Subsidiary of the properties subject to such leases; 33 (1) Liens securing any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any Debt or other obligation secured by any Lien permitted by any of the foregoing clauses of this Section, PROVIDED, HOWEVER, that any such extension, renewal or replacement shall be limited to all or a part of the property or assets which secured the Debt or other obligation so extended, renewed or replaced (plus any improvements on such property) and that the amount of such Debt or other obligation secured thereby is not increased; and (m) Liens not otherwise permitted by the foregoing clauses of this Section securing Debt in an aggregate principal or face amount at any date not to exceed 10% of Consolidated Tangible Net Worth. Notwithstanding the foregoing, for purposes of this Section, a Lien shall not be deemed to be created (i) solely by virtue of an Asset Drop-Down or (ii) on any Accounts Receivable that are treated as having been sold by Newcourt or any of its Subsidiaries under applicable GAAP applied in accordance with Section 1.02. SECTION 5.08. CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. Each of Newcourt and the Borrower covenants that it will not: (i) merge or consolidate with any other corporation unless (a) either (I) Newcourt or the Borrower, as the case may be, shall be the continuing corporation; or (II) if the successor of such merger or consolidation is not Newcourt or the Borrower, as applicable, the successor Person shall, in the case of a merger or consolidation of Newcourt, be a corporation or other entity organized under the laws of Canada or any Province thereof and in the case of a merger or consolidation of the Borrower, be a corporation or other entity organized under the laws of the United States of America or any State thereof, which, in each case, is approved by the Required Banks and shall expressly assume the obligations of Newcourt or the Borrower, as the case may be, in respect of the due and punctual performance and observance of all of the covenants and conditions of this Agreement to be performed or observed by Newcourt or the Borrower, as the case may be, and the due and punctual payment of the principal of and interest on all the Notes according to their tenor, by one or more agreements, reasonably satisfactory in form to the Required Banks, executed and delivered to the Agent by such successor Person; and (b) Newcourt or the Borrower or such successor entity, as the case may be, shall not, immediately after such merger or consolidation, be in default in the performance or observance of any such covenants or conditions; or 34 (ii) sell or convey all or substantially all of its assets to any Person (other than such a sale or conveyance to a Subsidiary of Newcourt or the Borrower or any successor thereto (such a sale or conveyance being called an "ASSET DROP-DOWN"), unless (a) either (I) the Person which acquires by sale or conveyance all or substantially all the assets of Newcourt or the Borrower, as the case may be, shall, in the case of a sale by Newcourt, be a corporation or other entity organized under the laws of Canada or any Province thereof and in the case of a sale by the Borrower, be a corporation or other entity organized under the laws of the United States of America or any State thereof, which, in each case, is approved by the Required Banks and shall expressly assume the obligations of Newcourt or the Borrower, as the case may be, in respect of the due and punctual performance and observance of all of the covenants and conditions of this Agreement to be performed or observed by Newcourt or the Borrower, as the case may be, and the due and punctual payment of the principal of and interest on all the Notes according to their tenor, by one or more agreements, reasonably satisfactory in form to the Required Banks, executed and delivered to the Agent by such successor Person; or (II) contemporaneously with the completion of such sale or conveyance, all Loans are repaid in full (together with all interest and other amounts accrued thereon to the date of payment) and the Commitments are terminated or reduced to an aggregate amount which is not more than the amount of cash deposited with the Agent and held as cash collateral pursuant to arrangements satisfactory to the Agent for the benefit of the Banks; and (b) such successor entity shall not, immediately after such sale or conveyance, be in default in the performance or observance of any such covenants or conditions. In the event of any Asset Drop-Down after the date of this Agreement, any subsequent sale or conveyance of assets by a Subsidiary to which assets were transferred in such Asset Drop-Down (a "DROP-DOWN SUBSIDIARY") will be deemed to be a sale or conveyance of assets by Newcourt or the Borrower, as the case may be, for purposes of this Section 5.08. This Section 5.08 shall not prohibit either Newcourt or the Borrower from effecting securitization transactions in the ordinary course of its business in a manner not otherwise prohibited by this Agreement SECTION 5.09. USE OF PROCEEDS. The proceeds of the Loans made under this Agreement will be used by the Borrower for general corporate purposes. None of such proceeds will be used for the purpose of buying or carrying any "MARGIN STOCK" within the meaning of Regulation U. SECTION 5.10. COMPLIANCE WITH LAWS. Newcourt shall comply and cause each of the Material Subsidiaries to comply with the requirements of all material applicable laws, including material Environmental Laws, judgments, orders, decisions and awards, non-compliance with which could reasonably be expected to have a Material Adverse Effect. 35 SECTION 5.11. INSPECTION OF PROPERTY, BOOKS AND RECORDS. Newcourt shall maintain and shall cause each of its Subsidiaries to maintain proper books of record and account, in which full, true and correct entries in conformity with applicable generally accepted accounting principles consistently applied shall be made of all financial transactions and matters involving the assets and business of Newcourt and of each of its Subsidiaries. If an Event of Default shall have occurred and be continuing, Newcourt shall permit, and shall cause each of its Subsidiaries to permit, representatives and independent contractors of the Agent, acting on behalf of the Banks to visit and inspect any of their respective properties, to examine their respective corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss their respective affairs, finances and accounts with their respective directors, officers, and independent public accountants, all at the expense of Newcourt, and at any time during normal business hours and as often as may be reasonably desired, without advance notice to Newcourt. SECTION 5.12. YEAR 2000 COMPATIBILITY. Newcourt shall take and shall cause each of the Material Subsidiaries to take all reasonable action necessary to assure that its computer based systems are able to operate and effectively process data including dates on or after January 1, 2000. At the request of the Agent, Newcourt shall provide the Agent reasonable assurance of such Person's compliance with the immediately preceding sentence. SECTION 5.13. PARI PASSU. No Obligor shall create, incur or issue any Unsecured Debt which is contractually senior in right of payment to the obligations of such Obligor under the Newcourt Agreements. No Obligor shall permit any Restricted Subsidiary to create, incur or issue any Unsecured Debt, other than Debt owed to Newcourt and its Subsidiaries ("INTERCOMPANY DEBT"), unless (x) such creation, incurrence or issuance by such Restricted Subsidiary would not otherwise result in a Default and (y) within 45 days after creating, incurring or issuing such Unsecured Debt (other than Intercompany Debt), such Restricted Subsidiary executes and delivers to the Agent for the benefit of the Banks, a guaranty, substantially on terms no less favorable to the Banks than those set forth in Exhibit F, with respect to the obligations of AT&T Capital Corporation and Newcourt under the Newcourt Agreements, together with a favorable opinion of counsel, substantially to the effect, with respect to such Restricted Subsidiary, of the opinion of counsel delivered with respect to Newcourt pursuant to Section 301(d)(ii) hereof. 36 ARTICLE 6 DEFAULTS SECTION 6.01. EVENT OF DEFAULT. If one or more of the following events ("EVENTS OF DEFAULT") shall have occurred and be continuing: (a) the Borrower shall fail to pay when due any principal of any Loan, or shall fail to pay within five Domestic Business Days of the due date thereof any interest on any Loan, any fees or any other amount payable hereunder, (b) Newcourt shall fail to observe or perform any covenant contained in Section 5.02, 5.03, 5.04, 5.05, 5.06, 5.07 or 5.08; (c) the Borrower or Newcourt shall fail to observe or perform any covenant or agreement contained in this Agreement (other than those covered by clause (a) or (b) above) for 30 days after notice thereof has been given to the Borrower or Newcourt by the Agent at the request of the Required Banks; (d) any representation or warranty made or deemed made by the Borrower or Newcourt in this Agreement or in any certificate delivered pursuant to this Agreement shall prove to have been materially incorrect when made (or deemed made pursuant to Section 3.02); (e) Newcourt, the Borrower or any other Subsidiary of Newcourt shall fail to make any payment of principal or interest in respect of any Material Financial Obligations when due or within any applicable grace period; (f) any event or condition shall occur which results in the acceleration of the maturity of any Material Debt or enables the holder of such Debt or any Person acting on such holder's behalf to accelerate the maturity thereof (unless such acceleration or right to accelerate in respect of such event or condition has been validly waived by or on behalf of such holder by waiver then in effect); (g) Newcourt, the Borrower or any other Subsidiary of Newcourt shall commence a voluntary case seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any 37 such relief or to the appointment of or taking possession by any such official in an involuntary case seeking such relief commenced against it under any such law, or shall make a general assignment for the benefit of creditors, or shall admit in writing its inability generally to pay its debts as they become due; (h) an order for relief shall be entered against Newcourt, the Borrower or any other Subsidiary of Newcourt under any bankruptcy, insolvency or other similar law now or hereafter in effect in an involuntary case or other proceeding seeking liquidation, reorganization or other relief with respect to it or its debts or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such decree or order shall remain undismissed and unstayed for a period of 90 days; (i) Newcourt shall cease to be the direct or indirect beneficial owner of 100% of shares of common stock of Newcourt Holdings USA, Newcourt USA or the Borrower; PROVIDED that the dissolution of Newcourt USA upon repayment in full of the Newcourt USA Debt shall not be an Event of Default; (j) any person or group of persons (within the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as amended) shall have acquired on any date beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission under said Act) of shares of capital stock of Newcourt with 50.1% or more of the Voting Power; (k) one or more non-interlocutory judgments, non-interlocutory orders, judgments or orders forte payment of money, decrees or arbitration awards is entered against Newcourt, the Borrower or any other Consolidated Subsidiary of Newcourt involving in the aggregate a liability (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage) as to any single or related series of transactions, incidents or conditions, of $50,000,000 (or its equivalent amount in any other currency) or more, and the same shall remain unsatisfied, unvacated or unstayed pending appeal for a period of 60 days after the entry thereof; (l) the guaranty by any Guarantor pursuant to this Agreement shall at any time fail to constitute a valid and binding agreement of such Guarantor or an Obligor shall so assert in writing; 38 then, and in every such event, the Agent shall (i) if requested by Banks having more than 50% in aggregate amount of the Commitments, by notice to the Borrower terminate the Commitments and they shall thereupon terminate, and (ii) if requested by Banks holding Notes evidencing more than 50% in aggregate principal amount of the Loans, by notice to the Borrower declare the Loans (together with accrued interest thereon) to be, and the Loans (together with accrued interest thereon) shall thereupon become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower, PROVIDED that in the case of any of the Events of Default specified in paragraph (g) or (h) above with respect to the Borrower or Newcourt, without any notice to the Borrower or Newcourt or any other act by the Agent or the Banks, the Commitments shall thereupon terminate and the Loans (together with accrued interest thereon) shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower and Newcourt. SECTION 6.02. NOTICE OF DEFAULT. The Agent shall give notice to the Borrower or Newcourt, as the case may be, under Section 6.01(c) promptly upon being requested to do so by the Required Banks and shall thereupon notify all the Banks thereof SECTION 6.03. RESCISSION. If at any time after termination of the Commitments and/or acceleration of the maturity of the Loans pursuant to Section 6.01, the Borrower shall pay all arrears of interest and all payments on account of principal of the Loans which shall have become due otherwise than by acceleration (with interest on principal at the rates specified in this Agreement) and all Defaults (other than nonpayment of principal of and accrued interest on the Loans due and payable solely by virtue of acceleration) shall be remedied or waived pursuant to Section 10.05, then upon the written consent of the Required Banks and notice to the Borrower, such termination of the Commitments and/or such acceleration and their consequences may be rescinded and annulled, but such action shall not affect any subsequent Default or impair any right or remedy consequent thereon. The provisions of the preceding sentence are intended merely to bind the Banks to a decision which may be made at the election of the Required Banks; they are not intended to benefit the Borrower and do not give the Borrower the right to require the Banks to rescind or annul any acceleration hereunder, even if the conditions set forth herein are met. 39 ARTICLE 7 THE AGENT SECTION 7.01. APPOINTMENT AND AUTHORIZATION. Each Bank irrevocably appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the Notes as are delegated to the Agent by the terms hereof or thereof, together with all such powers as are reasonably incidental thereto. SECTION 7.02. AGENT AND AFFILIATES. Morgan Guaranty Trust Company of New York shall have the same rights and powers under this Agreement as any other Bank and may exercise or refrain from exercising the same as though it were not the Agent, and Morgan Guaranty Trust Company of New York and its affiliates may accept deposits from, lend money to, and generally engage in any kind of business with Newcourt or any Subsidiary or affiliate of Newcourt as if it were not the Agent hereunder. SECTION 7.03. ACTION BY AGENT. The obligations of the Agent hereunder are only those expressly set forth herein. Without limiting the generality of the foregoing, the Agent shall not be required to take any action with respect to any Default, except as expressly provided in Article 6. SECTION 7.04. CONSULTATION WITH EXPERTS. The Agent may consult with legal counsel (who may be counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts. SECTION 7.05. LIABILITY OF AGENT. Neither the Agent nor any of its affiliates nor any of their respective directors, officers, agents or employees shall be liable for any action taken or not taken by it in connection herewith (i) with the consent or at the request of the Required Banks or (ii) in the absence of its own gross negligence or willful misconduct. Neither the Agent nor any of its affiliates nor any of their respective directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into or verify (i) any statement, warranty or representation made in connection with this Agreement or any borrowing hereunder; (ii) the performance or observance of any of the covenants or agreements of the Borrower; (iii) the satisfaction of any condition specified in Article 3, except receipt of items required to be delivered to the Agent; or (iv) the validity, effectiveness or genuineness of this Agreement, the Notes or any other instrument or writing furnished in connection herewith. The Agent shall not incur any liability by acting in reliance upon any notice, consent, certificate, statement, or other writing (which may be a bank wire, telex, facsimile 40 transmission or similar writing) believed by it to be genuine or to be signed by the proper party or parties. SECTION 7.06. INDEMNIFICATION. Each Bank shall, ratably in accordance with its Commitment, indemnify the Agent, its affiliates and their respective directors, officers, agents and employees (to the extent not reimbursed by the Borrower) against any cost, expense (including counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from such indemnitees' gross negligence or willful misconduct) that such indemnitees may suffer or incur in connection with this Agreement or any action taken or omitted by such indemnitees hereunder. SECTION 7.07. CREDIT DECISION. Each Bank acknowledges 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 credit analysis and decision to enter into this Agreement. Each Bank also acknowledges 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 decisions in taking or not taking any action under this Agreement. SECTION 7.08. SUCCESSOR AGENT. The Agent may resign at any time by giving notice thereof to the Banks and the Borrower. Upon any such resignation, the Borrower shall have the right to appoint a successor Agent from among the Banks. If no successor Agent shall have been so appointed, and shall have accepted such appointment, within 30 days after the retiring Agent gives notice of resignation, then the retiring Agent may, on behalf of the Banks, appoint a successor Agent, which shall be a commercial bank organized or licensed under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $300,000,000. Upon the acceptance of its appointment as Agent hereunder by a successor Agent such successor Agent shall thereupon succeed to and become vested with all the rights and duties of the retiring Agent and the retiring Agent shall be discharged from its duties and obligations hereunder. After any retiring Agent's resignation hereunder as Agent, the provisions of this Article shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent. SECTION 7.09. AGENT'S FEE. The Borrower shall pay to the Agent for its own account fees in the amounts and at the times previously agreed upon between the Borrower and the Agent. 41 SECTION 7.10. OTHER AGENTS. The Syndication Agent and the Co-Documentation Agents shall have no responsibilities or obligations hereunder in their respective capacities as Syndication Agent and Co-Documentation Agents. ARTICLE 8 CHANGE IN CIRCUMSTANCES SECTION 8.01. BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR. If on or prior to the first day of any Interest Period for any Euro-Dollar Loan: (a) the Agent is advised, under the circumstances contemplated by the final sentence of the definition of London Interbank Offered Rate, by the Euro-Dollar Reference Banks that deposits in Dollars (in the applicable amounts) are not being offered to such Reference Banks in the relevant market for such Interest Period, or (b) in the case of Euro-Dollar Loans, Banks having 50% or more of the aggregate principal amount of the affected Loans advise the Agent that the London Interbank Offered Rate as determined by the Agent will not adequately and fairly reflect the cost to such Banks of funding their Euro-Dollar Loans for such Interest Period, the Agent shall forthwith give notice thereof to the Borrower and the Banks, whereupon until the Agent notifies the Borrower that the circumstances giving rise to such suspension no longer exist, (i) the obligations of the Banks to make Euro-Dollar Loans or to convert outstanding Loans into Euro-Dollar Loans, as the case may be, shall be suspended and (ii) each outstanding Euro-Dollar Loan shall be converted into a Base Rate Loan on the last day of the then current Interest Period applicable thereto. Unless the Borrower notifies the Agent at least one Domestic Business Day before the date of any Euro-Dollar Borrowing for which a Notice of Borrowing has previously been given that it elects not to borrow on such date, such Euro-Dollar Borrowing shall instead be made as a Base Rate Borrowing. SECTION 8.02. ILLEGALITY. If, on or after the date of this Agreement the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Bank (or its Euro-Dollar Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall make it unlawful or impossible for any Bank (or its Euro-Dollar Lending Office) to 42 make, maintain or fund its Euro-Dollar Loans and such Bank shall so notify the Agent, the Agent shall forthwith give notice thereof to the other Banks and the Borrower, whereupon until such Bank notifies the Borrower and the Agent that the circumstances giving rise to such suspension no longer exist, the obligation of such Bank to make Euro-Dollar Loans, or to convert outstanding Loans into Euro-Dollar Loans, shall be suspended. Before giving any notice to the Agent pursuant to this Section, such Bank shall designate a different Euro-Dollar Lending Office if such designation will avoid the need for giving such notice and will not, in the judgment of such Bank, be otherwise disadvantageous to such Bank. If such notice is given, each Euro-Dollar Loan of such Bank then outstanding shall be converted to a Base Rate Loan either (a) on the last day of the then current Interest Period applicable to such Euro-Dollar Loan if such Bank may lawfully continue to maintain and fund such Loan to such day or (b) immediately if such Bank shall determine that it may not lawfully continue to maintain and fund such Loan to such day. SECTION 8.03. INCREASED COST AND REDUCED RETURN. (a) If on or after the date hereof, in the case of any Committed Loan or any obligation to make Committed Loans, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Bank (or its Applicable Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall impose, modify or deem applicable any reserve (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System, but excluding with respect to any Euro-Dollar Loan any such requirement with respect to which such Bank is entitled to compensation during the relevant Interest Period under Section 2.14), special deposit, insurance assessment or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Bank (or its Applicable Lending Office) or shall impose on any Bank (or its Applicable Lending Office) or on the United States market for certificates of deposit or the London interbank market any other condition affecting its Euro-Dollar Loans, its Note or its obligation to make Euro-Dollar Loans and the result of any of the foregoing is to increase the cost to such Bank (or its Applicable Lending Office) of making or maintaining any Euro-Dollar Loan, or to reduce the amount of any sum received or receivable by such Bank (or its Applicable Lending Office) under this Agreement or under its Note with respect thereto, by an amount deemed by such Bank to be material, then, pursuant to paragraph (c) below, the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank for such increased cost or reduction. 43 (b) If any Bank shall have determined that, after the date hereof, the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change in any such law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency (including any determination by any such authority, central bank or comparable agency that, for purposes of capital adequacy requirements, the Commitments hereunder do not constitute commitments with an original maturity of one year or less, which shall be deemed a change in the interpretation and administration of such requirements) has or would have the effect of reducing the rate of return on capital of such Bank (or its Parent) as a consequence of such Bank's obligations hereunder to a level below that which such Bank (or its Parent) could have achieved but for such adoption, change, request or directive (taking into consideration its policies with respect to capital adequacy) by an amount deemed by such Bank to be material, then pursuant to paragraph (c) below, the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank (or its Parent) for such reduction. (c) Each Bank will promptly notify the Borrower and the Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Bank to compensation pursuant to this Section. A certificate of a Bank setting forth such amount or amounts (including computation of such amount or amounts) as shall be necessary to compensate such Bank or its Parent as specified in paragraph (a) or (b) above, as the case may be, shall be delivered to the Borrower and such amount or amounts may be reviewed by the Borrower. Unless the Borrower disagrees in good faith with the computation of the amount or amounts in such certificate, the Borrower shall pay to such Bank, within 30 days after receipt by the Borrower of such certificate delivered by such Bank, the amount shown as due on any such certificate. If the Borrower, after receipt of any such certificate from a Bank, disagrees with such Bank on the computation of the amount or amounts owed to such Bank pursuant to paragraph (a) or (b) above, such Bank and the Borrower shall negotiate in good faith to promptly resolve such disagreement In either case, however, such Bank shall have a duty to mitigate the damages that may arise as a consequence of paragraph (a) or (b) above (including, without limitation, changing its Applicable Lending Office) to the extent that such mitigation will not, in the judgment of such Bank, entail any cost or disadvantage to such Bank that such Bank is not reimbursed or compensated for by the Borrower. SECTION 8.04. TAXES. (a) Any and all payments by any Obligor to or for the account of any Bank or the Agent hereunder or under any Note shall be made 44 free and clear of and without deduction for any and all present or future taxes, duties, levies, imposts, deductions, charges or withholdings imposed by the United States or Canada or any political subdivision or taxing authority of either of the foregoing or any other jurisdiction from which or through which such payment is made or deemed to be made, and all liabilities with respect thereto, EXCLUDING, in the case of each Bank and the Agent, taxes imposed on its net income, and franchise taxes imposed on it, by the jurisdiction in which such Bank or Agent is organized or in which its Applicable Lending Office is located or any political subdivision or taxing authority thereof (all such non-excluded taxes, duties, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "TAXES"). If any Obligor shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any Note to any Bank or the Agent, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 8.04) such Bank or the Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Obligor shall make such deductions, (iii) such Obligor shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law and (iv) such Obligor shall furnish to the Agent, at its address referred to in Section 10.01, the original or a certified copy of a receipt evidencing payment thereof (b) In addition, the Borrower agrees to pay any present or future stamp or documentary taxes and any other excise or property taxes, or charges or similar levies which arise from any payment made hereunder or under any Note or from the execution or delivery of, or otherwise with respect to, this Agreement or any Note (hereinafter referred to as "OTHER TAXES"). (c) Each Obligor agrees to indemnify each Bank and the Agent for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section 8.04) paid by such Bank or the Agent (as the case may be) and any liability (including penalties, interest and reasonable out-of-pocket expenses) arising therefrom or with respect thereto (other than any such liability that results from the gross negligence or willful misconduct of such Bank and the Agent, and whether or not such Taxes or Other Taxes were correctly or legally asserted by the relevant taxing authority or other governmental authority). This indemnification shall be made within 30 days from the date such Bank or the Agent (as the case may be) makes written demand therefor. If any Bank or the Agent determines it has received a refund in respect of any Taxes or Other Taxes for which such Bank or the Agent has received payment from an Obligor hereunder it shall promptly repay such refund (including any interest received by such Bank or the Agent from the taxing authority with respect to the refund with respect to such Taxes or Other 45 Taxes) to such Obligor, net of all reasonable out-of-pocket expenses of such Bank; PROVIDED that such Obligor, upon the request of such Bank or the Agent, agrees to return such refund (plus penalties, interest or other charges) to such Bank or the Agent in the event such Bank or the Agent is required to repay such refund. (d) Each Bank organized under the laws of a jurisdiction outside the United States, on or prior to the date of its execution and delivery of this Agreement in the case of each Bank listed on the signature pages hereof and on or prior to the date on which it becomes a Bank in the case of each other Bank, and from time to time thereafter if requested in writing by the Borrower (but only so long as such Bank remains lawfully able to do so), shall provide the Borrower with Internal Revenue Service Form 1001 or 4224, as appropriate, or any successor form prescribed by the Internal Revenue Service, duly executed by such Bank, certifying that such Bank is entitled to benefits under an income tax treaty to which the United States is a party which reduces the rate of withholding tax on payments of interest or certifying that the income receivable pursuant to this Agreement is effectively connected with the conduct of a trade or business in the United States. If the form provided by a Bank at the time such Bank first becomes a party to this Agreement indicates a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from "TAXES" as defined in Section 8.04(a). (e) Each Bank further agrees to promptly notify the Borrower if such Bank changes its Applicable Lending Office and, upon written request from the Borrower, deliver Forms 1001 or 4224 required pursuant to Section 8.04(d) prior to the immediately following due date of any payment by any Obligor hereunder. (f) No Obligor shall be required to pay any additional amounts to any Bank or the Agent in respect of Taxes and Other Taxes pursuant to paragraphs (a), (b) and (c) above if the obligation to pay such additional amounts would not have arisen but for a failure by such Bank or Agent to comply, if required, with the provisions of paragraphs (d) and (e) above unless such failure results from (i) a change in applicable law, regulation or official interpretation thereof or (ii) an amendment, modification or revocation of any applicable tax treaty or a change in official position regarding the application or interpretation thereof, in each case after the date hereof or after such Bank became a party hereto; PROVIDED, HOWEVER, that should a Bank, which is otherwise exempt from or subject to a reduced rate of withholding tax, become subject to Taxes because of its failure to deliver a form required hereunder, the relevant Obligor shall take such steps as such Bank shall reasonably request to assist such Bank to recover such Taxes. In addition, Newcourt shall not be required to pay any such additional amounts (x) to any Bank by reason of that Bank being connected with Canada (or being engaged in a business or having a permanent establishment in Canada) otherwise than by merely 46 lending money to the Borrower pursuant to this Agreement, including, without limitation, the connection with Canada of a non-resident insurer who carries on an insurance business in Canada and in a country other than Canada or (y) to any Bank in respect of whom such Taxes are required to be withheld or deducted as a result of its not dealing at arm's length with either Newcourt or the Borrower. (g) Any Bank claiming any additional amounts payable under this Section 8.04 shall (i) to the extent legally able to do so, upon reasonable written request from the relevant Obligor, file any certificate or document if such filing would avoid the need for or reduce the amount of any such additional amounts which may thereafter accrue, and such Obligor shall not be obligated to pay such additional amounts if, after such Obligor's request, any Bank could have filed such certificate or document and failed to do so; or (ii) consistent with legal and regulatory restrictions, use reasonable efforts to change the jurisdiction of its Applicable Lending Office if the making of such change would avoid the need for or reduce the amount of any additional amounts which may thereafter accrue and would not, in the judgment of such Bank, be otherwise disadvantageous to such Bank. SECTION 8.05. BASE RATE LOANS SUBSTITUTED FOR AFFECTED EURO-DOLLAR LOANS. If (i) the obligation of any Bank to make or maintain Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation under Section 8.03 or 8.04 with respect to its Euro-Dollar Loans and the Borrower shall, by at least five Euro-Dollar Business Days' prior notice to such Bank through the Agent, have elected that the provisions of this Section shall apply to such Bank, then, unless and until such Bank notifies the Borrower that the circumstances giving rise to such suspension or demand for compensation no longer exist: (a) all Loans which would otherwise be made by such Bank as (or continued as or converted into) Euro-Dollar Loans shall instead be Base. Rate Loans (on which interest and principal shall be payable contemporaneously with the related Euro-Dollar Loans of the other Banks), and (b) after each of its Euro-Dollar Loans has been repaid (or converted to a Base Rate Loan), all payments of principal which would otherwise be applied to repay such Euro-Dollar Loans shall be applied to repay its Base Rate Loans instead. If such Bank notifies the Borrower that the circumstances giving rise to such notice no longer apply, the principal amount of each such Base Rate Loan shall be 47 converted into a Euro-Dollar Loan on the first day of the next succeeding Interest Period applicable to the related Euro-Dollar Loans of the other Banks. SECTION 8.06. SUBSTITUTION OF BANK. If any Bank (i) has demanded compensation for increased costs pursuant to Section 8.03 or 8.04 or (ii) has determined that the making or continuation of any Euro-Dollar Loan has become unlawful or impermissible pursuant to Section 8.02 and similar additional interest or compensation has not been demanded by, or a similar determination has not been made by, all of the Banks, the Borrower shall have the right to designate an Assignee which is not an affiliate of the Borrower to purchase for cash, pursuant to an Assignment and Assumption Agreement substantially in the form of Exhibit D hereto, the outstanding Loans and Commitment of such Bank and to assume all of such Bank's other rights and obligations hereunder without recourse to or warranty by, or expense to, such Bank, for a purchase price equal to the principal amount of all of such Bank's outstanding Loans plus any accrued but unpaid interest thereon and the accrued but unpaid facility fees in respect of that Bank's Commitment hereunder plus such amount, if any, as would be payable pursuant to Section 2.12 if the outstanding Loans of such Bank were prepaid in their entirety on the date of consummation of such assignment. SECTION 8.07. COMPENSATION. The Borrower shall not be liable for compensating any Bank under Sections 2.12, 8.03 and 8.04 for any funding losses, increased costs or taxes incurred by such Bank more than 30 days prior to such Bank's written notice of its intention to demand payment therefor, unless such losses, costs or taxes arose as a result of the retroactive effect of any applicable law or regulation (including any interpretation thereof or court order with respect thereto). ARTICLE 9 GUARANTY SECTION 9.01. THE GUARANTY. Each of the Guarantors, jointly and severally, hereby unconditionally guarantees the full and punctual payment (whether at stated maturity, upon acceleration or otherwise) of the principal of and interest on each Note issued by the Borrower pursuant to this Agreement, and the full and punctual payment of all other amounts payable by the Borrower under this Agreement. Upon failure by the Borrower to pay punctually any such amount, each Guarantor agrees jointly and severally that it shall forthwith on demand pay the amount not so paid at the place and in the manner specified in this Agreement. 48 SECTION 9.02. GUARANTY UNCONDITIONAL. The obligations of each Guarantor under this Article shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by: (a) any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of any other Obligor under this Agreement or any Note, by operation of law or otherwise; (b) any modification or amendment of or supplement to this Agreement or any Note; (c) any release, impairment, non-perfection or invalidity of any direct or indirect security for any obligation of any other Obligor under this Agreement or any Note (including, without limitation, in the case of Newcourt, any release of Newcourt USA pursuant to Section 9.07 hereof); (d) any change in the corporate existence, structure or ownership of any other Obligor or any insolvency, bankruptcy, reorganization or other similar proceeding affecting any other Obligor or its assets or any resulting release or discharge of any obligation of any other Obligor contained in this Agreement or any Note; (e) the existence of any claim, set-off or other rights which such Guarantor may have at any time against the Borrower, the other Guarantor, the Agent, any Bank or any other Person, whether in connection herewith or any unrelated transactions, PROVIDED that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim; (f) any invalidity or unenforceability relating to or against any other Obligor for any reason of this Agreement or any Note or any provision of applicable law or regulation purporting to prohibit the payment by any other Obligor of the principal of or interest on any Note or any other amount payable by any other Obligor under this Agreement; or (g) any other act or omission to act or delay of any kind by the Borrower, the other Guarantor, the Agent, any Bank or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of or defense to such Guarantor's obligations hereunder. SECTION 9.03. DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN CERTAIN CIRCUMSTANCES. Each Guarantor's obligations hereunder shall remain in 49 full force and effect until the Commitment shall have terminated and the principal of and interest on the Notes and all other amounts payable by the Borrower under this Agreement shall have been paid in full. If at any time any payment of the principal of or interest on any Note or any other amount payable by the Borrower under this Agreement is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise, each Guarantor's obligations hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such time. SECTION 9.04. WAIVER BY THE GUARANTORS. Each Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against the Borrower or any other Person. SECTION 9.05. SUBROGATION AND CONTRIBUTION. Upon making any payment with respect to any obligation of the Borrower under this Article 9, each Guarantor making such payment shall be subrogated to the fights of the payee against the Borrower with respect to such obligation; PROVIDED that such Guarantor shall not enforce either (i) any right to receive payment by way of subrogation against the Borrower or against any direct or indirect security for such obligation, or any other right to be reimbursed, indemnified or exonerated by or for the account of the Borrower in respect thereof or (ii) any fight to receive payment, in the nature of contribution or for any other reason, from any other Guarantor with respect to such payment, in each case so long as (x) any Bank has any Commitment hereunder or (y) any amount payable by the Borrower hereunder remains unpaid. SECTION 9.06. STAY OF ACCELERATION. If acceleration of the time for payment of any amount payable by the Borrower under this Agreement or the Notes is stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all such amounts otherwise subject to acceleration under the terms of this Agreement shall nonetheless be payable by the Guarantor hereunder forthwith on demand by the Agent made at the request of the Required Banks. SECTION 9.07. RELEASE OF NEWCOURT USA AS GUARANTOR. Upon the ceasing of Newcourt USA's corporate existence after repayment (PROVIDED that no Default or Event of Default shall have occurred and be continuing at such time) in full of the Newcourt USA Debt including interest thereon and all other amounts with respect thereto, Newcourt USA shall automatically and without further action on the part of any party be released from its obligations as a Guarantor hereunder, and shall no longer be a "Guarantor" party hereto. SECTION 9.08. LIMITATION ON THE OBLIGATIONS. The obligations of Newcourt USA solely as a "guarantor" of the obligations of the Borrower under this Article 50 shall be limited to an aggregate amount that is equal to the largest amount that would not render such obligations of Newcourt USA under this Article subject to avoidance under Section 548 of the United States Bankcruptcy Code or any comparable provisions of applicable law. ARTICLE 10 MISCELLANEOUS SECTION 10.01. NOTICES. All notices, requests and other communications to any party hereunder shall be in writing (including bank wire, telex, facsimile transmission or similar writing) and shall be given to such party: (x) in the case of the Borrower, either Guarantor or the Agent, at its address or telex or facsimile number set forth on the signature pages hereof,(y) in the case of any Bank, at its address or telex or facsimile number set forth in its Administrative Questionnaire or (z) in the case of any party, such other address or telex or facsimile number as such party may hereafter specify for the purpose by notice to the Agent and the Borrower. Each such notice, request or other communication shall be effective (i) if given by telex, when such telex is transmitted to the telex number specified in this Section and the appropriate answerback is received, (ii) jf given by mail, 72 hours after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iii) if given by any other means, when received at the address specified in this Section; PROVIDED that notices to the Agent under Article 2 or Article 8 shall not be effective until received. SECTION 10.02. NO WAIVERS. No failure or delay by the Agent or any Bank in exercising any right, power or privilege hereunder or under any Note shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. SECTION 10.03. EXPENSES; INDEMNIFICATION. (a) The Borrower shall pay (i) all reasonable out-of-pocket expenses of the Agent, including reasonable fees and disbursements of special counsel for the Agent, in connection with the preparation and administration of this Agreement, any waiver or consent hereunder or any amendment hereof or any Default or alleged Default hereunder and (ii) if an Event of Default occurs, all reasonable out-of-pocket expenses incurred by the Agent and each Bank, including reasonable fees and disbursements of counsel, in connection with such Event of Default and collection, bankruptcy, insolvency and other enforcement proceedings resulting therefrom. 51 (b) The Borrower agrees to indemnify the Agent and each Bank, their respective affiliates and the respective directors, officers, agents and employees of the foregoing (each an "INDEMNITEE") and hold each Indemnitee harmless from and against any and all liabilities, losses, damages, costs and reasonable out-of pocket expenses of any kind (including, without limitation, the reasonable fees and disbursements of counsel) which were actually incurred by such Indemnitee in connection with any investigative, administrative or judicial proceeding (whether or not such Indemnitee shall be designated a party thereto) brought or threatened relating to or arising out of this Agreement or any actual or proposed use of proceeds of Loans hereunder; PROVIDED that no Indemnitee shall have the right to be indemnified hereunder for such Indemnitee's own gross negligence or willful misconduct SECrION 10.04. SHARING OF SET-OFFS. (a) Each Bank agrees that if it shall, by exercising any right of set-off or counterclaim or otherwise, receive payment of a proportion of the aggregate amount of principal and interest due with respect to any Note held by it which is greater than the proportion received by any other Bank in respect of the aggregate amount of principal and interest due with respect to any Note held by such other Bank, the Bank receiving such proportionately greater payment shall purchase such participations in the Notes held by the other Banks, and such other adjustments shall be made, as may be required so that all such payments of principal and interest with respect to the Notes held by the Banks shall be shared by the Banks pro rata PROVIDED that nothing in this Section shall impair the right of any Bank to exercise any right of set-off or counterclaim it may have and to apply the amount subject to such exercise to the payment of indebtedness of the Borrower other than its indebtedness under the Notes. (b) If any Obligor fails to pay any amount payable hereunder when due, each Bank is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Bank to or for the credit or the account of such Obligor against any and all of the obligations of such Obligor now or hereafter existing hereunder, irrespective of whether or not such Bank shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of the Bank under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Bank may have. SECTION 10.05. AMENDMENTS AND WAIVERS. Any provision of this Agreement or the Notes may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Borrower and the Required Banks (and, if the rights or duties of the Agent are affected thereby, by the Agent); 52 PROVIDED that no such amendment or waiver shall, unless signed by all the Banks, (i) increase or decrease the Commitment of any Bank (except for a ratable decrease in the Commitments of all Banks) or subject any Bank to any additional obligation, (ii) reduce the principal of or rate of interest on any Loan or any fees hereunder, (iii) postpone the scheduled maturity of any payment of principal of or interest on any Loan or any fees hereunder, (iv) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Notes, or the number of Banks, which shall be required for the Banks or any of them to take any action under this Section or any other provision of this Agreement, (v) release Newcourt from its obligations under its guaranty hereunder or (vi) amend or modify the provisions of this Section 10.05. SECTION 10.06. SUCCESSORS AND ASSIGNS. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Borrower may not assign or otherwise transfer any of its tights under this Agreement without the prior written consent of all Banks. (b) Any Bank may at any time grant to one or more banks or other institutions (each a "PARTICIPANT") participating interests in its Commitment or any or all of its Loans. In the event of any such grant by a Bank of a participating interest to a Participant, whether or not upon notice to the Borrower and the Agent, such Bank shall remain responsible for the performance of its obligations hereunder, and the Borrower and the Agent shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement. Any agreement pursuant to which any Bank may grant such a participating interest shall provide that such Bank shall retain the sole right and responsibility to enforce the obligations of the Borrower hereunder including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement; PROVIDED that such participation agreement may provide that such Bank will not agree to any modification, amendment or waiver of this Agreement described in clause (i), (ii) or (iii) of Section 10.05 without the consent of the Participant The Borrower agrees that each Participant shall, to the extent provided in its participation agreement, be entitled to the benefits of Sections 2.12 and 2.14 and Article 8 with respect to its participating interest. An assignment or other transfer which is not permitted by subsection (c) or (d) below shall be given effect for purposes of this Agreement only to the extent of a participating interest granted in accordance with this subsection (b). (c) Any Bank may at any time assign to one or more banks or other institutions (each an "ASSIGNEE") all, or a proportionate part of all, of its rights and obligations under this Agreement and the Notes, and such Assignee shall assume such rights and obligations, pursuant to an Assignment and Assumption 53 Agreement in substantially the form of Exhibit D hereto executed by such Assignee and such transferor Bank, with (and subject to) the subscribed consent of the Borrower (such consent not to be unreasonably withheld) and the Agent; PROVIDED that (i) such assignment shall be made on a pro rata basis between this Agreement and the AT&T 364-Day Credit Agreement, based on the aggregate Commitments under this Agreement and the aggregate "Commitments" under the AT&T 364-Day Credit Agreement, if such AT&T 364-Day Credit Agreement is in effect at such time and (ii) the interest assigned to the Assignee hereunder shall be in a minimum amount equivalent to an original Commitment of $3,333,333, and the collective interest of the transferor Bank and its affiliates shall be in a minimum amount equivalent to an original Commitment of $3,333,333 unless, in the case of the transferor Bank and its affiliates, they have no Commitment after giving effect to such assignment Upon execution and delivery of such instrument and payment by such Assignee to such transferor Bank of an amount equal to the purchase price agreed between such transferor Bank and such Assignee, such Assignee shall be a Bank party to this Agreement and shall have all the rights and obligations of a Bank with a Commitment as set forth in such instrument of assumption, and the transferor Bank shall be released from its obligations hereunder to a corresponding extent, and no further consent or action by any party shall be required. Upon the consummation of any assignment pursuant to this subsection (c), the transferor Bank, the Agent and the Borrower shall make appropriate arrangements so that, if required, a new Note is issued to the Assignee. In connection with any such assignment, the transferor Bank shall pay to the Agent an administrative fee for processing such assignment in the amount of $2,500. If the Assignee is not incorporated under the laws of the United States of America or a state thereof, it shall deliver to the Borrower and the Agent certification as to exemption from deduction or withholding of any United States federal income taxes in accordance with Section 8.04. (d) Any Bank may at any time assign all or any portion of its rights under this Agreement and its Note to a Federal Reserve Bank. No such assignment shall release the transferor Bank from its obligations hereunder. (e) No Assignee, Participant or other transferee of any Bank's rights shall be entitled to receive any greater payment under Section 8.03 or 8.04 than such Bank would have been entitled to receive with respect to the rights transferred, unless such transfer is made with the Borrower's prior written consent or by reason of the provisions of Section 8.02,8.03 or 8.04 requiring such Bank to designate a different Applicable Lending Office under certain circumstances or at a time when the circumstances giving rise to such greater payment did not exist. (f) Any Bank may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 10.06, disclose to the 54 Assignee or Participant or proposed Assignee or Participant any information relating to the Borrower or its Subsidiaries furnished to such Bank by the Agent or by or on behalf of the Borrower; PROVIDED that, prior to any such disclosure, such Assignee or Participant or proposed Assignee or Participant shall agree to preserve in accordance with Section 10.11 the confidentiality of any confidential information described therein. SECTION 10.07. COLLATERAL. Each of the Banks represents to the Agent and each of the other Banks that it in good faith is not relying upon any "MARGIN STOCK" (as defined in Regulation U) as collateral in the extension or maintenance of the credit provided for in this Agreement. SECTION 10.08. GOVERNING LAW; SUBMISSION TO JURISDICTION. (a) This Agreement and each Note shall be governed by and construed in accordance with the laws of the State of New York. (b) The Borrower and each of the Guarantors hereby submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in New York City for purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. The Borrower and each of the Guarantors irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. (c) Each Guarantor irrevocably designates and appoints CT Corporation System, having an office on the date hereof at 1633 Broadway, New York, New York 10102 as such Guarantor's authorized agent, to accept and acknowledge on its behalf service of any and all process which may be served in any suit, action or proceeding referred to in Section 10.08 in any federal or New York State court sitting in New York City. Each Guarantor represents and warrants that such agent has agreed to accept such appointment Said designation and appointment shall not be revocable by any Guarantor until the Commitments have terminated (or, in the case of Newcourt USA, its status as Guarantor hereunder is terminated) and all principal, interest and other amounts payable by it hereunder shall have been paid in full. If such agent shall cease to act as agent for any Guarantor, such Guarantor agrees to designate irrevocably and appoint without delay another such agent satisfactory to the Agent (d) Each Guarantor consents to process being served in any suit, action or proceeding referred to in Section 10.08(b) in any federal or New York State court sitting in New York City by service of process upon its agent appointed as 55 provided in Section 10.08(c); PROVIDED that, to the extent lawful and possible, notice of said service upon such agent shall be mailed by registered or certified air mail, postage prepaid, return receipt requested, to such Borrower at its address specified in or pursuant to Section 10.01. Each Guarantor irrevocably waives, to the fullest extent permitted by law, all claim of error by reason of service in such manner and agrees that such service shall be deemed in every respect effective service of process upon such Guarantor in any such suit, action or proceeding and shall, to the fullest extent permitted by law, constitute valid and personal service upon and personal delivery to such Guarantor. (e) Nothing in this Section shall affect the right of the Agent or any Bank to serve process in any other manner permitted by law or limit the right of the Agent or any Bank to bring proceedings against any Guarantor or the Borrower in the courts of any jurisdiction or jurisdictions. SECTION 10.09. COUNTERPARTS; INTEGRATION. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof. SECTION 10.10. WAIVER OF JURY TRIAL. EACH OF THE OBLIGORS, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY SECTION 10.11. CONFIDENTIALITY. Subject to Section 10.06(f), the Banks shall hold all nonpublic information obtained pursuant to the requirements of this Agreement and identified as such by the Borrower in accordance with such Bank's customary procedures for handling confidential information of this nature and in accordance with safe and sound banking practices and in any event may make disclosure reasonably required by a bona fide offeree or transferee in connection with the contemplated transfer, or as required or requested by any governmental authority or representative thereof, or pursuant to legal process, or to its affiliates, accountants, lawyers and other advisors, and shall require any such offeree or transferee to agree (and require any of its offerees, transferees or participants to agree) to comply with this Section 10.11. 56 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. AT&T CAPITAL CORPORATION By /s/ Glenn A. Votek --------------------------------------------- Name: Glenn A. Votek Title: Executive Vice President & Treasurer 44 Whippany Road Morristown, NJ 07962 Attention: Glenn A. Votek Telephone: 973-397-3066 Facsimile: 973-397-3106 NEWCOURT CREDIT GROUP INC., as Guarantor By /s/ Glenn A. Votek --------------------------------------------- Name: Glenn A. Votek Title: Executive Vice President & Treasurer By /s/ Daniel A. Jauernig --------------------------------------------- Name: Daniel A. Jauernig Title: President, Services and Chief Financial Officer BCE Place 181 Bay Street Suite 3500 Toronto, Ontario CANADA MSJ 2T3 Attention: Daniel A. Jauernig Telephone: 416-777-6166 Facsimile: 416-594-5229 NEWCOURT CREDIT GROUP USA INC., as Guarantor By /s/ Daniel A. Jauernig --------------------------------------------- Name: Daniel A. Jauernig Title: Senior Vice President & Treasurer BCE Place 181 Bay Street Suite 3500 Toronto, Ontario CANADA M5J 2T3 Attention: Daniel A. Jauernig Telephone: 416-777-6166 Facsimile: 416-594-5229 COMMITMENTS ADMINISTRATIVE AGENT $54,880,435 MORGAN GUARANTY TRUST COMPANY OF NEW YORK By --------------------------------------------- Name: Title: SYNDICATION AGENT $54,880,435 CANADIAN IMPERIAL BANK OF COMMERCE By --------------------------------------------- Name: Title: NEWCOURT CREDIT GROUP USA INC., as Guarantor By --------------------------------------------- Name: Title: BCE Place 181 Bay Street Suite 3500 Toronto, Ontario CANADA M5J 2T3 Attention: Daniel A. Jauernig Telephone: 416-777-6166 Facsimile: 416-594-5229 COMMITMENTS ADMINISTRATIVE AGENT $54,880,435 MORGAN GUARANTY TRUST COMPANY OF NEW YORK By /s/ Maria H. Dell'Aquila --------------------------------------------- Name: MARIA H. DELL'AQUILA Title: VICE PRESIDENT SYNDICATION AGENT $54,880,435 CANADIAN IMPERIAL BANK OF COMMERCE By ---------------------------------------------- Name: Title: NEWCOURT CREDIT GROUP USA INC., as Guarantor By --------------------------------------------- Name: Title: BCE Place 181 Bay Street Suite 3500 Toronto, Ontario CANADA M5J 2T3 Attention: Daniel A. Jauernig Telephone: 416-777-6166 Facsimile: 416-594-5229 COMMITMENTS ADMINISTRATIVE AGENT $54,880,435 MORGAN GUARANTY TRUST COMPANY OF NEW YORK By --------------------------------------------- Name: Title: SYNDICATION AGENT $54,880,435 CANADIAN IMPERIAL BANK OF COMMERCE By /s/ Gerald Girardi --------------------------------------------- Name: GERALD GIRARDI Title: EXECUTIVE DIRECTOR CIBC Oppenheimer Corp., AS AGENT DEUTSCHE BANK AG, NEW YORK BRANCH, as Co-Documentation Agent By /s/ Gayma Z. Shivnarain --------------------------------------------- Name: Gayma Z. Shivnarain Title: Vice President By /s/ Eckhaard Osenberg --------------------------------------------- Name: Eckhaard Osenberg Title: Vice President 31 West 52nd Street New York, NY 10019 Attention: Gayma Z. Shivnarain Telephone: 212-469-8551 Facsimile: 212-469-8108 Attention: THE CHASE MANHATTAN BANK, as Co-Documentation Agent By --------------------------------------------- Name: Title: 270 Park Avenue, 36th floor New York, NY 10017 Attention: Roger Parker, Vice President Telephone: 212-270-3751 Facsimile: 212-270-7149 DEUTSCHE BANK AG, NEW YORK BRANCH, as Co-Documentation Agent By --------------------------------------------- Name: Title: By --------------------------------------------- Name: Title: 31 West 52nd Street New York, NY 10019 Attention: Gayma Z. Shivnarain Telephone: 212-469-8551 Facsimile: 212-469-8108 Attention: THE CHASE MANHATTAN BANK, as Co-Documentation Agent By /s/ Christine M. Herrick --------------------------------------------- Name: Christine M. Herrick Title: Vice President 270 Park Avenue, 36th floor New York, NY 10017 Attention: Roger Parker, Vice President Telephone: 212-270-3751 Facsimile: 212-270-7149 PARTICIPANTS $33,260,870 BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION By /s/ Bridget Garavalia --------------------------------------------- Name: Bridget Garavalia Title: Managign Director $33,260,870 BARCLAYS BANK PLC By --------------------------------------------- Name: Title: $33,260,870 CREDIT LYONNAIS, NEW YORK BRANCH By --------------------------------------------- Name: Title: $33,260,870 DRESDNER BANK AG, NEW YORK BRANCH By --------------------------------------------- Name: Title: By --------------------------------------------- Name: Title: PARTICIPANTS $33,260,870 BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION By --------------------------------------------- Name: Title: $33,260,870 BARCLAYS BANK PLC By /s/ Douglas Butler --------------------------------------------- Name: Douglas Butler Title: Director $33,260,870 CREDIT LYONNAIS, NEW YORK BRANCH By --------------------------------------------- Name: Title: $33,260,870 DRESDNER BANK AG, NEW YORK BRANCH By --------------------------------------------- Name: Title: By --------------------------------------------- Name: Title: PARTICIPANTS $33,260,870 BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION By______________________________________ Name: Title: $33,260,870 BARCLAYS BANK PLC By______________________________________ Name: Title: $33,260,870 CREDIT LYONNAIS, NEW YORK BRANCH By /s/ W. Jay Buckley -------------------------------------- Name: W. JAY BUCKLEY Title: VICE PRESIDENT $33,260,870 DRESDNER BANK AG, NEW YORK BRANCH By______________________________________ Name: Title: By______________________________________ Name: Title: $33,260,870 FIRST UNION NATIONAL BANK By /s/ Jane W. Workman -------------------------------------- Name: JANE W. WORKMAN Title: SENIOR VICE PRESIDENT $33,260,870 THE FIRST NATIONAL BANK OF CHICAGO By______________________________________ Name: Title: $21,619,565 FLEET BANK, N.A. By______________________________________ Name: Title: $21,619,565 MARINE MIDLAND BANK By______________________________________ Name: Title: $21,619,565 NATIONAL AUSTRALIA BANK LIMITED By______________________________________ Name: Title: By______________________________________ Name: Title: $33,260,870 FIRST UNION NATIONAL BANK By______________________________________ Name: Title: $33,260,870 THE FIRST NATIONAL BANK OF CHICAGO By /s/ Cory M. Helfand -------------------------------------- Name: CORY M. HELFAND Title: VICE PRESIDENT $21,619,565 FLEET BANK, N.A. By______________________________________ Name: Title: $21,619,565 MARINE MIDLAND BANK By______________________________________ Name: Title: $21,619,565 NATIONAL AUSTRALIA BANK LIMITED By______________________________________ Name: Title: By______________________________________ Name: Title: $33,260,870 FIRST UNION NATIONAL BANK By______________________________________ Name: Title: $33,260,870 THE FIRST NATIONAL BANK OF CHICAGO By______________________________________ Name: Title: $21,619,565 FLEET BANK, N.A. By /s/ Andrea H. Lee -------------------------------------- Name: Andrea H. Lee Title: VP $21,619,565 MARINE MIDLAND BANK By______________________________________ Name: Title: $21,619,565 NATIONAL AUSTRALIA BANK LIMITED By______________________________________ Name: Title: By______________________________________ Name: Title: $33,260,870 FIRST UNION NATIONAL BANK By______________________________________ Name: Title: $33,260,870 THE FIRST NATIONAL BANK OF CHICAGO By______________________________________ Name: Title: $21,619,565 FLEET BANK, N.A. By______________________________________ Name: Title: $21,619,565 MARINE MIDLAND BANK By /s/ P C L Holberton -------------------------------------- Name: P C L Holberton Title: Senior Vice President $21,619,565 NATIONAL AUSTRALIA BANK LIMITED By______________________________________ Name: Title: By______________________________________ Name: Title: $33,260,870 FIRST UNION NATIONAL BANK By______________________________________ Name: Title: $33,260,870 THE FIRST NATIONAL BANK OF CHICAGO By______________________________________ Name: Title: $21,619,565 FLEET BANK, N.A. By______________________________________ Name: Title: $21,619,565 MARINE MIDLAND BANK By______________________________________ Name: Title: $21,619,565 NATIONAL AUSTRALIA BANK LIMITED By /s/ Bill Schmid -------------------------------------- Name: Bill Schmid Title: Relationship Manager By /s/ R. Adams Perry III -------------------------------------- Name: R. ADAMS PERRY III Title: SVP & Head of Corporate Banking & Finance $21,619,565 ROYAL BANK OF CANADA By /s/ Terence E. J. [Illegible] -------------------------------------- Name: Terence E. J. [Illegible] Title: Senior Manager $21,619,565 THE BANK OF NOVA SCOTIA By______________________________________ Name: Title: $21,619,565 THE TORONTO-DOMINION BANK By______________________________________ Name: Title: By______________________________________ Name: Title: $18,293,478 THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH By______________________________________ Name: Title: $18,293,478 THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH By______________________________________ Name: Title: $21,619,565 ROYAL BANK OF CANADA By______________________________________ Name: Title: $21,619,565 THE BANK OF NOVA SCOTIA By /s/ P.F. Girvan -------------------------------------- Name: P.F. Girvan Title: Relationship Manager $21,619,565 THE TORONTO-DOMINION BANK By______________________________________ Name: Title: By______________________________________ Name: Title: $18,293,478 THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH By______________________________________ Name: Title: $18,293,478 THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH By______________________________________ Name: Title: $21,619,565 ROYAL BANK OF CANADA By______________________________________ Name: Title: $21,619,565 THE BANK OF NOVA SCOTIA By______________________________________ Name: Title: $21,619,565 THE TORONTO-DOMINION BANK By /s/ Matt Hendel -------------------------------------- Name: MATT HENDEL Title: MANAGER, TREASURY CREDIT By /s/ [Illegible] -------------------------------------- Name: [Illegible] Title: [Illegible] $18,293,478 THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH By______________________________________ Name: Title: $18,293,478 THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH By______________________________________ Name: Title: $21,619,565 ROYAL BANK OF CANADA By______________________________________ Name: Title: $21,619,565 THE BANK OF NOVA SCOTIA By______________________________________ Name: Title: $21,619,565 THE TORONTO-DOMINION BANK By______________________________________ Name: Title: By______________________________________ Name: Title: $18,293,478 THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH By /s/ Masahiro Ito -------------------------------------- Name: Masahiro Ito Title: Senior Vice President $18,293,478 THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH By______________________________________ Name: Title: $21,619,565 ROYAL BANK OF CANADA By______________________________________ Name: Title: $21,619,565 THE BANK OF NOVA SCOTIA By______________________________________ Name: Title: $21,619,565 THE TORONTO-DOMINION BANK By______________________________________ Name: Title: By______________________________________ Name: Title: $18,293,478 THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH By______________________________________ Name: Title: $18,293,478 THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH By /s/ John C. Kissinger -------------------------------------- Name: John C. Kissinger Title: Joint General Manager $14,967,391 DG DEUTSCHE GENOSSENSCHAFTSBANK By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 BANCA MONTE DEI PASCHI DI SIENA S.P.A. By /s/ Giulio Natalicchi -------------------------------------- Name: Giulio Natalicchi Title: Vice President & General Manager By /s/ Robert E. Woods -------------------------------------- Name: Robert E. Woods Title: Vice President $13,304,348 BANK OF HAWAII By______________________________________ Name: Title: $14,967,391 DG DEUTSCHE GENOSSENSCHAFTSBANK By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 BANCA MONTE DEI PASCHI DI SIENA S.P.A. By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 BANK OF HAWAII By /s/ Joseph T. Donalson -------------------------------------- Name: Joseph T. Donalson Title: Vice President $13,304,348 BAYERISCHE VEREINSBANK AG, NEW YORK BRANCH By /s/ Ralf Enke -------------------------------------- Name: Ralf Enke Title: Assistant Treasurer By /s/ Marianne Weinzinger -------------------------------------- Name: Marianne Weinzinger Title: Vice President $ 13,304,348 COMERICA BANK By______________________________________ Name: Title: $13,304,348 CREDIT SUISSE FIRST BOSTON By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 SALOMON BROTHERS HOLDING COMPANY INC. By______________________________________ Name: Title: $13,304,348 BAYERISCHE VEREINSBANK AG, NEW YORK BRANCH By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 COMERICA BANK By /s/ Marian Enright -------------------------------------- Name: MARIAN ENRIGHT Title: VICE PRESIDENT $ 13,304,348 CREDIT SUISSE FIRST BOSTON By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 SALOMON BROTHERS HOLDING COMPANY INC. By______________________________________ Name: Title: $13,304,348 BAYERISCHE VEREINSBANK AG, NEW YORK BRANCH By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 COMERICA BANK By______________________________________ Name: Title: $13,304,348 CREDIT SUISSE FIRST BOSTON By /s/ Jay Chall -------------------------------------- Name: Jay Chall Title: Director By /s/ Thomas G. Muoio -------------------------------------- Name: THOMAS G. MUOIO Title: VICE PRESIDENT $13,304,348 SALOMON BROTHERS HOLDING COMPANY INC. By______________________________________ Name: Title: $13,304,348 BAYERISCHE VEREINSBANK AG, NEW YORK BRANCH By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 COMERICA BANK By______________________________________ Name: Title: $13,304,348 CREDIT SUISSE FIRST BOSTON By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 SALOMON BROTHERS HOLDING COMPANY INC. By /s/ Chad A. Leat -------------------------------------- Name: Chad A. Leat Title: Managing Director $13,304,348 SOCIETE GENERALE By /s/ Russell S. Gorman -------------------------------------- Name: Russell S. Gorman Title: Vice President $13,304,348 THE BANK OF NEW YORK By______________________________________ Name: Title: $8,315,217 BANCO CENTRAL HISPANOAMERICANO S.A., NEW YORK BRANCH By______________________________________ Name: Title: $8,315,217 BANK AUSTRIA AKTIENGESELLSCHAFT By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 SOCIETE GENERALE By______________________________________ Name: Title: $13,304,348 THE BANK OF NEW YORK By /s/ Thomas C. McCrohan -------------------------------------- Name: Thomas C. McCrohan Title: Assistant Vice President $8,315,217 BANCO CENTRAL HISPANOAMERICANO S.A., NEW YORK BRANCH By______________________________________ Name: Title: $8,315,217 BANK AUSTRIA AKTIENGESELLSCHAFT By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 SOCIETE GENERALE By______________________________________ Name: Title: $13,304,348 THE BANK OF NEW YORK By______________________________________ Name: Title: $8,315,217 BANCO CENTRAL HISPANOAMERICANO S.A., NEW YORK BRANCH By /s/ Louis Ferreira -------------------------------------- Name: Louis Ferreira Title: Vice President $8,315,217 BANK AUSTRIA AKTIENGESELLSCHAFT By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 SOCIETE GENERALE By______________________________________ Name: Title: $13,304,348 THE BANK OF NEW YORK By______________________________________ Name: Title: $8,315,217 BANCO CENTRAL HISPANOAMERICANO S.A., NEW YORK BRANCH By______________________________________ Name: Title: $8,315,217 BANK AUSTRIA AKTIENGESELLSCHAFT By /s/ J. Anthony Seay -------------------------------------- Name: J. Anthony Seay Title: First Vice President BANK AUSTRIA, AG By /s/ Amy Rich -------------------------------------- Name: Amy Rich Title: Vice President $8,315,217 BANQUE NATIONALE DE PARIS By -------------------------------------- Name: Title: Vice President By /s/ Riva L. Howard -------------------------------------- Name: RIVA L. HOWARD Title: Vice President $8,315,217 BANQUE PARIBAS By______________________________________ Name: Title: By______________________________________ Name: Title: $8,315,217 BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS BRANCH By______________________________________ Name: Title: By______________________________________ Name: Title: $8,315,217 BANQUE NATIONALE DE PARIS By______________________________________ Name: Title: By______________________________________ Name: Title: $8,315,217 BANQUE PARIBAS By /s/ Robert G. Carino -------------------------------------- Name: Robert G. Carino Title: Vice President By /s/ Duane Helkowski -------------------------------------- Name: DUANE HELKOWSKI Title: VICE PRESIDENT $8,315,217 BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS BRANCH By______________________________________ Name: Title: By______________________________________ Name: Title: $8,315,217 BANQUE NATIONALE DE PARIS By______________________________________ Name: Title: By______________________________________ Name: Title: $8,315,217 BANQUE PARIBAS By______________________________________ Name: Title: By______________________________________ Name: Title: $8,315,217 BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS BRANCH By /s/ Peter Obermann -------------------------------------- Name: Peter Obermann Title: Senior Vice President By /s/ Alexander Kohnert -------------------------------------- Name: Alexander Kohnert Title: Vice President $8,315,217 THE FUJI BANK, LIMITED, NEW YORK BRANCH By /s/ Raymond Ventura -------------------------------------- Name: RAYMOND VENTURA Title: Vice President & Manager $8,315,217 UNION BANK OF CALIFORNIA, N.A. By______________________________________ Name: Title: TOTAL COMMITMENTS $765,000,000 ============ $8,315,217 THE FUJI BANK, LIMITED, NEW YORK BRANCH By______________________________________ Name: Title: $8,315,217 UNION BANK OF CALIFORNIA, N.A. By /s/ Donald H. Rubin -------------------------------------- Name: Donald H. Rubin Title: Vice President TOTAL COMMITMENTS $765,000,000 ============ MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent By /s/ Maria H. Dell'Aquila -------------------------------------- Name: MARIA H. DELL'AQUILA Title: VICE PRESIDENT 60 Wall Street New York, NY 10260 Attention: Courtney Smith Telephone: 212-648-6588 Facsimile: 212-648-5249 CANADIAN IMPERIAL BANK OF COMMERCE, as Syndication Agent By______________________________________ Name: Title: Commerce Court West 7th Floor Toronto, Ontario CANADA M5L 1A2 Attention: Associate Director Agency Group Telephone: 416-980-4077 Facsimile: 416-980-5151 $13,304,348 BAYERISCHE VEREINSBANK AG, NEW YORK BRANCH By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 COMERICA BANK By______________________________________ Name: Title: $13,304,348 CREDIT SUISSE FIRST BOSTON By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 SALOMON BROTHERS HOLDING COMPANY INC. By /s/ Chad A. Leat -------------------------------------- Name: Chad A. Leat Title: Managing Director $13,304,348 SOCIETE GENERALE By /s/ Russell S. Gorman -------------------------------------- Name: Russell S. Gorman Title: Vice President $13,304,348 THE BANK OF NEW YORK By______________________________________ Name: Title: $8,315,217 BANCO CENTRAL HISPANOAMERICANO S.A., NEW YORK BRANCH By______________________________________ Name: Title: $8,315,217 BANK AUSTRIA AKTIENGESELLSCHAFT By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 SOCIETE GENERALE By______________________________________ Name: Title: $13,304,348 THE BANK OF NEW YORK By /s/ Thomas C. McCrohan -------------------------------------- Name: Thomas C. McCrohan Title: Assistant Vice President $8,315,217 BANCO CENTRAL HISPANOAMERICANO S.A., NEW YORK BRANCH By______________________________________ Name: Title: $8,315,217 BANK AUSTRIA AKTIENGESELLSCHAFT By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 SOCIETE GENERALE By______________________________________ Name: Title: $13,304,348 THE BANK OF NEW YORK By______________________________________ Name: Title: $8,315,217 BANCO CENTRAL HISPANOAMERICANO S.A., NEW YORK BRANCH By /s/ Louis Ferreira -------------------------------------- Name: Louis Ferreira Title: Vice President $8,315,217 BANK AUSTRIA AKTIENGESELLSCHAFT By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 SOCIETE GENERALE By______________________________________ Name: Title: $13,304,348 THE BANK OF NEW YORK By______________________________________ Name: Title: $8,315,217 BANCO CENTRAL HISPANOAMERICANO S.A., NEW YORK BRANCH By______________________________________ Name: Title: $8,315,217 BANK AUSTRIA AKTIENGESELLSCHAFT By /s/ J. Anthony Seay -------------------------------------- Name: J. Anthony Seay Title: First Vice President BANK AUSTRIA, AG By /s/ Amy Rich -------------------------------------- Name: Amy Rich Title: Vice President $8,315,217 BANQUE NATIONALE DE PARIS By /s/ -------------------------------------- Name: Title: Vice President By /s/ Riva L. Howard -------------------------------------- Name: RIVA L. HOWARD Title: Vice President $8,315,217 BANQUE PARIBAS By______________________________________ Name: Title: By______________________________________ Name: Title: $8,315,217 BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS BRANCH By______________________________________ Name: Title: By______________________________________ Name: Title: $8,315,217 BANQUE NATIONALE DE PARIS By______________________________________ Name: Title: By______________________________________ Name: Title: $8,315,217 BANQUE PARIBAS By /s/ Robert G. Carino -------------------------------------- Name: Robert G. Carino Title: Vice President By /s/ Duane Helkowski -------------------------------------- Name: DUANE HELKOWSKI Title: VICE PRESIDENT $8,315,217 BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS BRANCH By______________________________________ Name: Title: By______________________________________ Name: Title: $8,315,217 BANQUE NATIONALE DE PARIS By______________________________________ Name: Title: By______________________________________ Name: Title: $8,315,217 BANQUE PARIBAS By______________________________________ Name: Title: By______________________________________ Name: Title: $8,315,217 BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS BRANCH By /s/ Peter Obermann -------------------------------------- Name: Peter Obermann Title: Senior Vice President By /s/ Alexander Kohnert -------------------------------------- Name: Alexander Kohnert Title: Vice President $8,315,217 THE FUJI BANK, LIMITED, NEW YORK BRANCH By /s/ Raymond Ventura -------------------------------------- Name: RAYMOND VENTURA Title: Vice President & Manager $8,315,217 UNION BANK OF CALIFORNIA, N.A. By______________________________________ Name: Title: TOTAL COMMITMENTS $765,000,000 ============ $8,315,217 THE FUJI BANK, LIMITED, NEW YORK BRANCH By______________________________________ Name: Title: $8,315,217 UNION BANK OF CALIFORNIA, N.A. By /s/ Donald H. Rubin -------------------------------------- Name: Donald H. Rubin Title: Vice President TOTAL COMMITMENTS $765,000,000 ============ MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent By /s/ Maria H. Dell'Aquila -------------------------------------- Name: MARIA H. DELL'AQUILA Title: VICE PRESIDENT 60 Wall Street New York, NY 10260 Attention: Courtney Smith Telephone: 212-648-6588 Facsimile: 212-648-5249 CANADIAN IMPERIAL BANK OF COMMERCE, as Syndication Agent By______________________________________ Name: Title: Commerce Court West 7th Floor Toronto, Ontario CANADA M5L 1A2 Attention: Associate Director Agency Group Telephone: 416-980-4077 Facsimile: 416-980-5151 PARTICIPANTS $33,260,870 BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION By______________________________________ Name: Title: $33,260,870 BARCLAYS BANK PLC By______________________________________ Name: Title: $33,260,870 CREDIT LYONNAIS, NEW YORK BRANCH By______________________________________ Name: Title: $33,260,870 DRESDNER BANK AG, NEW YORK BRANCH By /s/ [Illegible] -------------------------------------- Name: [Illegible] Title: [Illegible] By /s/ Anthony C. Valencourt -------------------------------------- Name: Anthony C. Valencourt Title: Senior Vice President $33,260,870 FIRST UNION NATIONAL BANK By /s/ Jane W. Workman -------------------------------------- Name: JANE W. WORKMAN Title: SENIOR VICE PRESIDENT $33,260,870 THE FIRST NATIONAL BANK OF CHICAGO By______________________________________ Name: Title: $21,619,565 FLEET BANK, N.A. By______________________________________ Name: Title: $21,619,565 MARINE MIDLAND BANK By______________________________________ Name: Title: $21,619,565 NATIONAL AUSTRALIA BANK LIMITED By______________________________________ Name: Title: By______________________________________ Name: Title: $33,260,870 FIRST UNION NATIONAL BANK By______________________________________ Name: Title: $33,260,870 THE FIRST NATIONAL BANK OF CHICAGO By /s/ Cory M. Helfand -------------------------------------- Name: CORY M. HELFAND Title: VICE PRESIDENT $21,619,565 FLEET BANK, N.A. By______________________________________ Name: Title: $21,619,565 MARINE MIDLAND BANK By______________________________________ Name: Title: $21,619,565 NATIONAL AUSTRALIA BANK LIMITED By______________________________________ Name: Title: By______________________________________ Name: Title: $33,260,870 FIRST UNION NATIONAL BANK By______________________________________ Name: Title: $33,260,870 THE FIRST NATIONAL BANK OF CHICAGO By______________________________________ Name: Title: $21,619,565 FLEET BANK, N.A. By /s/ Andrea H. Lee -------------------------------------- Name: Andrea H. Lee Title: VP $21,619,565 MARINE MIDLAND BANK By______________________________________ Name: Title: $21,619,565 NATIONAL AUSTRALIA BANK LIMITED By______________________________________ Name: Title: By______________________________________ Name: Title: $33,260,870 FIRST UNION NATIONAL BANK By______________________________________ Name: Title: $33,260,870 THE FIRST NATIONAL BANK OF CHICAGO By______________________________________ Name: Title: $21,619,565 FLEET BANK, N.A. By______________________________________ Name: Title: $21,619,565 MARINE MIDLAND BANK By /s/ P C L Holberton -------------------------------------- Name: P C L Holberton Title: Senior Vice President $21,619,565 NATIONAL AUSTRALIA BANK LIMITED By______________________________________ Name: Title: By______________________________________ Name: Title: $33,260,870 FIRST UNION NATIONAL BANK By______________________________________ Name: Title: $33,260,870 THE FIRST NATIONAL BANK OF CHICAGO By______________________________________ Name: Title: $21,619,565 FLEET BANK, N.A. By______________________________________ Name: Title: $21,619,565 MARINE MIDLAND BANK By______________________________________ Name: Title: $21,619,565 NATIONAL AUSTRALIA BANK LIMITED By /s/ Bill Schmid -------------------------------------- Name: Bill Schmid Title: Relationship Manager By /s/ R. Adams Perry III -------------------------------------- Name: R. ADAMS PERRY III Title: SVP & Head of Corporate Banking & Finance $21,619,565 ROYAL BANK OF CANADA By /s/ [Illegible] -------------------------------------- Name: [Illegible] Title: [Illegible] $21,619,565 THE BANK OF NOVA SCOTIA By______________________________________ Name: Title: $21,619,565 THE TORONTO-DOMINION BANK By______________________________________ Name: Title: By______________________________________ Name: Title: $18,293,478 THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH By______________________________________ Name: Title: $18,293,478 THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH By______________________________________ Name: Title: $21,619,565 ROYAL BANK OF CANADA By______________________________________ Name: Title: $21,619,565 THE BANK OF NOVA SCOTIA By /s/ P.F. Girvan -------------------------------------- Name: P.F. Girvan Title: Relationship Manager $21,619,565 THE TORONTO-DOMINION BANK By______________________________________ Name: Title: By______________________________________ Name: Title: $18,293,478 THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH By______________________________________ Name: Title: $18,293,478 THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH By______________________________________ Name: Title: $21,619,565 ROYAL BANK OF CANADA By______________________________________ Name: Title: $21,619,565 THE BANK OF NOVA SCOTIA By______________________________________ Name: Title: $21,619,565 THE TORONTO-DOMINION BANK By /s/ Matt Hendel -------------------------------------- Name: MATT HENDEL Title: MANAGER TREASURY CREDIT By______________________________________ Name: Title: $18,293,478 THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH By______________________________________ Name: Title: $18,293,478 THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH By______________________________________ Name: Title: $21,619,565 ROYAL BANK OF CANADA By______________________________________ Name: Title: $21,619,565 THE BANK OF NOVA SCOTIA By______________________________________ Name: Title: $21,619,565 THE TORONTO-DOMINION BANK By______________________________________ Name: Title: By______________________________________ Name: Title: $18,293,478 THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH By /s/ Masahiro Ito -------------------------------------- Name: Masahiro Ito Title: Senior Vice President $18,293,478 THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH By______________________________________ Name: Title: $21,619,565 ROYAL BANK OF CANADA By______________________________________ Name: Title: $21,619,565 THE BANK OF NOVA SCOTIA By______________________________________ Name: Title: $21,619,565 THE TORONTO-DOMINION BANK By______________________________________ Name: Title: By______________________________________ Name: Title: $18,293,478 THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH By______________________________________ Name: Title: $18,293,478 THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH By /s/ John C. Kissinger -------------------------------------- Name: John C. Kissinger Title: Joint General Manager $14,967,391 DG DEUTSCHE GENOSSENSCHAFTSBANK By /s/ Karen A. Brinkman -------------------------------------- Name: KAREN A. BRINKMAN Title: Vice President By /s/ [Illegible] Ritz -------------------------------------- Name: Ritz Title: VP $13,304,348 BANCA MONTE DEI PASCHI DI SIENA S.P.A. By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 BANK OF HAWAII By______________________________________ Name: Title: $14,967,391 DG DEUTSCHE GENOSSENSCHAFTSBANK By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 BANCA MONTE DEI PASCHI DI SIENA S.P.A. By /s/ Giulio Natalicchi -------------------------------------- Name: Giulio Natalicchi Title: Vice President & General Manager By /s/ Robert E. Woods -------------------------------------- Name: Robert E. Woods Title: Vice President $13,304,348 BANK OF HAWAII By______________________________________ Name: Title: $14,967,391 DG DEUTSCHE GENOSSENSCHAFTSBANK By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 BANCA MONTE DEI PASCHI DI SIENA S.P.A. By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 BANK OF HAWAII By /s/ Joseph T. Donalson -------------------------------------- Name: Joseph T. Donalson Title: Vice President $13,304,348 BAYERISCHE VEREINSBANK AG, NEW YORK BRANCH By /s/ Ralf Enke -------------------------------------- Name: Ralf Enke Title: Assistant Treasurer By /s/ Marianne Weinzinger -------------------------------------- Name: Marianne Weinzinger Title: Vice President $13,304,348 COMERICA BANK By______________________________________ Name: Title: $13,304,348 CREDIT SUISSE FIRST BOSTON By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 SALOMON BROTHERS HOLDING COMPANY INC. By______________________________________ Name: Title: $13,304,348 BAYERISCHE VEREINSBANK AG, NEW YORK BRANCH By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 COMERICA BANK By______________________________________ Name: Title: $13,304,348 CREDIT SUISSE FIRST BOSTON By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 SALOMON BROTHERS HOLDING COMPANY INC. By______________________________________ Name: Title: $13,304,348 BAYERISCHE VEREINSBANK AG, NEW YORK BRANCH By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 COMERICA BANK By______________________________________ Name: Title: $13,304,348 CREDIT SUISSE FIRST BOSTON By /s/ Jay Chall -------------------------------------- Name: Jay Chall Title: Director By /s/ Thomas G. Muoio -------------------------------------- Name: THOMAS G. MUOIO Title: VICE PRESIDENT $13,304,348 SALOMON BROTHERS HOLDING COMPANY INC. By______________________________________ Name: Title: $13,304,348 BAYERISCHE VEREINSBANK AG, NEW YORK BRANCH By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 COMERICA BANK By______________________________________ Name: Title: $ 13,304,348 CREDIT SUISSE FIRST BOSTON By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 SALOMON BROTHERS HOLDING COMPANY INC. By /s/ Chad A. Leat -------------------------------------- Name: Chad A. Leat Title: Managing Director $13,304,348 SOCIETE GENERALE By /s/ Russell S. Gorman -------------------------------------- Name: Russell S. Gorman Title: Vice President $13,304,348 THE BANK OF NEW YORK By______________________________________ Name: Title: $8,315,217 BANCO CENTRAL HISPANOAMERICANO S.A., NEW YORK BRANCH By______________________________________ Name: Title: $8,315,217 BANK AUSTRIA AKTIENGESELLSCHAFT By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 SOCIETE GENERALE By______________________________________ Name: Title: $13,304,348 THE BANK OF NEW YORK By /s/ Thomas C. McCrohan -------------------------------------- Name: Thomas C. McCrohan Title: Assistant Vice President $8,315,217 BANCO CENTRAL HISPANOAMERICANO S.A., NEW YORK BRANCH By______________________________________ Name: Title: $8,315,217 BANK AUSTRIA AKTIENGESELLSCHAFT By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 SOCIETE GENERALE By______________________________________ Name: Title: $13,304,348 THE BANK OF NEW YORK By______________________________________ Name: Title: $8,315,217 BANCO CENTRAL HISPANOAMERICANO S.A., NEW YORK BRANCH By /s/ Louis Ferreira -------------------------------------- Name: Louis Ferreira Title: Vice President $8,315,217 BANK AUSTRIA AKTIENGESELLSCHAFT By______________________________________ Name: Title: By______________________________________ Name: Title: $13,304,348 SOCIETE GENERALE By______________________________________ Name: Title: $13,304,348 THE BANK OF NEW YORK By______________________________________ Name: Title: $8,315,217 BANCO CENTRAL HISPANOAMERICANO S.A., NEW YORK BRANCH By______________________________________ Name: Title: $8,315,217 BANK AUSTRIA AKTIENGESELLSCHAFT By /s/ J. Anthony Seay -------------------------------------- Name: J. Anthony Seay Title: First Vice President BANK AUSTRIA, AG By /s/ [Illegible] -------------------------------------- Name: [Illegible] Title: [Illegible] $8,315,217 BANQUE NATIONALE DE PARIS By /s/ -------------------------------------- Name: Title: Vice President By /s/ Riva L. Howard -------------------------------------- Name: RIVA L. HOWARD Title: Vice President $8,315,217 BANQUE PARIBAS By______________________________________ Name: Title: By______________________________________ Name: Title: $8,315,217 BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS BRANCH By______________________________________ Name: Title: By______________________________________ Name: Title: $8,315,217 BANQUE NATIONALE DE PARIS By______________________________________ Name: Title: By______________________________________ Name: Title: $8,315,217 BANQUE PARIBAS By /s/ Robert G. Carino -------------------------------------- Name: Robert G. Carino Title: Vice President By /s/ Duane Helkowski -------------------------------------- Name: DUANE HELKOWSKI Title: VICE PRESIDENT $8,315,217 BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS BRANCH By______________________________________ Name: Title: By______________________________________ Name: Title: $8,315,217 BANQUE NATIONALE DE PARIS By______________________________________ Name: Title: By______________________________________ Name: Title: $8,315,217 BANQUE PARIBAS By______________________________________ Name: Title: By______________________________________ Name: Title: $8,315,217 BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS BRANCH By /s/ Peter Obermann -------------------------------------- Name: Peter Obermann Title: Senior Vice President By /s/ Alexander Kohnert -------------------------------------- Name: Alexander Kohnert Title: Vice President $8,315,217 THE FUJI BANK, LIMITED, NEW YORK BRANCH By /s/ Raymond Ventura -------------------------------------- Name: RAYMOND VENTURA Title: Vice President & Manager $8,315,217 UNION BANK OF CALIFORNIA, N.A. By______________________________________ Name: Title: TOTAL COMMITMENTS $765,000,000 ============ $8,315,217 THE FUJI BANK, LIMITED, NEW YORK BRANCH By______________________________________ Name: Title: $8,315,217 UNION BANK OF CALIFORNIA, N.A. By /s/ Donald H. Rubin -------------------------------------- Name: Donald H. Rubin Title: Vice President TOTAL COMMITMENTS $765,000,000 ============ MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent By /s/ Maria H. [Illegible] -------------------------------------- Name: MARIA H. [ILLEGIBLE] Title: VICE PRESIDENT 60 Wall Street New York, NY 10260 Attention: Courtney Smith Telephone: 212-648-6588 Facsimile: 212-648-5249 CANADIAN IMPERIAL BANK OF COMMERCE, as Syndication Agent By______________________________________ Name: Title: Commerce Court West 7th Floor Toronto, Ontario CANADA M5L 1A2 Attention: Associate Director Agency Group Telephone: 416-980-4077 Facsimile: 416-980-5151 MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent By______________________________________ Name: Title: 60 Wall Street New York, NY 10260 Attention: Courtney Smith Telephone: 212-648-6588 Facsimile: 212-648-5249 CANADIAN IMPERIAL BANK OF COMMERCE, as Syndication Agent By /s/ Gerald Girardi -------------------------------------- Name: GERALD GIRARDI Title: EXECUTIVE DIRECTOR [Illegible] Corp., AS AGENT 425 Lexington Avenue 8th Floor New York, NY 10017 Attention: Gerald J. Girardi Telephone: 212-856-3649 Facsimile: 212-856-3558 CO-DOCUMENTATION AGENTS $54,880,435 DEUTSCHE BANK AG, NEW YORK BRANCH AND/OR CAYMAN ISLANDS BRANCH By /s/ Gayma Z. Shivnarain -------------------------------------- Name: Gayma Z. Shivnarain Title: Vice President By /s/ Eckhard Osenberg -------------------------------------- Name: Eckhard Osenberg Title: Vice President $54,880,435 THE CHASE MANHATTAN BANK By______________________________________ Name: Title: CO-DOCUMENTATION AGENTS $54,880,435 DEUTSCHE BANK AG, NEW YORK BRANCH AND/OR CAYMAN ISLANDS BRANCH By______________________________________ Name: Title: By______________________________________ Name: Title: $54,880,435 THE CHASE MANHATTAN BANK By______________________________________ Name: Christine M. Herrick Title: Vice President EXHIBIT A NOTE New York, New York , 19 For value received, AT&T Capital Corporation, a Delaware corporation (the "BORROWER"), promises to pay to the order of (the "BANK"), for the account of its Applicable Lending Office, the unpaid principal amount of each Loan made by the Bank to the Borrower pursuant to the Credit Agreement referred to below on the maturity date provided for in the Credit Agreement. The Borrower promises to pay interest on the unpaid principal amount of each such Loan on the dates and at the rate or rates provided for in the Credit Agreement. All such payments of principal and interest shall be made in lawful money of the United States in Federal or other immediately available funds at the office of Morgan Guaranty Trust Company of New York, 60 Wall Street, New York, New York. All Loans made by the Bank, the respective types thereof and all repayments of the principal thereof shall be recorded by the Bank and, if the Bank so elects in connection with any transfer or enforcement hereof, appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding may be endorsed by the Bank on the schedule attached hereto, or on a continuation of such schedule attached to and made a part hereof; PROVIDED that the failure of the Bank to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Credit Agreement. This note is one of the Notes referred to in and subject to the terms of the $765,000,000 Credit Agreement dated as of April 13, 1998 among the Borrower, Newcourt Credit Group Inc., Newcourt Credit Group USA Inc., the Banks party thereto, Morgan Guaranty Trust Company of New York, as Administrative Agent, Canadian Imperial Bank of Commerce, as Syndication Agent, The Chase Manhattan Bank and Deutsche Bank AG, New York Branch, as Co-Documentation Agents and J.P. Morgan Securities Inc. and CIBC Oppenheimer Corp., as Arrangers (as the same may be amended from time to time, the "CREDIT AGREEMENT"). Terms defined in the Credit Agreement are used herein with the same meanings. Reference is made to the Credit Agreement for provisions for the mandatory and optional prepayment hereof and the acceleration of the maturity hereof. Pursuant to the Credit Agreement, payment of principal and interest on this Note is unconditionally guaranteed by the Guarantors on the terms contained in Article 9 of the Credit Agreement. AT&T CAPITAL CORPORATION By______________________________________ Name: Title: Guaranteed pursuant to the Credit Agreement referred to above: NEWCOURT CREDIT GROUP INC. By______________________________________ Name: Title: By______________________________________ Name: Title: NEWCOURT CREDIT GROUP USA INC. By______________________________________ Name: Title: A-2 Note (cont'd) LOANS AND PAYMENTS OF PRINCIPAL
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A-3 EXHIBIT B-1 OPINION OF COUNSEL FOR THE BORROWER To the Banks and the Agent Referred to Below c/o Morgan Guaranty Trust Company of New York, as Agent 60 Wall Street New York, New York 10260 Dear Sirs: I am Assistant General Counsel of AT&T Capital Corporation (the "BORROWER"), and as such, have acted as counsel for the Borrower in connection with the $765,000,000 Credit Agreement (as amended, the "CREDIT AGREEMENT") dated as of April 13, 1998 among the Borrower, Newcourt Credit Group Inc., Newcourt Credit Group USA Inc., the Banks listed on the signature pages thereof, Morgan Guaranty Trust Company of New York, as Administrative Agent, Canadian Imperial Bank of Commerce, as Syndication Agent, The Chase Manhattan Bank and Deutsche Bank AG, New York Branch, as Co-Documentation Agents and J.P. Morgan Securities Inc. and CIBC Oppenheimer Corp., as Arrangers. Terms defined in the Credit Agreement are used herein as therein defined. This opinion is being rendered to you at the request of the Borrower pursuant to Section 3.O1(d)(i) of the Credit Agreement. I have examined originals or copies, certified or otherwise identified to my satisfaction, of such documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and Jaw as I have deemed necessary or advisable for purposes of this opinion. Upon the basis of the foregoing, I am of the opinion that: 1. The Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of Delaware, and has all corporate power and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted, except those which the failure to have would not have a Material Adverse Effect. 2. The execution, delivery and performance by the Borrower of the Credit Agreement and the Notes are within the Borrower's corporate power, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any governmental body, agency or official and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of the Borrower or of any material agreement, judgment, injunction, order, decree or other material instrument binding upon the Borrower or result in the creation or imposition of any Lien on any asset of the Borrower. 3. The Credit Agreement constitutes a valid and binding agreement of the Borrower and the Notes constitute valid and binding obligations of the Borrower, in each case enforceable against the Borrower in accordance with their respective terms, and the guaranty of any Guarantor pursuant to the Credit Agreement constitutes a valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and similar laws affecting creditors' rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law). 4. There is no action, suit or proceeding pending against, or to the best of my knowledge threatened against, the Borrower or any of its Subsidiaries before any court or arbitrator or any governmental body, agency or official, in which there is a reasonable probability of an adverse decision which would have a Material Adverse Effect or which in any manner draws into question the validity or enforceability of the Credit Agreement or the Notes. 5. Each of the Borrower's consolidated subsidiaries which is a corporation is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate power and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted, except those which the failure to have would not have a Material Adverse Effect. I am a member of the Bar of the State of New York and the foregoing opinion is limited to the laws of the State of New York, the federal laws of the United States of America and the General Corporation Law of the State of Delaware. Insofar as the foregoing opinion involves matters governed by the laws of Canada, we have relied, with your approval and without independent investigation, upon the opinion of the Secretary and legal counsel of Newcourt, dated the date hereof, a copy of which has been delivered to you. In addition, in giving the foregoing opinion, I express no opinion as to the effect (if any) of any law of any jurisdiction (except the State of New York) in which any Bank is located which limits the rate of interest that such Bank may charge or collect. B-2 This opinion is rendered solely to you in connection with the above matter. This opinion may not be relied upon by you for any other purpose or relied upon by any other person without my prior written consent. Very truly yours, B-3 EXHIBIT B-2 OPINION OF COUNSEL FOR NEWCOURT To the Banks and the Agent Referred to Below c/o Morgan Guaranty Trust Company of New York, as Agent 60 Wall Street New York, New York 10260 Dear Sirs: I am Secretary and Counsel of Newcourt Credit Group Inc. (the "GUARANTOR"), and as such, have acted as counsel for the Guarantor in connection with the $765,000,000 Credit Agreement (as amended, the "CREDIT AGREEMENT") dated as of April 13, 1998 among AT&T Capital Corporation, the Guarantor, Newcourt Credit Group USA Inc., the Banks listed on the signature pages thereof, Morgan Guaranty Trust Company of New York, as Administrative Agent, Canadian Imperial Bank of Commerce, as Syndication Agent, The Chase Manhattan Bank and Deutsche Bank AG, New York Branch, as Co-Documentation Agents and J.P. Morgan Securities Inc. and CIBC Oppenheimer Corp., as Arrangers. Terms defined in the Credit Agreement are used herein as therein defined. This opinion is being rendered to you by me in my capacity as an officer of the Guarantor and not in my personal capacity at the request of the Guarantor pursuant to Section 3.01(d)(ii) of the Credit Agreement. I have examined originals or copies, certified or otherwise identified to my satisfaction, of such documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and law as I have deemed necessary or advisable for purposes of this opinion. Upon the basis of the foregoing, I am of the opinion that: 1. The Guarantor is a corporation duly incorporated, validly existing and in good standing under the laws of Ontario, and has all corporate power and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted, except those which the failure to have would not have a Material Adverse Effect. 2. The execution, delivery and performance by the Guarantor of the Credit Agreement and the Notes are within the Guarantor's corporate power, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any governmental body, agency or official, including without limitation, any action by or in respect of, or filing with, any governmental body, agency or official required by exchange control regulations to enable the Guarantor to pay its obligations hereunder in Dollars at the office of the Agent in New York City, and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of the Guarantor or of any material agreement, judgment, injunction, order, decree or other material instrument binding upon the Guarantor or result in the creation or imposition of any Lien on any asset of the Guarantor. 3. The Credit Agreement constitutes a valid and binding agreement of the Guarantor and the Notes constitute valid and binding obligations of the Guarantor, in each case enforceable against the Guarantor in accordance with their respective terms, except as the same may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and similar laws affecting creditors' rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law). 4. There is no action, suit or proceeding pending against, or to the best of my knowledge threatened against, the Guarantor or any of its Subsidiaries before any court or arbitrator or any governmental body, agency or official, in which there is a reasonable probability of an adverse decision which would have a Material Adverse Effect or which in any manner draws into question the validity or enforceability of the Credit Agreement. 5. Each of the Guarantor's Consolidated Subsidiaries which is a corporation is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate power and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted, except those which the failure to have would not have a Material Adverse Effect. I am qualified to practice law in the Province of Ontario and the foregoing opinion is limited to the laws of the Province of Ontario and the laws of Canada applicable therein. In giving the foregoing opinion, I express no opinion as to the effect (if any) of any law of any jurisdiction (except the Province of Ontario) in which any Bank is located which limits the rate of interest that such Bank may charge or collect. This opinion is rendered solely to you in connection with the above matter. This opinion may not be relied upon by you for any other purpose or relied upon by any other person without my prior written consent. B2-2 Very truly yours, B2-3 EXHIBIT B-3 OPINION OF COUNSEL FOR NEWCOURT USA To the Banks and the Agent Referred to Below c/o Morgan Guaranty Trust Company of New York, as Agent 60 Wall Street New York, New York 10260 Dear Sirs: I am Assistant General Counsel of AT&T Capital Corporation, and as such, have acted as special counsel for Newcourt Credit Group USA Inc. (the "GUARANTOR"), in connection with the $765,000,000 Credit Agreement (as amended, the "CREDIT AGREEMENT") dated as of April 13, 1998 among AT&T Capital Corporation, the Guarantor, Newcourt Credit Group Inc., the Banks listed on the signature pages thereof, Morgan Guaranty Trust Company of New York, as Administrative Agent, Canadian Imperial Bank of Commerce, as Syndication Agent, The Chase Manhattan Bank and Deutsche Bank AG, New York Branch, as Co-Documentation Agents and J.P. Morgan Securities Inc. and CIBC Oppenheimer Corp., as Arrangers. Terms defined in the Credit Agreement are used herein as therein defined. This opinion is being rendered to you at the request of the Guarantor pursuant to Section 3.0l(d)(iii) of the Credit Agreement. I have examined originals or copies, certified or otherwise identified to my satisfaction, of such documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and law as I have deemed necessary or advisable for purposes of this opinion. Upon the basis of the foregoing, I am of the opinion that: 1. The Guarantor is a corporation duly incorporated, validly existing and in good standing under the laws of Delaware, and has all corporate power and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted, except those which the failure to have would not have a Material Adverse Effect. 2. The execution, delivery and performance by the Guarantor of the Credit Agreement and the Notes are within the Guarantor's corporate power, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any governmental body, agency or official, including without limitation, any action by or in respect of, or filing with, any governmental body, agency or official required by exchange control regulations to enable the Guarantor to pay its obligations hereunder in Dollars at the office of the Agent in New York City, and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of the Guarantor or of any material agreement, judgment, injunction, order, decree or other material instrument binding upon the Guarantor or result in the creation or imposition of any Lien on any asset of the Guarantor. 3. The Credit Agreement constitutes a valid and binding agreement of the Guarantor and the Notes constitute valid and binding obligations of the Guarantor, in each case enforceable against the Guarantor in accordance with their respective terms, except as the same may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and similar laws affecting creditors' rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law). 4. There is no action, suit or proceeding pending against, or to the best of my knowledge threatened against, the Guarantor or any of its Subsidiaries before any court or arbitrator or any governmental body, agency or official, in which there is a reasonable probability of an adverse decision which would have a Material Adverse Effect or which in any manner draws into question the validity or enforceability of the Credit Agreement. 5. Each of the Guarantor's consolidated subsidiaries which is a corporation is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate power and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted, except those which the failure to have would not have a Material Adverse Effect. I am a member of the Bar of the State of New York and the foregoing opinion is limited to the laws of the State of New York, the federal laws of the United States of America and the General Corporation Law of the State of Delaware. In giving the foregoing opinion, I express no opinion as to the effect (if any) of any law of any jurisdiction (except the State of New York) in which any Bank is located which limits the rate of interest that such Bank may charge or collect. This opinion is rendered solely to you in connection with the above matter. This opinion may not be relied upon by you for any other purpose or relied upon by any other person without my prior written consent. B3-2 Very truly yours, B3-3 EXHIBIT C OPINION OF DAVIS POLK & WARDWELL, SPECIAL COUNSEL FOR THE AGENT To the Banks and the Agent Referred to Below c/o Morgan Guaranty Trust Company of New York, as Agent 60 Wall Street New York, New York 10260 Dear Sirs: We have participated in the preparation of the $765,000,000 Credit Agreement (the "CREDIT AGREEMENT") dated as of April 13, 1998 among AT&T Capital Corporation, a Delaware corporation (the "BORROWER"), Newcourt Credit Group Inc., an Ontario corporation, Newcourt Credit Group USA Inc., a Delaware corporation, the banks listed on the signature pages thereof (the "BANKS"), Morgan Guaranty Trust Company of New York, as Administrative Agent (the "AGENT"), Canadian Imperial Bank of Commerce, as Syndication Agent, The Chase Manhattan Bank and Deutsche Bank AG, New York Branch, as Co-Documentation Agents and J.P. Morgan Securities Inc. and CIBC Oppenheimer Corp., as Arrangers, and have acted as special counsel for the Agent for the purpose of rendering this opinion pursuant to Section 3.01(e) of the Credit Agreement. Terms defined in the Credit Agreement are used herein as therein defined. We have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and law as we have deemed necessary or advisable for purposes of this opinion. Upon the basis of the foregoing, we are of the opinion that: 1. The execution, delivery and performance by the Borrower of the Credit Agreement and the Notes are within the Borrower's corporate power and have been duly authorized by all necessary corporate action. 2. The Credit Agreement constitutes a valid and binding agreement of the Borrower and the Notes constitute valid and binding obligations of the Borrower, in each case enforceable against the Borrower in accordance with their respective terms, except as the same may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and similar laws affecting creditors' rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law). We are members of the Bar of the State of New York and the foregoing opinion is limited to the laws of the State of New York, the federal laws of the United States of America and the General Corporation Law of the State of Delaware. In giving the foregoing opinion, we express no opinion as to the effect (if any) of any law of any jurisdiction (except the State of New York) in which any Bank is located which limits the rate of interest that such Bank may charge or collect. This opinion is rendered solely to you in connection with the above matter. This opinion may not be relied upon by you for any other purpose or relied upon by any other person without our prior written consent. Very truly yours, C-2 EXHIBIT D ASSIGNMENT AND ASSUMPTION AGREEMENT AGREEMENT dated as of _________, ____ among [ASSIGNOR] (the "ASSIGNOR"), [ASSIGNEE] (the "ASSIGNEE"), AT&T CAPITAL CORPORATION (the "BORROWER") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent (the "AGENT"). W I T N E S S E T H WHEREAS, this Assignment and Assumption Agreement (the "AGREEMENT") relates to the $765,000,000 Credit Agreement dated as of April 13, 1998 among the Borrower, Newcourt Credit Group Inc., Newcourt Credit Group USA Inc., the Assignor and the other Banks party thereto, as Banks, the Agent, Canadian Imperial Bank of Commerce, as Syndication Agent, The Chase Manhattan Bank and Deutsche Bank AG, New York Branch, as Co-Documentation Agents and J.P. Morgan Securities Inc. and CIBC Oppenheimer Corp., as Arrangers (as amended, the "CREDIT AGREEMENT") and is done pursuant to Section 10.06(c) of the Credit Agreement and contemporaneously with an assignment under the AT&T 364-Day Credit Agreement, if such AT&T 364-Day Credit Agreement is in effect at such time; WHEREAS, as provided under the Credit Agreement, the Assignor has a Commitment to make Committed Loans to the Borrower in an aggregate principal amount at any time outstanding not to exceed $__________; WHEREAS, [Committed] Loans made to the Borrower by the Assignor under the Credit Agreement in the aggregate principal amount of $__________ are outstanding at the date hereof; and WHEREAS, the Assignor proposes to assign to the Assignee all of the rights of the Assignor under the Credit Agreement in respect of a portion of its Commitment thereunder in an amount equal to $__________ (the "ASSIGNED AMOUNT"), together with a corresponding portion of its outstanding [Committed] Loans, and the Assignee proposes to accept assignment of such rights and assume the corresponding obligations from the Assignor on such terms; NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, the parties hereto agree as follows: SECTION 1. Definitions. All capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Credit Agreement. SECTION 2. Assignment. The Assignor hereby assigns and sells to the Assignee all of the rights of the Assignor under the Credit Agreement to the extent of the Assigned Amount, and the Assignee hereby accepts such assignment from the Assignor and assumes all of the obligations of the Assignor under the Credit Agreement to the extent of the Assigned Amount, including the purchase from the Assignor of the corresponding portion of the principal amount of the [Committed] Loans made by the Assignor outstanding at the date hereof. Upon the execution and delivery hereof by the Assignor, the Assignee, the Borrower and the Agent and the payment of the amounts specified in Section 3 hereof required to be paid on the date hereof (i) the Assignee shall, as of the date hereof, succeed to the rights and be obligated to perform the obligations of a Bank under the Credit Agreement with a Commitment in an amount equal to the Assigned Amount, and (ii) the Commitment of the Assignor shall, as of the date hereof, be reduced by a like amount and the Assignor released from its obligations under the Credit Agreement to the extent such obligations have been assumed by the Assignee. The assignment provided for herein shall be without recourse to the Assignor. SECTION 3. Payments. As consideration for the assignment and sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the date hereof in Federal funds the amount heretofore agreed between them. It is understood that commitment and/or facility fees accrued to the date hereof in respect of the Assigned Amount are for the account of the Assignor and such fees accruing from and including the date hereof are for the account of the Assignee. Each of the Assignor and the Assignee hereby agrees that if it receives any amount under the Credit Agreement which is for the account of the other party hereto, it shall receive the same for the account of such other party to the extent of such other party's interest therein and shall promptly pay the same to such other party. SECTION 4. Consent of the Borrower and the Agent. This Agreement is conditioned upon the consent of the Borrower and the Agent pursuant to Section 10.06(c) of the Credit Agreement. The execution of this Agreement by the Borrower and the Agent is evidence of this consent. Pursuant to Section 10.06(c) the Borrower agrees to execute and deliver a Note payable to the order of the Assignee to evidence the assignment and assumption provided for herein. SECTION 5. Non-Reliance on Assignor. The Assignor makes no representation or warranty in connection with, and shall have no responsibility D-2 with respect to, the solvency, financial condition, or statements of the Borrower, or the validity and enforceability of the obligations of the Borrower in respect of the Credit Agreement or any Note. The Assignee acknowledges that it has, independently and without reliance on the Assignor, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and will continue to be responsible for making its own independent appraisal of the business, affairs and financial condition of the Borrower. SECTION 6. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. SECTION 7. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written. [ASSIGNOR] By__________________________________________ Title: [ASSIGNEE] By__________________________________________ Title: AT&T CAPITAL CORPORATION By__________________________________________ Title: MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent D-3 By__________________________________________ Title: D-4 EXHIBIT E TERMS OF SUBORDINATION(1) Section 1. SUBORDINATION TO SUPERIOR DEBT. Newcourt and the lender of the Subordinated Debt (the "LENDER") agree for the benefit of the holders of the Superior Debt that the Subordinated Debt shall, to the extent hereinafter set forth, be subordinate and junior in right of payment to all Superior Debt of Newcourt. Section 2. NEWCOURT NOT TO MAKE PAYMENTS HEREUNDER IN CERTAIN CIRCUMSTANCES. (a) Upon the maturity of all or any part of the Superior Debt by lapse of time, acceleration or otherwise, such Superior Debt shall first be paid in full in cash, or such payment shall be duly provided for in a manner satisfactory to the holders of such Superior Debt, before any payment by Newcourt is made on account of the principal of or premium, if any, or interest on the notes issued hereunder (the "SUBORDINATED NOTES") or to acquire any of the Subordinated Notes or on account of any sinking fund for the Subordinated Notes. (b) In the event and during the continuation of any Event of Default or any event or condition that, with the giving of notice or the lapse of time or both, would become an Event of Default (as such term is defined in the Credit Agreement) (each such Event of Default or any such event or condition that, with the giving of notice or the lapse of time, or both, being referred to in this Agreement as a "SUPERIOR DEBT DEFAULT"), (i) no payment shall be made by Newcourt on or with respect to the principal of, or, premium, if any, or interest on, the Subordinated Notes or to acquire any Subordinated Notes or on account of any sinking hind for the Subordinated Notes unless and until such Superior Debt Default shall have been remedied, nor shall any such payment be made if after giving effect, as if paid, to such payment, any Superior Debt Default would exist and (ii) no holder of Subordinated Notes shall demand, accept or receive, any direct or indirect payment (in cash or property or by setoff, exercise of contractual - ---------- (1) These Terms of Subordination refer to the $765,000,000 Credit Agreement (as amended from time to time, the "CREDIT AGREEMENT") dated as of April 13, 1998 among AT&T Capital Corporation, Newcourt Credit Group Inc., Newcourt Credit Group USA Inc., the banks parties thereto, Morgan Guaranty Trust Company of New York, as Administrative Agent, Canadian Imperial Bank of Commerce, as Syndication Agent, The Chase Manhattan Bank and Deutsche Bank AG, New York Branch, as Co-Documentation Agents and J.P. Morgan Securities Inc. and CIBC Oppenheimer Corp., as Arrangers and the AT&T 364-Day Credit Agreement and the Newcourt Credit Agreement. Capitalized terms used but not defined herein are used herein as defined in the Credit Agreement. Without limitation of the foregoing, the term "SUPERIOR DEBT" is defined in the definition of "SUBORDINATED DEBT" in the Credit Agreement. or statutory rights or otherwise) of or on account of any Subordinated Notes, notwithstanding the terms of the Subordinated Notes or of any agreement or instrument which governs the Subordinated Notes, and no such payment shall be due. (c) Unless and until all principal of, premium, if any, and interest on, and all other obligations of Newcourt under, the Superior Debt shall have been paid in full, no holder of Subordinated Notes will commence or maintain any action, suit or any other legal or equitable proceeding against Newcourt, or join with any creditor in any such proceeding, under any insolvency, bankruptcy, receivership, liquidation, reorganization or other similar law, unless the holders of Superior Debt shall also join in bringing such proceeding, provided that this Section 2(c) shall not prohibit a holder of Subordinated Notes from filing a proof of claim or otherwise participating in any such proceeding not commenced by it. Section 3. SUBORDINATED NOTES SUBORDINATED TO PRIOR PAYMENT OF ALL SUPERIOR DEBT ON DISSOLUTION, LIQUIDATION OR REORGANIZATION OF NEWCOURT. In the event of any insolvency or bankruptcy proceedings, and any receivership, liquidation, reorganization or other similar proceedings in connection therewith, relative to Newcourt or to its creditors, in their capacity as creditors of Newcourt, or to substantially all of its property, and in the event of any proceedings for voluntary liquidation, dissolution or other winding up of Newcourt, whether or not involving insolvency or bankruptcy, then: (a) the holders of all Superior Debt shall first be entitled to receive payment in full in cash of the principal thereof, premium, if any, interest and all other amounts payable thereon (accruing before and after the commencement of the proceedings whether or not allowed or allowable in any such proceedings) before the holders of the Subordinated Notes are entitled to receive any payment on account of the principal of, premium, if any, or interest on the Subordinated Notes; and (b) all Subordinated Notes shall forthwith (notwithstanding the terms of Section 2) become due and payable and any payment or distribution of assets of Newcourt of any kind or character, whether in cash, property or securities to which the holders of the Subordinated Notes would be entitled, but for the provisions of these Terms of Subordination, shall be paid or distributed by the liquidating trustee or agent or other person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or other trustee or agent, directly to the Agent or any other representative on behalf of the holders of Superior Debt, to the extent necessary to make payment in full of all principal, premium, if any, interest and all other amounts payable on all Superior Debt remaining unpaid, after giving E-2 effect to any concurrent payment or distribution to the holders of the Superior Debt. Section 4. RIGHTS OF HOLDERS OF SUPERIOR DEBT; SUBROGATION. (a) Should any payment or distribution or security or the proceeds of any thereof be collected or received by any holder of Subordinated Notes in respect of the Subordinated Notes, and such collection or receipt is prohibited hereunder prior to the payment in full of the Superior Debt, such holder will forthwith deliver the same to the Agent for the equal and ratable benefit of the holders of the Superior Debt in precisely the form received (except for the endorsement or the assignment of or by such holder where necessary) for application to payment of all Superior Debt in full, after giving effect to any concurrent payment or distribution to the holders of Superior Debt and, until so delivered, the same shall be held in trust by such holder as the property of the holders of the Superior Debt. (b) All payments and distributions received by the Agent in respect of the Subordinated Notes, to the extent received in or converted into cash, may be applied by the Agent first to the payment of any and all reasonable out-of-pocket expenses (including attorney's fees and legal expenses) paid or incurred by the Agent or such representative in enforcing the provisions hereof or in endeavoring to collect or realize upon the Subordinated Notes or any security therefor, and any balance thereof shall, solely as between any holder of the Subordinated Notes, on the one hand, and the holders of the Superior Debt, on the other hand, be applied by the Agent in such order of application as the Agent may from time to time select, toward the payment of the Superior Debt remaining unpaid. (c) No holder of Subordinated Notes shall be subrogated to the rights of the holders of the Superior Debt to receive payments or distributions of assets of Newcourt until all amounts payable with respect to the Superior Debt shall be paid in full; and, for the purposes of such subrogation, no payments or distributions to the holders of the Superior Debt of any cash, property or securities to which any holder of Subordinated Notes would be entitled except for these provisions shall, as between Newcourt, its creditors other than the holders of the Superior Debt, and such holders of Subordinated Notes, be deemed to be a payment by Newcourt to or on account of the Superior Debt. The provisions of this Agreement are and are intended solely for the purpose of defining the relative rights of holders of Subordinated Notes, on the one hand, and the holders of the Superior Debt, on the other hand. (d) Subject to the payment in full of all Superior Debt, the holders of the Subordinated Notes shall be subrogated (equally and ratably with the holders of all subordinated indebtedness of Newcourt which, by its terms, is not superior in right of payment to the Subordinated Notes, and ranks on a parity with the Subordinated E-3 Notes) to the rights of the holders of Superior Debt to receive payments or distributions of cash, property or securities of Newcourt applicable to the Superior Debt until all amounts owing on the Subordinated Notes shall be paid in full. For purposes of such subrogation, no payments or distributions to the holders of the Subordinated Notes of cash, property, securities or other assets by virtue of the subrogation herein provided which otherwise would have been made to the holders of the Superior Debt shall, as between Newcourt, its creditors other than the holders of Superior Debt and the holders of the Subordinated Notes, be deemed to be a payment to or on account of the Subordinated Notes. The holders of Subordinated Notes agree that, in the event that all or any part of any payment made on account of the Superior Debt is recovered from the holders of Superior Debt as a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law, any payment or distribution received by the holders of Subordinated Notes on account of the Subordinated Notes at any time after the date of the payment so recovered, whether pursuant to the right of subrogation provided for in this Section 4(d) or otherwise, shall be deemed to have been received by such holders of Subordinated Notes in trust as the property of the holders of the Superior Debt and such holders shall forthwith deliver the same to the Agent for the equal and ratable benefit of the holders of the Superior Debt for application to payment of all Superior Debt in full. Section 5. RENEWALS, EXTENSIONS AND INCREASES OF SUPERIOR DEBT. Each holder of Subordinated Notes by his acceptance thereof thereby waives any and all notice of renewal, extension, accrual or increase in the amount of any of the Superior Debt, present or future, and agrees and consents that without notice to or assent by any holder or holders of the Subordinated Notes: (i) the obligation and liabilities of Newcourt or any other party or parties for or upon the Superior Debt (or any promissory note, security document or guaranty evidencing or securing the same) may, from time to time, in whole or in part, be renewed, extended, increased, modified, amended, accelerated, compromised, supplemented, tenninated, sold, exchanged, waived or released; (ii) the Agent or any other representative acting on behalf of the holders of the Superior Debt and the holders of the Superior Debt may exercise or refrain from exercising any right, remedy or power granted by or in connection with any agreements relating to the Superior Debt; and (iii) any balance or balances of funds with any holders of the Superior Debt at any time standing to the credit of Newcourt may, from time to time, in whole or in part, be surrendered or released; E-4 all as the Agent or any other representative or representatives acting on behalf of the holders of the Superior Debt and the holders of the Superior Debt may deem advisable and all without impairing, abridging, diminishing, releasing or affecting the subordination of the Subordinated Notes to the Superior Debt provided for herein. Section 6. OBLIGATION OF NEWCOURT UNCONDITIONAL. Nothing contained in these Terms of Subordination or in the Subordinated Notes is intended to or shall impair, as between Newcourt, its creditors other than the holders of the Superior Debt, and the holders of the Subordinated Notes, the obligation of Newcourt, which is absolute and unconditional, to pay to the holders of the Subordinated Notes the principal of, premium, if any, and interest on the Subordinated Notes, as and when the same shall become due and payable (except as provided in Section 2), by lapse of time, acceleration or otherwise, in accordance with their terms, or is intended to or shall affect the relative rights of the holders of the Subordinated Notes and other creditors of Newcourt other than the holders of the Superior Debt, nor shall anything herein or therein prevent the trustee or the holder of any Subordinated Notes (i) from taking all appropriate actions to preserve its rights under the Subordinated Notes not inconsistent with the rights of the holders of the Superior Debt under these Terms of Subordination, or (ii) from exercising all remedies otherwise permitted by applicable law upon default under the Subordinated Notes, subject to the rights, if any, of the holders of the Superior Debt under Section 2 of these Terms of Subordination and in respect of cash, property or securities of Newcourt otherwise payable or delivered to such holders of Subordinated Notes upon the exercise of any such remedy. Section 7. MISCELLANEOUS. (a) Each holder of Subordinated Notes by its acceptance thereof thereby acknowledges and agrees that the holders of the Superior Debt have relied upon and will continue to rely upon the subordination provided for herein in entering into the agreements relating to Superior Debt and in extending credit to Newcourt and its Subsidiaries pursuant thereto. (b) No present or future holder of Superior Debt shall be prejudiced in his right to enforce the subordination contained herein in accordance with the terms hereof by any act or failure to act on the part of Newcourt or any holder of the Subordinated Notes. The subordination provisions contained herein are for the benefit of the holders of the Superior Debt from time to time and, so long as Superior Debt is outstanding under any agreement, may not be rescinded, canceled or modified in any way without the prior written consent thereto of all holders of Superior Debt. (c) The subordination provisions hereof shall be binding upon any holder of the Subordinated Notes and upon the heirs, legal representatives, successors and E-5 assigns of any holder of the Subordinated Notes; and, to the extent that any holder of the Subordinated Notes is either a partnership or a corporation, all references herein to any holder of the Subordinated Notes shall be deemed to include any successor or successors, whether immediate or remote, to such partnership or corporation. (d) These Terms of Subordination shall be construed in accordance with and governed by the laws of the State of New York. E-6 EXHIBIT F TERMS OF GUARANTY(1) SECTION 1. THE GUARANTY. The Guarantor hereby unconditionally guarantees the full and punctual payment (whether at stated maturity, upon acceleration or otherwise) of the principal of and interest on each note issued by AT&T Capital Corporation and Newcourt pursuant to the Newcourt Agreements, and the full and punctual payment of all other amounts payable by AT&T Capital Corporation and Newcourt under the Newcourt Agreements. Upon failure by AT&T Capital Corporation or Newcourt to pay punctually any such amount, the Guarantor agrees that it shall forthwith on demand pay the amount not so paid at the place and in the manner specified in the Newcourt Agreements. SECTION 2. GUARANTY UNCONDITIONAL. The obligations of the Guarantor hereunder shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by: (a) any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of AT&T Capital Corporation or Newcourt under the Newcourt Agreements or any note thereunder, by operation of law or otherwise; (b) any modification or amendment of or supplement to the Newcourt Agreements or any note thereunder; (c) any release, impairment, non-perfection or invalidity of any direct or indirect security for any obligation of AT&T Capital Corporation or Newcourt under the Newcourt Agreements or any note thereunder; - ---------- (1) These Terms of Guaranty refer to the $765,000,000 Credit Agreement (as amended from time to time, the "CREDIT AGREEMENT") dated as of April 13, 1998 among AT&T Capital Corporation, Newcourt Credit Group Inc., Newcourt Credit Group USA Inc., the banks parties thereto, Morgan Guaranty Trust Company of New York, as Administrative Agent, Canadian Imperial Bank of Commerce, as Syndication Agent, The Chase Manhattan Bank and Deutsche Bank AG, New York Branch, as Co-Documentation Agents and J.P. Morgan Securities Inc. and CIBC Oppenheimer Corp., as Arrangers and the AT&T 364-Day Credit Agreement and the Newcourt Credit Agreement. Capitalized terms used but not defined herein are used herein as defined in the Credit Agreement. (d) any change in the corporate existence, structure or ownership of AT&T Capital Corporation or Newcourt or any insolvency, bankruptcy, reorganization or other similar proceeding affecting AT&T Capital Corporation or Newcourt or their assets or any resulting release or discharge of any obligation of AT&T Capital Corporation or Newcourt contained in the Newcourt Agreements or any note thereunder; (e) the existence of any claim, set-off or other rights which the Guarantor may have at any time against AT&T Capital Corporation, Newcourt, the Agent, any Bank or any other Person, whether in connection with the Newcourt Agreements or any unrelated transactions, PROVIDED that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim; (f) any invalidity or unenforceability relating to or against AT&T Capital Corporation or Newcourt for any reason of any of the Newcourt Agreements or any note thereunder or any provision of applicable law or regulation purporting to prohibit the payment by AT&T Capital Corporation or Newcourt of the principal of or interest on any note or any other amount payable by AT&T Capital Corporation or Newcourt under the Newcourt Agreements; or (g) any other act or omission to act or delay of any kind by AT&T Capital Corporation, Newcourt, the Agent, any Bank or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of or defense to the Guarantor's obligations hereunder. SECTION 3. DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN CERTAIN CIRCUMSTANCES. The Guarantor's obligations hereunder shall remain in full force and effect until the "Commitments" under the Newcourt Agreements shall have terminated and the principal of and interest on the notes and all other amounts payable by AT&T Capital Corporation and Newcourt under the Newcourt Agreements shall have been paid in full. If at any time any payment of the principal of or interest on any note or any other amount payable by AT&T Capital Corporation or Newcourt under the Newcourt Agreements is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of AT&T Capital Corporation or Newcourt or otherwise, the Guarantor's obligations hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such time. SECTION 4. WAIVER BY THE GUARANTOR. The Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for F-2 EX-10.10 12 a2069484zex-10_10.txt EXHIBIT 10.10 Exhibit 10.10 EXECUTION COPY AMENDMENT NO. 1 TO CREDIT AGREEMENT AMENDMENT dated as of April 9, 1999 to the Credit Agreement dated as of April 13, 1998 (the "CREDIT AGREEMENT") among AT&T CAPITAL CORPORATION (the "BORROWER"), the BANKS party thereto (the "BANKS") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent (the "ADMINISTRATIVE AGENT"). W I T N E S S E T H: WHEREAS, the parties hereto desire to amend the Credit Agreement as more fully set forth below; NOW, THEREFORE, the parties hereto agree as follows: SECTION 1. DEFINED TERMS; REFERENCES. Unless otherwise specifically defined herein, each term used herein which is defined in the Credit Agreement has the meaning assigned to such term in the Credit Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference and each reference to "this Agreement" and each other similar reference contained in the Credit Agreement shall, after this Amendment becomes effective, refer to the Credit Agreement as amended hereby. SECTION 2. AMENDMENTS TO SECTION 1.01 OF THE CREDIT AGREEMENT. (a) The definition of "Applicable Margin" set forth in Section 1.01 of the Credit Agreement is hereby deleted in its entirety. (b) The definition of "Termination Date" set forth in Section 1.01 of the Credit Agreement is amended to read in its entirety as follows: "TERMINATION DATE" means the earlier of (i) April 13, 2003, or (ii) unless the Required Banks shall have agreed in writing that this clause (ii) shall not apply, the date falling 60 days after the date of consummation of the CIT Acquisition, or if either such day is not a Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day. (c) The definition of "Unsecured Debt" in Section 1.01 of the Credit Agreement is amended by the addition of the following proviso: ; PROVIDED that Newcourt may, at its election exercisable by notice to the Agent, treat Debt of a Restricted Subsidiary which would otherwise constitute Unsecured Debt as Debt secured by a Lien for purposes of this Agreement, in which case (i) Section 5.13 shall not be applicable to such Debt and (ii) such Debt shall be deemed secured by a Lien permitted only by Section 5.07(m) for so long as such Debt is outstanding. (d) The following new defined terms are added to Section 1.01 of the Credit Agreement in appropriate alphabetical order: "BASE RATE MARGIN" has the meaning set forth in Section 2.06(g). "CIT ACQUISITION" means the proposed acquisition of Newcourt by The CIT Group, Inc. publicly announced on March 8, 1999. "EURO-DOLLAR MARGIN" has the meaning set forth in Section 2.06(f). SECTION 3. AMENDMENTS TO SECTION 2.06 OF THE CREDIT AGREEMENT. Section 2.06 of the Credit Agreement is amended by: (a) replacing the words "at a rate per annum equal to the Base Rate for such day" in the first sentence of subsection (a) of Section 2.06 of the Credit Agreement with the words "at a rate per annum equal to the sum of the Base Rate plus the Base Rate Margin for such day"; (b) replacing the term "Applicable Margin" in subsection (b) of Section 2.06 of the Credit Agreement with the term "Euro-Dollar Margin"; (c) replacing the existing subsection (f) of Section 2.06 of the Credit Agreement in its entirety with the following text and table: (f) The "EURO-DOLLAR MARGIN" with respect to any Euro-Dollar Loan at any date is the applicable percentage amount set forth in the table below based on the Status and Usage on such date.
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V LEVEL VI STATUS STATUS STATUS STATUS STATUS STATUS ------- -------- --------- -------- ------- -------- Euro-Dollar Loans Usage less than 33% .......... 0.210% 0.250% 0.390% 0.480% 0.725% 1.050% 33% less than or equal to Usage less than or equal to 66% ............... 0.310% 0.350% 0.515% 0.605% 0.850% 1.175% Usage greater than 66% ....... 0.410% 0.450% 0.640% 0.730% 0.975% 1.300%
2 (d) adding the following new subsection (g) immediately after subsection (f) of Section 2.06 of the Credit Agreement: (g) The "BASE RATE MARGIN" with respect to any Base Rate Loan at any date is the applicable percentage amount set forth in the table below based on the Status and Usage on such date.
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V LEVEL VI STATUS STATUS STATUS STATUS STATUS STATUS ------- -------- --------- -------- ------- -------- Base Rate Loans Usage less than 33% .......... 0.000% 0.000% 0.000% 0.000% 0.000% 0.050% 33% less than or equal to Usage less than or equal to 66% ..................... 0.000% 0.000% 0.000% 0.000% 0.000% 0.175% Usage greater than 66% ....... 0.000% 0.000% 0.000% 0.000% 0.000% 0.300%
; and (e) the percentage "50%" in the definition of "Usage" in Section 2.06 of the Credit Agreement is replaced with the percentage "66%". SECTION 4. AMENDMENTS TO SECTION 2.12 OF THE CREDIT AGREEMENT. Section 2.12 of the Credit Agreement is amended by replacing the term "Applicable Margin" with the term "Euro-Dollar Margin". SECTION 5. AMENDMENTS TO NEGATIVE PLEDGE. (a) Each time the words "date of this Agreement" appears in subsection (a) of Section 5.07 of the Credit Agreement, it is replaced by the date "April 13, 1998". (b) Subsection (g) of Section 5.07 of the Credit Agreement is amended to read in its entirety as follows: (g) Liens on Accounts Receivable of Newcourt, the Borrower or any Restricted Subsidiary arising from or in connection with transactions entered into by Newcourt, the Borrower or such Restricted Subsidiary after April 13, 1998, or on Accounts Receivable acquired by Newcourt, the Borrower or such Restricted Subsidiary from others, after April 13, 1998, which Liens are created as a result of any guarantee, repurchase or other contingent (direct or indirect) or recourse obligation of Newcourt, the Borrower or such Restricted Subsidiary in connection with the discounting, sale, assignment, transfer or other disposition of such Accounts Receivable or any interest therein, or to secure or provide for the payment of all or any part of the investment of Newcourt, the Borrower or such Restricted Subsidiary in any such Accounts Receivable (whether or not such Accounts Receivable are the Accounts Receivable on which such Liens are created) or the purchase price thereof or to secure any debt (including, without 3 limitation, Non-Recourse Debt) issued, incurred, assumed or guaranteed for the purpose of financing or refinancing all or any part of such investment in or purchase price of such Accounts Receivable (whether or not such Accounts Receivable are the Accounts Receivable on which such Liens are created); (c) The percentage "10%" in subsection (m) of Section 5.07 of the Credit Agreement is replaced by the percentage "15%". SECTION 6. AMENDMENTS TO SECTION 5.13 OF THE CREDIT AGREEMENT. The words "other than the Borrower or Newcourt USA," is added immediately after clause (y) in Section 5.13 of the Credit Agreement. SECTION 7. AMENDMENTS TO SECTION 6.01 OF THE CREDIT AGREEMENT. (a) The term "Newcourt Holdings USA" is deleted from subsection (i) of Section 6.01 of the Credit Agreement. (b) The phrase "except as a consequence of the consummation of the CIT Acquisition," is added immediately before the words "any person" in subsection (j) of Section 6.01 of the Credit Agreement. SECTION 8. REPRESENTATIONS OF BORROWER. The Borrower represents and warrants that (i) the representations and warranties of the Borrower set forth in Article 4 of the Credit Agreement will be true on and as of the Amendment Effective Date and (ii) no Default will have occurred and be continuing on such date. SECTION 9. GOVERNING LAW. This Amendment shall be governed by and construed in accordance with the laws of the State of New York. SECTION 10. COUNTERPARTS. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. SECTION 11. EFFECTIVENESS. This Amendment shall become effective as of the date hereof on the date when (the "AMENDMENT EFFECTIVE DATE") the Administrative Agent shall have received from each of the Borrower and the Required Banks a counterpart hereof signed by such party or facsimile or other written confirmation (in form satisfactory to the Administrative Agent) that such party has signed a counterpart hereof. 4 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. AT&T CAPITAL CORPORATION By /s/ Glenn A. Votek -------------------------------------- Name: Glenn A. Votek Title: Executive Vice President & Treasurer MORGAN GUARANTY TRUST COMPANY OF NEW YORK By -------------------------------------- Name: Title: CANADIAN IMPERIAL BANK OF COMMERCE By -------------------------------------- Name: Title: DEUTSCHE BANK AG, NEW YORK BRANCH AND/OR CAYMAN ISLANDS BRANCH By -------------------------------------- Name: Title: By -------------------------------------- Name: Title: IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. AT&T CAPITAL CORPORATION By -------------------------------------- Name: Title: MORGAN GUARANTY TRUST COMPANY OF NEW YORK By /s/ Maria H. Dell'Aquila -------------------------------------- Name: MARIA H. DELL'AQUILA Title: VICE PRESIDENT CANADIAN IMPERIAL BANK OF COMMERCE By -------------------------------------- Name: Title: DEUTSCHE BANK AG, NEW YORK BRANCH AND/OR CAYMAN ISLANDS BRANCH By -------------------------------------- Name: Title: By -------------------------------------- Name: Title: IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. AT&T CAPITAL CORPORATION By ----------------------------------------- Name: Title: MORGAN GUARANTY TRUST COMPANY OF NEW YORK By ----------------------------------------- Name: Title: CANADIAN IMPERIAL BANK OF COMMERCE By /s/ Gerald Girardi ----------------------------------------- Name: GERALD GIRARDI Title: EXECUTIVE DIRECTOR CIBC Oppenheimer Corp., AS AGENT DEUTSCHE BANK AG, NEW YORK BRANCH AND/OR CAYMAN ISLANDS BRANCH By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. AT&T CAPITAL CORPORATION By ----------------------------------------- Name: Title: MORGAN GUARANTY TRUST COMPANY OF NEW YORK By ----------------------------------------- Name: Title: CANADIAN IMPERIAL BANK OF COMMERCE By ----------------------------------------- Name: Title: DEUTSCHE BANK AG, NEW YORK BRANCH AND/OR CAYMAN ISLANDS BRANCH By /s/ Suzanne R. Kissling ----------------------------------------- Name: Suzanne R. Kissling Title: MANAGING DIRECTOR By /s/ John R. McGill ----------------------------------------- Name: John R. McGill Title: Director THE CHASE MANHATTAN BANK By /s/ Roger Parker ----------------------------------------- Name: Roger Parker Title: Vice President BANK OF AMERICA NT & SA By ----------------------------------------- Name: Title: BARCLAYS BANK PLC By ----------------------------------------- Name: Title: CREDIT LYONNAIS By ----------------------------------------- Name: Title: THE CHASE MANHATTAN BANK By ----------------------------------------- Name: Title: BANK OF AMERICA NT & SA By /s/ Nelson Albrecht ----------------------------------------- Name: Nelson Albrecht Title: Vice President BARCLAYS BANK PLC By ----------------------------------------- Name: Title: CREDIT LYONNAIS By ----------------------------------------- Name: Title: THE CHASE MANHATTAN BANK By ----------------------------------------- Name: Title: BANK OF AMERICA NT & SA By ----------------------------------------- Name: Title: BARCLAYS BANK PLC By /s/ Douglas A. Butler ----------------------------------------- Name: Douglas A. Butler Title: Director CREDIT LYONNAIS By ----------------------------------------- Name: Title: THE CHASE MANHATTAN BANK By ----------------------------------------- Name: Title: BANK OF AMERICA NT & SA By ----------------------------------------- Name: Title: BARCLAYS BANK PLC By ----------------------------------------- Name: Title: CREDIT LYONNAIS NEW YORK BRANCH By /s/ Sebastian Rocco ----------------------------------------- Name: Sebastian Rocco Title: Senior Vice President DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES By ----------------------------------------- Name: Title: First Vice President By /s/ Jonathan Wallin ----------------------------------------- Name: JONATHAN WALLIN Title: VICE PRESIDENT FIRST UNION NATIONAL BANK By ----------------------------------------- Name: Title: THE FIRST NATIONAL BANK OF CHICAGO By ----------------------------------------- Name: Title: FLEET BANK, N.A. By ----------------------------------------- Name: Title: DRESDENER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: FIRST UNION NATIONAL BANK By /s/ Jane W. Workman ----------------------------------------- Name: JANE W. WORKMAN Title: SENIOR VICE PRESIDENT THE FIRST NATIONAL BANK OF CHICAGO By ----------------------------------------- Name: Title: FLEET BANK, N.A. By ----------------------------------------- Name: Title: DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: FIRST UNION NATIONAL BANK By ----------------------------------------- Name: Title: THE FIRST NATIONAL BANK OF CHICAGO By /s/ Cory M. Helfand ----------------------------------------- Name: CORY M. HELFAND Title: VICE PRESIDENT FLEET BANK, N.A. By ----------------------------------------- Name: Title: HSBC BANK USA By /s/ Mark J. Rakov ----------------------------------------- Name: Mark J. Rakov Title: Vice President NATIONAL AUSTRALIA BANK LIMITED By ----------------------------------------- Name: Title: ROYAL BANK OF CANADA By ----------------------------------------- Name: Title: THE BANK OF NOVA SCOTIA By ----------------------------------------- Name: Title: HSBC BANK USA By ----------------------------------------- Name: Title: NATIONAL AUSTRALIA BANK LIMITED By /s/ R. Adams Perry ----------------------------------------- Name: R. Adams Perry Title: Sr. Vice President ROYAL BANK OF CANADA By ----------------------------------------- Name: Title: THE BANK OF NOVA SCOTIA By ----------------------------------------- Name: Title: HSBC BANK USA By ----------------------------------------- Name: Title: NATIONAL AUSTRALIA BANK LIMITED By ----------------------------------------- Name: Title: ROYAL BANK OF CANADA By /s/ C.W. Evans ----------------------------------------- Name: C.W. EVANS Title: SENIOR MANAGER THE BANK OF NOVA SCOTIA By ----------------------------------------- Name: Title: HSBC BANK USA By ----------------------------------------- Name: Title: NATIONAL AUSTRALIA BANK LIMITED By ----------------------------------------- Name: Title: ROYAL BANK OF CANADA By ----------------------------------------- Name: Title: THE BANK OF NOVA SCOTIA By /s/ Paul A. Schultz ----------------------------------------- Name: PAUL A. SCHULTZ Title: V.P. TORONTO DOMINION (TEXAS), INC. By ----------------------------------------- Name: Title: VICE PRESIDENT By /s/ Jimmy Simien ----------------------------------------- Name: Jimmy Simien Title: Vice President THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH By ----------------------------------------- Name: Title: THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH By ----------------------------------------- Name: Title: DG BANK DEUTSCH GENOSSENSCHAFTSBANK AG By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: TORONTO DOMINION (TEXAS), INC. By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH By /s/ Takuya Honjo ----------------------------------------- Name: TAKUYA HONJO Title: SENIOR VICE PRESIDENT THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH By ----------------------------------------- Name: Title: DG BANK DEUTSCH GENOSSENSCHAFTSBANK AG By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: TORONTO DOMINION (TEXAS), INC. By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH By ----------------------------------------- Name: Title: THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH By /s/ J. Bruce Meredith ----------------------------------------- Name: J. Bruce Meredith Title: Senior Vice President DG BANK DEUTSCH GENOSSENSCHAFTSBANK AG By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: TORONTO DOMINION (TEXAS), INC. By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH By ----------------------------------------- Name: Title: THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH By ----------------------------------------- Name: Title: DG BANK DEUTSCH GENOSSENSCHAFTSBANK AG By /s/ Rob T. Jokhai ----------------------------------------- Name: Rob T. Jokhai Title: Assistant Vice President By /s/ William D. Casey ----------------------------------------- Name: WILLIAM D. CASEY Title: VICE PRESIDENT BANCA MONTE DEI PASCHI DI SIENA S.P.A. By ----------------------------------------- Name: Title: S.V.P. & General Manager By /s/ Brian R. Landy ----------------------------------------- Name: Brian R. Landy Title: Vice President BANK OF HAWAII By ----------------------------------------- Name: Title: BAYERISCHE HYPO-UND VEREINSBANK, AG, NEW YORK BRANCH By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: COMERICA BANK By ----------------------------------------- Name: Title: BANCA MONTE DEI PASCHI DI SIENA S.P.A. By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: BANK OF HAWAII By /s/ Donna R. Parker ----------------------------------------- Name: DONNA R. PARKER Title: Vice President BAYERISCHE HYPO-UND VEREINSBANK, AG, NEW YORK BRANCH By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: COMERICA BANK By ----------------------------------------- Name: Title: BANCA MONTE DEI PASCHI DI SIENA S.P.A. By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: BANK OF HAWAII By ----------------------------------------- Name: Title: BAYERISCHE HYPO-UND VEREINSBANK, AG, NEW YORK BRANCH By /s/ Marianne Weinzinger ----------------------------------------- Name: Marianne Weinzinger Title: Director By /s/ Pamela J. Gillons ----------------------------------------- Name: PAMELA J. GILLONS Title: ASSOCIATE DIRECTOR COMERICA BANK By ----------------------------------------- Name: Title: BANCA MONTE DEI PASCHI DI SIENA S.P.A. By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: BANK OF HAWAII By ----------------------------------------- Name: Title: BAYERISCHE HYPO-UND VEREINSBANK, AG, NEW YORK BRANCH By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: COMERICA BANK By /s/ Marian L. Enright ----------------------------------------- Name: MARIAN L. ENRIGHT Title: VICE PRESIDENT CREDIT SUISSE FIRST BOSTON By /s/ Andrea E. Shkane ----------------------------------------- Name: Andrea E. Shkane Title: Vice President By /s/ James Lee ----------------------------------------- Name: James Lee Title: Assistant Vice President CITIBANK, N.A. By ----------------------------------------- Name: Title: SOCIETE GENERALE By ----------------------------------------- Name: Title: THE BANK OF NEW YORK By ----------------------------------------- Name: Title: CREDIT SUISSE FIRST BOSTON By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: CITIBANK, N.A. By /s/ David L. Harris ----------------------------------------- Name: DAVID L. HARRIS Title: Vice President SOCIETE GENERALE By ----------------------------------------- Name: Title: THE BANK OF NEW YORK By ----------------------------------------- Name: Title: CREDIT SUISSE FIRST BOSTON By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: SALOMON BROTHERS HOLDING COMPANY INC. By ----------------------------------------- Name: Title: SOCIETE GENERALE By /s/ Russell S. Gorman ----------------------------------------- Name: Russell S. Gorman Title: Director THE BANK OF NEW YORK By ----------------------------------------- Name: Title: CREDIT SUISSE FIRST BOSTON By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: SALOMON BROTHERS HOLDING COMPANY INC. By ----------------------------------------- Name: Title: SOCIETE GENERALE By ----------------------------------------- Name: Title: THE BANK OF NEW YORK By /s/ Ernest Fung ----------------------------------------- Name: ERNEST FUNG Title: Vice President BANCO CENTRAL HISPANOAMERICANO S.A., NEW YORK BRANCH By /s/ Jose Castello ----------------------------------------- Name: Jose Castello Title: Executive Vice President and General Manager BANK AUSTRIA AKTIENGESELLSCHAFT By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: BANQUE NATIONALE DE PARIS By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: BANCO CENTRAL HISPANOAMERICANO S.A., NEW YORK BRANCH By ----------------------------------------- Name: Title: BANK AUSTRIA AKTIENGESELLSCHAFT By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: BANQUE NATIONALE DE PARIS By /s/ Veronique Marcus ----------------------------------------- Name: Veronique Marcus Title: Vice President By /s/ Phil Truesdale ----------------------------------------- Name: Phil Truesdale Title: Vice President PARIBAS, NEW YORK BRANCH By /s/ Sean Reddington ----------------------------------------- Name: Sean Reddington Title: Director By /s/ Kevin D'Albert ----------------------------------------- Name: Kevin D'Albert Title: Assistant Vice President BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS BRANCH By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: THE FUJI BANK, LIMITED, NEW YORK BRANCH By ----------------------------------------- Name: Title: UNION BANK OF CALIFORNIA, N.A. By ----------------------------------------- Name: Title: PARIBAS, NEW YORK BRANCH By ----------------------------------------- Name: Title: By ----------------------------------------- Name: Title: BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS BRANCH By /s/ Peter Obermann ----------------------------------------- Name: Peter Obermann Title: Senior Vice President By /s/ James H. Boyle ----------------------------------------- Name: James H. Boyle Title: Second Vice President THE FUJI BANK, LIMITED, NEW YORK BRANCH By ----------------------------------------- Name: Title: UNION BANK OF CALIFORNIA, N.A. By ----------------------------------------- Name: Title: EX-10.11 13 a2069484zex-10_11.txt EXHIBIT 10.11 Exhibit 10.11 AMENDMENT NO. 2 TO CREDIT AGREEMENT AMENDMENT NO. 2 dated November 15, 1999, to the $765,000,000 Credit Agreement dated as of April 13, 1998, as amended as of April 9, 1999 (as so amended, the "CREDIT AGREEMENT"), by and among (i) AT&T Capital Corporation, a Delaware corporation (the "BORROWER"), (ii) Newcourt Credit Group Inc., a Delaware corporation ("NEWCOURT"), and Newcourt Credit Group USA Inc., a Delaware corporation ("NEWCOURT USA"), as Guarantors, (iii) the banks and other financial institutions party thereto (the "BANKS"), (iv) Morgan Guaranty Trust Company of New York, as administrative agent (the "AGENT"), (v) Canadian Imperial Bank of Commerce, as syndication agent (the "SYNDICATION AGENT"), (vi) The Chase Manhattan Bank and Deutsche Bank AG, New York Branch, as co-documentation agents (the "DOCUMENTATION AGENTS"), and (vii) J.P. Morgan Securities Inc. and CIBC Oppenheimer Corp., as arrangers (the "ARRANGERS"). WHEREAS, pursuant to an Amended and Restated Agreement and Plan of Reorganization, dated as of August 5, 1999 (the "REORGANIZATION PLAN"), by and between Newcourt and The CIT Group, Inc., a Delaware corporation ("CIT"), the parties thereto have agreed to the acquisition of Newcourt by CIT, either directly or through one or more of CIT's wholly-owned subsidiaries; WHEREAS, subsequent to such acquisition, the common stock of all of the United States subsidiaries of Newcourt will be transferred directly to CIT or to one or more of CIT's wholly-owned subsidiaries (the "PHASE II REORGANIZATION"); WHEREAS, Newcourt, the Borrower and Newcourt USA wish to amend the Credit Agreement to permit the consummation of the transactions contemplated by the Reorganization Plan and the Phase II Reorganization, and in connection therewith CIT will execute a guaranty, substantially in the form of Exhibit A hereto, pursuant to which CIT will guarantee the obligations of Newcourt under the Credit Agreement as amended hereby and will agree to comply with certain covenants set forth in such guaranty; NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the parties hereto agree as follows: 1. DEFINITIONS. All terms used herein which are defined in the Credit Agreement and not otherwise defined herein are used herein as defined therein. 2. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is hereby amended as follows: 2.1 DEFINITIONS. (a) The definition of the term "Material Financial Obligations" in Section 1.01 of the Credit Agreement is hereby amended to read in its entirety as follows: ""MATERIAL FINANCIAL OBLIGATIONS" means a principal or face amount of Debt and/or payment obligations in respect of Derivatives Obligations of the Borrower, CIT and/or one or more of their Subsidiaries, arising in one or more related or unrelated transactions, exceeding in the aggregate US$100,000,000 (or its equivalent in any other currency)." (b) The definition of the term "Material Subsidiary" in Section 1.01 of the Credit Agreement is hereby amended to read in its entirety as follows: ""MATERIAL SUBSIDIARY" means at any time each subsidiary of Newcourt that is a "SIGNIFICANT SUBSIDIARY", as defined in Rule 1-02 of Regulation S-X promulgated under the SECURITIES EXCHANGE ACT OF 1934, as amended, as such Regulation is in effect on the date hereof." (c) The definition of the term "Termination Date" in Section 1.01 of the Credit Agreement is hereby amended to read in its entirety as follows: ""TERMINATION DATE" means April 13, 2003, or if such day is not a Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day." (d) Section 1.01 of the Credit Agreement is hereby amended by adding the following new definitions, to be inserted in appropriate alphabetical order: ""CIT" means The CIT Group, Inc., a Delaware corporation, and its successors." ""CIT GUARANTY" means the Guaranty dated November 15, 1999, made by CIT in favor of the Agent." ""REORGANIZATION EFFECTIVE TIME" means the Effective Time, as defined in the Amended and Restated Agreement and Plan of Reorganization, dated as of August 5, 1999, by and between the Borrower and CIT." 2.2 AMENDMENT TO SECTION 3.02. Section 3.02(d) of the Credit Agreement is hereby amended to read in its entirety as follows: "The representations and warranties of CIT contained in the CIT Guaranty shall be true in all material respects on and as of the date of such Borrowing, and the representations and warranties of the Borrower and AT&T contained in this Agreement (except the representation and warranty set forth in Section 4.04(d)) shall be true in all material respects on and as of the date of such Borrowing." 2.3 COVENANTS. Sections 5.01, 5.03, 5.04, 5.05, 5.06, 5.07, 5.08 and 5.13 of the Credit Agreement are hereby deleted in their entirety. - 2 - 2.4 EVENTS OF DEFAULT. (a) Sections 6.01(e), (g), (h) and (k) of the Credit Agreement are hereby amended by adding after "Newcourt" the following: ", CIT". (b) Section 6.01 of the Credit Agreement is hereby amended by adding the following new subsections after the end of subsection (l): "(m) CIT shall default in the observance or performance of any agreement contained in subsections 6.1, 6.2 or 6.3 of the CIT Credit Agreement (as defined in Section 6 of the CIT Guaranty), as such subsections are incorporated by reference in the CIT Guaranty or the event described in Section 7(e) of the CIT Credit Agreement (as defined in Section 6 of the CIT Guaranty) shall occur; (n) CIT shall default in the observance or performance of any other agreement contained in, or incorporated by reference in, the CIT Guaranty (other than as provided in subsection (m) above), and such default shall continue unremedied for a period of 30 days after notice shall have been given to CIT by the Agent; (o) The CIT Guaranty shall cease, for any reason (other than the express written release thereof by the Agent), to be in full force and effect, or CIT shall so assert in writing; (p) Any representation or warranty made by CIT in the CIT Guaranty shall prove to have been materially incorrect when made;" (c) Section 6.01(b) of the Credit Agreement is hereby amended in its entirety to read as follows: "(b) Newcourt shall fail to observe or perform any covenant contained in Section 5.02;" (d) Section 6.01(i) of the Credit Agreement is hereby deleted in its entirety, and the following hereby substituted therefor: "[intentionally] omitted]". 3. REPRESENTATIONS AND WARRANTIES. Each of Newcourt, the Borrower and Newcourt USA hereby represents and warrants as follows: (a) CORPORATE EXISTENCE AND POWER. Each Obligor (i) is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, and (ii) has all corporate power to execute, deliver and perform this Amendment and to perform the Credit Agreement, as amended hereby. - 3 - (b) CORPORATE AND GOVERNMENTAL AUTHORIZATION. NO CONTRAVENTION. (i) The execution, delivery and performance by the Borrower of this Amendment, and the performance of the Credit Agreement, as amended hereby, are within the Borrower's corporate power, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any governmental body, agency or official and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of the Borrower or of any material agreement, judgment, injunction, order, decree or other material instrument binding upon the Borrower or result in the creation or imposition of any Lien on any asset of the Borrower. (ii) The execution, delivery and performance by each Guarantor of this Amendment, and the performance of the Credit Agreement, as amended hereby, are within each Guarantor's corporate power, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any governmental body, agency or official, including, without limitation, any action by or in respect of, or filing with, any governmental body, agency or official required by exchange control regulations to enable Newcourt to pay its obligations under the Credit Agreement in Dollars at the office of the Agent in New York City, and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of any Guarantor or of any material agreement, judgment, injunction, order, decree or other material instrument binding upon any Guarantor or result in the creation or imposition of any Lien on any asset of any Guarantor. (c) ENFORCEABILITY OF LOAN DOCUMENTS. Each of this Amendment and the Credit Agreement, as amended hereby, constitutes a legal, valid and binding obligation of each Obligor, enforceable against such Obligor in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and similar laws affecting creditors' rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law). 4. CONDITIONS. This Amendment shall become effective as of the Reorganization Effective Time upon the satisfaction of the following conditions precedent: (a) The Agent shall have received this Amendment, duly executed by each Obligor and the Required Banks. (b) The Agent shall have received the CIT Guaranty, duly executed by CIT. (c) The Agent shall have received the satisfactory written legal opinion of counsel to CIT (which may be in-house counsel) with respect to the CIT Guaranty. - 4 - (d) The Agent shall have received a certificate of an officer of CIT having attached thereto a true and correct copy of the Certificate of Incorporation and By-Laws of CIT. (e) The Agent shall have received a good standing certificate from the Secretary of State evidencing the good standing of CIT in its jurisdiction of incorporation. (f) The Agent shall have received a copy of resolutions of the Board of Directors of CIT authorizing the execution and delivery of the CIT Guaranty. 5. ACKNOWLEDGMENT, WAIVER AND CONSENT. (a) Pursuant to the request of each Obligor and in accordance with Section 10.05 of the Credit Agreement, the Required Banks hereby consent to, and waive any noncompliance with or Event of Default arising under the Credit Agreement by reason of, (i) the consummation of the acquisition of Newcourt by CIT pursuant to the Reorganization Plan, or (ii) the Phase II Reorganization, including, without limitation, the waiver of any requirement that (A) CIT or one or more of its wholly-owned subsidiaries, as transferee of substantially all of Newcourt's assets as a result of the consummation of the Phase II Reorganization, (I) assume the obligations of Newcourt in respect of the due and punctual performance and observance of all of the covenants and conditions of the Credit Agreement to be performed or observed by Newcourt, and (II) be a corporation or other entity organized under the laws of Canada or any province thereof, or (B) Newcourt must be the direct or indirect beneficial owner of 100% of the shares of common stock of Newcourt USA and the Borrower. (b) The waivers set forth in this Section 5 shall be effective only for the specific purpose and in the specific instance described above, and shall not otherwise modify any of the obligations of any Obligor under the Credit Agreement. 6. MISCELLANEOUS. (a) CONTINUED EFFECTIVENESS OF CREDIT AGREEMENT. Except as otherwise expressly provided herein, the Credit Agreement is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects, except that on and after the date hereof all references in the Credit Agreement to "this Agreement", "hereto", "hereof", "hereunder" or words of like import referring to the Credit Agreement shall mean the Credit Agreement as amended by this Amendment. (b) COUNTERPARTS. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. (c) HEADINGS. Section headings herein are included for convenience of reference only and shall not constitute a part of this Amendment for any other purpose. - 5 - (d) GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. - 6 - IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date first above written. AT&T CAPITAL CORPORATION By: /s/ Glenn Votek ------------------------------------ Name: Glenn Votek Title: Treasurer NEWCOURT CREDIT GROUP INC., as Guarantor By: /s/ Glenn Votek ------------------------------------ Name: Glenn Votek Title: Treasurer By: /s/ James D. Moss ------------------------------------ Name: James D. Moss Title: Vice President NEWCOURT CREDIT GROUP USA INC., as Guarantor By: /s/ Glenn Votek ------------------------------------ Name: Glenn Votek Title: Treasurer MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent and a Bank By: ____________________________________ Name: Title: - 7 - CANADIAN IMPERIAL BANK OF COMMERCE, as Syndication Agent and a Bank By: /s/ Gerald Girardi ------------------------------------ Name: GERALD GIRARDI Title: EXECUTIVE DIRECTOR CIBC WORLD MARKETS CORP., AS AGENT DEUTSCHE BANK AG, NEW YORK BRANCH, as Co-Documentation Agent and a Bank By: ____________________________________ Name: Title: THE CHASE MANHATTAN BANK, as Co- Documentation Agent and a Bank By: ____________________________________ Name: Title: BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION By: ____________________________________ Name: Title: BARCLAYS BANK PLC By: ____________________________________ Name: Title: CREDIT LYONNAIS, NEW YORK BRANCH By: ____________________________________ Name: Title: - 8 - CANADIAN IMPERIAL BANK OF COMMERCE, as Syndication Agent and a Bank By: ____________________________________ Name: Title: DEUTSCHE BANK AG, NEW YORK BRANCH, as Co-Documentation Agent and a Bank By: /s/ Suzanne R. Kissling ------------------------------------ Name: Suzanne R. Kissling Title: MANAGING DIRECTOR By: /s/ Gayma Z. Shivnarain ------------------------------------ Name: Gayma Z. Shivnarain Title: Director THE CHASE MANHATTAN BANK, as Co- Documentation Agent and a Bank By: ____________________________________ Name: Title: BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION By: ____________________________________ Name: Title: BARCLAYS BANK PLC By: ____________________________________ Name: Title: CREDIT LYONNAIS, NEW YORK BRANCH By: ____________________________________ Name: Title: - 8 - CANADIAN IMPERIAL BANK OF COMMERCE, as Syndication Agent and a Bank By: ____________________________________ Name: Title: DEUTSCHE BANK AG, NEW YORK BRANCH, as Co-Documentation Agent and a Bank By: ____________________________________ Name: Title: THE CHASE MANHATTAN BANK, as Co- Documentation Agent and a Bank By: /s/ Roger Parker ------------------------------------ Name: Roger Parker Title: Vice President BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION By: ____________________________________ Name: Title: BARCLAYS BANK PLC By: ____________________________________ Name: Title: CREDIT LYONNAIS, NEW YORK BRANCH By: ____________________________________ Name: Title: - 7 - CANADIAN IMPERIAL BANK OF COMMERCE, as Syndication Agent and a Bank By: ____________________________________ Name: Title: DEUTSCHE BANK AG, NEW YORK BRANCH, as Co-Documentation Agent and a Bank By: ____________________________________ Name: Title: THE CHASE MANHATTAN BANK, as Co- Documentation Agent and a Bank By: ____________________________________ Name: Title: BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION By: ____________________________________ Name: Title: BARCLAYS BANK PLC By: /s/ Richard Herder ------------------------------------ Name: Richard Herder Title: Director CREDIT LYONNAIS, NEW YORK BRANCH By: ____________________________________ Name: Title: - 8 - CANADIAN IMPERIAL BANK OF COMMERCE, as Syndication Agent and a Bank By: ____________________________________ Name: Title: DEUTSCHE BANK AG, NEW YORK BRANCH, as Co-Documentation Agent and a Bank By: ____________________________________ Name: Title: THE CHASE MANHATTAN BANK, as Co- Documentation Agent and a Bank By: ____________________________________ Name: Title: BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION By: ____________________________________ Name: Title: BARCLAYS BANK PLC By: ____________________________________ Name: Title: CREDIT LYONNAIS, NEW YORK BRANCH By: /s/ W. Jay Buckley ------------------------------------ Name: W. JAY BUCKLEY Title: VICE PRESIDENT - 8 - DRESDNER BANK AG, NEW YORK BRANCH By: /s/ J. Curtin Beaudouin ------------------------------------ Name: J. CURTIN BEAUDOUIN Title: First Vice President By: /s/ Stephen A. Kovach ------------------------------------ Name: STEPHEN A. KOVACH Title: ASSISTANT VICE PRESIDENT FIRST UNION NATIONAL BANK By: ____________________________________ Name: Title: THE FIRST NATIONAL BANK OF CHICAGO By: ____________________________________ Name: Title: FLEET BANK, N.A. By: ____________________________________ Name: Title: MARINE MIDLAND BANK By: ____________________________________ Name: Title: - 9 - DRESDNER BANK AG, NEW YORK BRANCH By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: FIRST UNION NATIONAL BANK By: /s/ Jane W. Workman ------------------------------------ Name: JANE W. WORKMAN Title: SENIOR VICE PRESIDENT THE FIRST NATIONAL BANK OF CHICAGO By: ____________________________________ Name: Title: FLEET BANK, N.A. By: ____________________________________ Name: Title: MARINE MIDLAND BANK By: ____________________________________ Name: Title: - 9 - DRESDNER BANK AG, NEW YORK BRANCH By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: FIRST UNION NATIONAL BANK By: ____________________________________ Name: Title: BANK ONE, N.A (formerly known as THE FIRST NATIONAL BANK OF CHICAGO) By: /s/ Cory M. Helfand ------------------------------------ Name: CORY M. HELFAND Title: VICE PRESIDENT FLEET BANK, N.A. By: ____________________________________ Name: Title: MARINE MIDLAND BANK By: ____________________________________ Name: Title: - 9 - DRESDNER BANK AG, NEW YORK BRANCH By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: FIRST UNION NATIONAL BANK By: ____________________________________ Name: Title: THE FIRST NATIONAL BANK OF CHICAGO By: ____________________________________ Name: Title: FLEET BANK, N.A. By: /s/ Robert ------------------------------------ Name: ROBERT Title: S.V.P. MARINE MIDLAND BANK By: ____________________________________ Name: Title: - 9 - DRESDNER BANK AG, NEW YORK BRANCH By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: FIRST UNION NATIONAL BANK By: ____________________________________ Name: Title: THE FIRST NATIONAL BANK OF CHICAGO By: ____________________________________ Name: Title: FLEET BANK, N.A. By: ____________________________________ Name: Title: HSBC BANK USA By: /s/ Johan Sorensson ------------------------------------ Name: Johan Sorensson Title: Vice President - 8 - NATIONAL AUSTRALIA BANK LIMITED By: /s/ Bill Schmid ------------------------------------ Name: Bill Schmid Title: Vice President By: ____________________________________ Name: Title: ROYAL BANK OF CANADA By: ____________________________________ Name: Title: THE BANK OF NOVA SCOTIA By: ____________________________________ Name: Title: THE TORONTO-DOMINION BANK By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH By: ____________________________________ Name: Title: - 10 - NATIONAL AUSTRALIA BANK LIMITED By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: ROYAL BANK OF CANADA By: /s/ Glen D. Carter ------------------------------------ Name: Glen D. Carter Title: Senior Manager THE BANK OF NOVA SCOTIA By: ____________________________________ Name: Title: THE TORONTO-DOMINION BANK By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH By: ____________________________________ Name: Title: - 10 - NATIONAL AUSTRALIA BANK LIMITED By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: ROYAL BANK OF CANADA By: ____________________________________ Name: Title: THE BANK OF NOVA SCOTIA By: /s/ Brian S. Allen ------------------------------------ Name: Brian S. Allen Title: Managing Director THE TORONTO-DOMINION BANK By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH By: ____________________________________ Name: Title: - 10 - NATIONAL AUSTRALIA BANK LIMITED By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: ROYAL BANK OF CANADA By: ____________________________________ Name: Title: THE BANK OF NOVA SCOTIA By: ____________________________________ Name: Title: THE TORONTO-DOMINION BANK By: /s/ Azar S. Azarpour ------------------------------------ Name: AZAR S. AZARPOUR Title: MGR. CR. ADMIN. THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH By: ____________________________________ Name: Title: - 10 - THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH By: ____________________________________ Name: Title: DG DEUTSCHE GENOSSENSCHAFTSBANK By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: BANCA MONTE DEI PASCHI DI SIENA S.P.A. By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: BANK OF HAWAII By: /s/ Donna R. Parker ------------------------------------ Name: DONNA R. PARKER Title: VICE PRESIDENT - 11 - CREDIT SUISSE FIRST BOSTON By: /s/ Jay Chall ------------------------------------ Name: Jay Chall Title: Director By: /s/ James H. Lee ------------------------------------ Name: James H. Lee Title: Assistant Vice President BAYERISCHE VEREINSBANK AG, NEW YORK BRANCH By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: COMERICA BANK By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: SOCIETE GENERALE By: ____________________________________ Name: Title: - 12 - THE BANK OF NEW YORK By: /s/ Ernest Fung ------------------------------------ Name: ERNEST FUNG Title: Vice President BANCO CENTRAL HISPANOAMERICANO S.A., NEW YORK BRANCH By: ____________________________________ Name: Title: BANK AUSTRIA AKTIENGESELLSCHAFT By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: BANQUE NATIONALE DE PARIS By: ____________________________________ Name: Title: - 12 - THE BANK OF NEW YORK By: ____________________________________ Name: Title: BANCO CENTRAL HISPANOAMERICANO S.A., NEW YORK BRANCH By: ____________________________________ Name: Title: BANK AUSTRIA AKTIENGESELLSCHAFT By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: BANQUE NATIONALE DE PARIS By: /s/ Veronique Marcus ------------------------------------ Name: Veronique Marcus Title: Vice President By: ------------------------------------ Name: Title: Vice President - 13 - PARIBAS By: /s/ Sean Reddington ------------------------------------ Name: Sean Reddington Title: Director By: /s/ Kevin D'Albert ------------------------------------ Name: Kevin D'Albert Title: Assistant Vice President BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS BRANCH By: ____________________________________ Name: Title: THE FUJI BANK, LIMITED, NEW YORK BRANCH By: ____________________________________ Name: Title: UNION BANK OF CALIFORNIA, N.A. By: ____________________________________ Name: Title: PRUDENTIAL SECURITIES - 14 - BANQUE PARIBAS By: ____________________________________ Name: Title: BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS BRANCH By: /s/ Hereward Drummond ------------------------------------ Name: Hereward Drummond Title: Senior Vice President By: /s/ James H. Boyle ------------------------------------ Name: James H. Boyle Title: Vice President THE FUJI BANK, LIMITED, NEW YORK BRANCH By: ____________________________________ Name: Title: UNION BANK OF CALIFORNIA, N.A. By: ____________________________________ Name: Title: PRUDENTIAL SECURITIES By: ____________________________________ Name: Title: - 14 - CANADIAN IMPERIAL BANK OF COMMERCE, as Syndication Agent and a Bank By: ____________________________________ Name: Title: DEUTSCHE BANK AG, NEW YORK BRANCH, as Co-Documentation Agent and a Bank By: ____________________________________ Name: Title: THE CHASE MANHATTAN BANK, as Co- Documentation Agent and a Bank By: ____________________________________ Name: Title: BANK OF AMERICA, N.A. By: /s/ Nelson D. Albrecht ------------------------------------ Name: Nelson D. Albrecht Title: Vice President BARCLAYS BANK PLC By: ____________________________________ Name: Title: CREDIT LYONNAIS, NEW YORK BRANCH By: ____________________________________ Name: Title: - 8 - THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH By: ____________________________________ Name: Title: DG DEUTSCHE GENOSSENSCHAFTSBANK By: /s/ Andrew S. Resnick ------------------------------------ Name: Andrew S. Resnick Title: Vice President By: /s/ Rob T. Jokhai ------------------------------------ Name: Rob T. Jokhai Title: Assistant Vice President BANCA MONTE DEI PASCHI DI SIENA S.P.A. By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: BANK OF HAWAII By: ____________________________________ Name: Title: - 11 - CREDIT SUISSE FIRST BOSTON By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: BAYERISCHE VEREINSBANK AG, NEW YORK BRANCH By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: COMERICA BANK By: /s/ Marian L. Enright ------------------------------------ Name: Marian L. Enright Title: Vice President By: ____________________________________ Name: Title: SOCIETE GENERALE By: ____________________________________ Name: Title: - 12 - CREDIT SUISSE FIRST BOSTON By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: BAYERISCHE VEREINSBANK AG, NEW YORK BRANCH By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: COMERICA BANK By: ____________________________________ Name: Title: By: ____________________________________ Name: Title: SOCIETE GENERALE By: /s/ Charles D. Fischer, Jr. ------------------------------------ Name: Charles D. Fischer, Jr. Title: Vice President - 12 - EX-10.12 14 a2069484zex-10_12.txt EXHIBIT 10.12 Exhibit 10.12 [EXECUTION COPY] AMENDMENT NO. 3 TO CREDIT AGREEMENT AMENDMENT dated as of May 30, 2001 to the $765,000,000 Credit Agreement dated as of April 13, 1998, as amended as of April 9, 1999 and November 15, 1999 (as so amended, the "CREDIT AGREEMENT") among CAPITA CORPORATION (the "BORROWER"), CIT FINANCIAL LTD. ("CIT FINANCIAL"), NEWCOURT CREDIT GROUP USA INC. ("NEWCOURT"), the BANKS party thereto (the "BANKS") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent (the "ADMINISTRATIVE AGENT"). W I T N E S S E T H : WHEREAS, the parties hereto desire to amend the Credit Agreement as more fully set forth below; NOW, THEREFORE, the parties hereto agree as follows: SECTION 1. DEFINED TERMS; REFERENCES. Unless otherwise specifically defined herein, each term used herein which is defined in the Credit Agreement has the meaning assigned to such term in the Credit Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference and each reference to "this Agreement" and each other similar reference contained in the Credit Agreement shall, after this Amendment becomes effective, refer to the Credit Agreement as amended hereby. SECTION 2. AMENDMENTS TO CREDIT AGREEMENT. (a) The following new term is added to Section 1.01 of the Credit Agreement in appropriate alphabetical order: "TYCO ACQUISITION" means the proposed acquisition of The CIT Group, Inc. by Tyco International Ltd. publicly announced on March 13, 2001. (b) Clause (j) of Section 6.01 of the Credit Agreement is amended to add the words "or the Tyco Acquisition" immediately after the words "the CIT Acquisition". SECTION 3. REPRESENTATIONS OF BORROWER. The Borrower represents and warrants that (i) the representations and warranties of the Borrower set forth in Article 4 of the Credit Agreement will be true on and as of the Amendment Effective Date and (ii) no Default will have occurred and be continuing on such date. SECTION 4. GOVERNING LAW. This Amendment shall be governed by and construed in accordance with the laws of the State of New York. SECTION 5. COUNTERPARTS. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. SECTION 6. EFFECTIVENESS. This Amendment shall become effective as of the date hereof on the date when (the "AMENDMENT EFFECTIVE DATE") the Administrative Agent shall have received from each of the Borrower, CIT Financial, Newcourt and the Required Banks a counterpart hereof signed by such party or facsimile or other written confirmation (in form satisfactory to the Administrative Agent) that such party has signed a counterpart hereof. 2 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. CAPITA CORPORATION By /s/ Glenn A. Votek -------------------------------------- Name: Glenn A. Votek Title: Executive Vice President & Treasurer CIT FINANCIAL LTD. By /s/ Glenn A. Votek -------------------------------------- Name: Glenn A. Votek Title: Executive Vice President & Treasurer NEWCOURT CREDIT GROUP USA INC. By /s/ Glenn A. Votek -------------------------------------- Name: Glenn A. Votek Title: Executive Vice President & Treasurer MORGAN GUARANTY TRUST COMPANY OF NEW YORK By______________________________________ Name: Title: CANADIAN IMPERIAL BANK OF COMMERCE By______________________________________ Name: Title: 3 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. CAPITA CORPORATION By______________________________________ Name: Title: CIT FINANCIAL LTD. By______________________________________ Name: Title: NEWCOURT CREDIT GROUP USA INC. By______________________________________ Name: Title: MORGAN GUARANTY TRUST COMPANY OF NEW YORK By /s/ Maria H. Dell'Aquila IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. CAPITA CORPORATION By______________________________________ Name: Title: CIT FINANCIAL LTD. By______________________________________ Name: Title: NEWCOURT CREDIT GROUP USA INC. By______________________________________ Name: Title: MORGAN GUARANTY TRUST COMPANY OF NEW YORK By______________________________________ Name: Title: CANADIAN IMPERIAL BANK OF COMMERCE By /s/ -------------------------------------- Name: Title: EXECUTIVE DIRECTOR 3 DEUTSCHE BANK AG. NEW YORK BRANCH AND/OR CAYMAN ISLANDS BRANCHES By /s/ Gayma Z. Shivnarain -------------------------------------- Name: Gayma Z. Shivnarain Title: Director By /s/ Suzanne Kissling -------------------------------------- Name: Suzanne Kissling Title: Managing Director THE CHASE MANHATTAN BANK By______________________________________ Name: Title: BANK OF AMERICA NT & SA By______________________________________ Name: Title: BARCLAYS BANK PLC By______________________________________ Name: Title: DEUTSCHE BANK AG. NEW YORK BRANCH AND/OR CAYMAN ISLANDS BRANCHES By______________________________________ Name: Title: By______________________________________ Name: Title: THE CHASE MANHATTAN BANK By /s/ Roger Parker -------------------------------------- Name: Roger Parker Title: Vice President BANK OF AMERICA NT & SA By______________________________________ Name: Title: BARCLAYS BANK PLC By______________________________________ Name: Title: DEUTSCHE BANK AG. NEW YORK BRANCH AND/OR CAYMAN ISLANDS BRANCHES By______________________________________ Name: Title: By______________________________________ Name: Title: THE CHASE MANHATTAN BANK By______________________________________ Name: Title: BANK OF AMERICA NT & SA By /s/ -------------------------------------- Name: Title: Managing Director BARCLAYS BANK PLC By______________________________________ Name: Title: DEUTSCHE BANK AG. NEW YORK BRANCH AND/OR CAYMAN ISLANDS BRANCHES By______________________________________ Name: Title: By______________________________________ Name: Title: THE CHASE MANHATTAN BANK By______________________________________ Name: Title: BANK OF AMERICA NT & SA By______________________________________ Name: Title: BARCLAYS BANK PLC By /s/ Alison McGuigan -------------------------------------- Name: Alison McGuigan Title: Associate Director CREDIT LYONNAIS NEW YORK BRANCH By /s/ Sebastian Rocco -------------------------------------- Name: Sebastian Rocco Title: Senior Vice President DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES By______________________________________ Name: Title: By______________________________________ Name: Title: FIRST UNION NATIONAL BANK By______________________________________ Name: Title: BANC ONE CAPITAL MARKETS By______________________________________ Name: Title: CREDIT LYONNAIS By______________________________________ Name: Title: DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES By /s/ J. Curtin Beaudouin -------------------------------------- Name: J. CURTIN BEAUDOUIN Title: DIRECTOR By /s/ Mark Van Der Griend -------------------------------------- Name: MARK VAN DER GRIEND Title: DIRECTOR FIRST UNION NATIONAL BANK By______________________________________ Name: Title: BANC ONE CAPITAL MARKETS By______________________________________ Name: Title: CREDIT LYONNAIS By______________________________________ Name: Title: DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES By______________________________________ Name: Title: By______________________________________ Name: Title: FIRST UNION NATIONAL BANK By /s/ Jane W. Workman -------------------------------------- Name: JANE W. WORKMAN Title: SENIOR VICE PRESIDENT BANC ONE CAPITAL MARKETS By______________________________________ Name: Title: CREDIT LYONNAIS By______________________________________ Name: Title: DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES By______________________________________ Name: Title: By______________________________________ Name: Title: FIRST UNION NATIONAL BANK By______________________________________ Name: Title: BANC ONE CAPITAL MARKETS By /s/ Janet S. Leong -------------------------------------- Name: Janet S. Leong Title: First Vice President BANKONE FLEET BANK, N.A. By /s/ Robert T. P. Storer -------------------------------------- Name: ROBERT T. P. STORER Title: MANAGING DIRECTOR HSBC BANK USA By______________________________________ Name: Title: NATIONAL AUSTRALIA BANK LIMITED By______________________________________ Name: Title: ROYAL BANK OF CANADA By______________________________________ Name: Title: THE BANK OF NOVA SCOTIA By______________________________________ Name: Title: 6 FLEET BANK, N.A. By______________________________________ Name: Title: HSBC BANK USA By /s/ Johan Sorensson -------------------------------------- Name: Johan Sorensson Title: FVP NATIONAL AUSTRALIA BANK LIMITED By______________________________________ Name: Title: ROYAL BANK OF CANADA By______________________________________ Name: Title: THE BANK OF NOVA SCOTIA By______________________________________ Name: Title: 6 FLEET BANK, N.A. By______________________________________ Name: Title: HSBC BANK USA By______________________________________ Name: Title: NATIONAL AUSTRALIA BANK LIMITED By /s/ Bill Schmid -------------------------------------- Name: Bill Schmid Title: Vice President ROYAL BANK OF CANADA By______________________________________ Name: Title: THE BANK OF NOVA SCOTIA By______________________________________ Name: Title: 6 FLEET BANK, N.A. By______________________________________ Name: Title: HSBC BANK USA By______________________________________ Name: Title: NATIONAL AUSTRALIA BANK LIMITED By______________________________________ Name: Title: ROYAL BANK OF CANADA By /s/ Scott Umbs -------------------------------------- Name: SCOTT UMBS Title: MANAGER THE BANK OF NOVA SCOTIA By______________________________________ Name: Title: 6 FLEET BANK, N.A. By______________________________________ Name: Title: HSBC BANK USA By______________________________________ Name: Title: NATIONAL AUSTRALIA BANK LIMITED By______________________________________ Name: Title: ROYAL BANK OF CANADA By______________________________________ Name: Title: THE BANK OF NOVA SCOTIA By /s/ Brian S. Allen -------------------------------------- Name: Brian S. Allen Title: Managing Director 6 TORONTO DOMINION (TEXAS), INC. By /s/ Ann S. Slanis -------------------------------------- Name: Ann S. Slanis Title: Vice President By______________________________________ Name: Title: BANCA MONTE DEI PASCHI DI SIENA S.P.A. By______________________________________ Name: Title: By______________________________________ Name: Title: COMERICA BANK By______________________________________ Name: Title: CREDIT SUISSE FIRST BOSTON By______________________________________ Name: Title: By______________________________________ Name: Title: TORONTO DOMINION (TEXAS), INC. By______________________________________ Name: Title: By______________________________________ Name: Title: BANCA MONTE DEI PASCHI DI SIENA S.P.A. By______________________________________ Name: Title: By______________________________________ Name: Title: COMERICA BANK By /s/ Joel S. Gordon -------------------------------------- Name: Joel S. Gordon Title: Account Officer CREDIT SUISSE FIRST BOSTON By______________________________________ Name: Title: By______________________________________ Name: Title: TORONTO DOMINION (TEXAS), INC. By______________________________________ Name: Title: By______________________________________ Name: Title: BANCA MONTE DEI PASCHI DI SIENA S.P.A. By______________________________________ Name: Title: By______________________________________ Name: Title: COMERICA BANK By______________________________________ Name: Title: CREDIT SUISSE FIRST BOSTON By /s/ Jay Chall -------------------------------------- Name: Jay Chall Title: Director By /s/ Thomas P. Irwin -------------------------------------- Name: THOMAS P. IRWIN Title: DIRECTOR CITIBANK, N.A. By /s/ E. J. Pitt -------------------------------------- Name: E. J. PITT Title: VICE PRESIDENT SOCIETE GENERALE By______________________________________ Name: Title: THE BANK OF NEW YORK By______________________________________ Name: Title: BANCO SANTANDER CENTRAL HISPANOAMERICANO S.A., NEW YORK BRANCH By______________________________________ Name: Title: By______________________________________ Name: Title: BNP PARIBAS By______________________________________ Name: Title: By______________________________________ Name: Title: BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS BRANCH By /s/ Hereward Drummond -------------------------------------- Name: Hereward Drummond Title: Senior Vice President By /s/ James H. Boyle -------------------------------------- Name: James H. Boyle Title: Vice President THE FUJI BANK, LIMITED, NEW YORK BRANCH By______________________________________ Name: Title: -------------------------------------- Name: MARIA H. DELL'AQUILA Title: VICE PRESIDENT CANADIAN IMPERIAL BANK OF COMMERCE By______________________________________ Name: Title: 3 EX-10.13 15 a2069484zex-10_13.txt EXHIBIT 10.13 Exhibit 10.13 ASSUMPTION AGREEMENT ASSUMPTION AGREEMENT dated as of June 1,2001, made by THE CIT GROUP, INC. (formerly known as Tyco Acquisition Corp. XX (NV)), a Nevada corporation, ("CIT") and CIT HOLDINGS (NV) INC. (formerly known as Tyco Acquisition Corp. XIX (NV)), a Nevada corporation ("CIT HOLDINGS"), to the Guaranty made by The CIT Group, Inc., a Delaware corporation ("CIT DELAWARE") dated as of November 15, 1999 (the "GUARANTY") guaranteeing Capita Corporation's obligations under a certain $765,000,000 CREDIT AGREEMENT, dated as of April 13, 1998 as amended by a certain Amendments dated as of April 9,1999, November 15, 1999 and May 30, 2001 (collectively the "CREDIT AGREEMENT"; unless otherwise defined herein, capitalized terms which are defined in the Credit Agreement are used herein as defined therein) among CAPITA CORPORATION, a Delaware corporation ("CAPITA"), CIT FINANCIAL LTD., an Ontario corporation ("CIT FINANCIAL"), NEWCOURT CREDIT GROUP USA INC. ("NEWCOURT USA") the banks party thereto (the "BANKS") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent (the "ADMINISTRATIVE AGENT"). W I N E S S E T H WHEREAS, Capita, the Banks and the Administrative Agent are parties to the Credit Agreement pursuant to which Banks have agreed to make, and have made, certain loans and other extensions of credit to Capita; WHEREAS, pursuant to the terms and provisions of the Guaranty, CIT Delaware agreed to guaranty performance of Capita's obligations under the Credit Agreement: WHEREAS, effective as of the date hereof, CIT Delaware has merged into CIT Holdings pursuant to a Certificate of Merger filed with the Delaware Secretary of State on the date hereof and Articles of Merger filed with the Nevada Secretary of State on the date hereof (the "MERGER"); WHEREAS, immediately following the Merger CIT Holdings will transfer all of the assets owned by CIT Delaware immediately prior to the Merger, whether tangible or intangible, including, without limitation, any and all claims, judgments, contractual rights, causes of action and other rights, whether legal or equitable (the "ASSETS"), to CIT, and CIT will accept the contribution of the Assets and assume substantially all of the liabilities of CIT Delaware, whether fixed or contingent, liquidated or unliquidated, matured or unmatured, secured or unsecured (collectively, the "LIABILITIES"), in each case as the same shall exist immediately following the Merger (such assignment and assumption, the "TRANSFER"), pursuant to, and in accordance with, the terms and conditions of the Contribution and Assumption Agreement (the "CONTRIBUTION AND ASSUMPTION AGREEMENT"); WHEREAS, pursuant to the terms of the Merger and applicable law, CIT Holdings succeeded to all of the rights and obligations of CIT Delaware, and pursuant to the Contribution and Assumption Agreement, CIT Holdings has transferred to CIT all such rights and CIT has assumed all such obligations; WHEREAS, pursuant to this Assumption Agreement the parties wish to provide that CIT Holdings shall become the "Guarantor" under the Guarantee by reason of the Merger and that, immediately thereafter, CIT shall become the "Guarantor" by reason of the Transfer. NOW, THEREFORE, in consideration of the premises and the agreements herein, CIT LLC hereby agrees as follows: ARTICLE I ASSUMPTION AND RELEASE SECTION 1.1. ASSUMPTION AND SUBSTITUTION. (a) Pursuant to the Merger and this Assumption Agreement, CIT Holdings has expressly assumed, as its direct and primary obligation, the due and punctual performance and observance of all of the covenants and conditions to be performed or observed by CIT Delaware under the Guaranty, and has succeeded to, and has been substituted for, CIT Delaware, with the same effect as if CIT Holdings had been named in the Guaranty. (b) Pursuant to the Transfer and this Assumption Agreement, CIT has expressly assumed the due and punctual performance and observance of all the covenants and conditions to be performed or observed by CIT Holdings, as successor of CIT Delaware, under the Guaranty, and has succeeded to, and is substituted for, CIT Delaware and CIT Holdings, with the same effect as if CIT had been named in the Guaranty. ARTICLE II REPRESENTATIONS AND WARRANTIES SECTION 2.1. REPRESENTATIONS AND WARRANTIES OF CIT HOLDINGS. CIT Holdings hereby represents and warrants as follows: (a) CIT Holdings (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and (ii) has the power and authority to execute, deliver and perform this Assumption Agreement. (b) The execution, delivery and performance by CIT Holdings of this Assumption Agreement (i) have been duly authorized by all necessary company action, (ii) do not and will not contravene its articles of incorporation or bylaws, any material law or any material contractual restriction binding on or affecting CIT Holdings or any of its material properties and (iii) do not and will not result in or require the creation of any lien, security interest or other charge or encumbrance upon or with respect to any of its material properties. (c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or other regulatory body is required for the due execution, -2- delivery and performance by CIT Holdings of this Assumption Agreement or for its assumption of the obligations of CIT Delaware under the Guaranty. (d) This Assumption Agreement is, the legal, valid and binding obligation of CIT Holdings, enforceable against CIT Holdings in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). (e) No litigation, investigation or proceeding of or before any arbitrator or governmental authority or other regulatory body is pending or, to the knowledge of CIT Holdings, threatened by or against CIT Holdings with respect to this Assumption Agreement or any of the transactions contemplated hereby. (f) CIT Holdings was not, effective immediately following the Merger, in default in the performance of any covenant or condition in the Guaranty. SECTION 2.2. REPRESENTATIONS AND WARRANTIES OF CIT. CIT hereby represents and warrants as follows: (a) CIT (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and (ii) has the power and authority to assume the obligations of Corporation under the Guaranty and to execute, deliver and perform this Assumption Agreement. (b) The execution, delivery and performance by CIT of this Assumption Agreement and the assumption of the obligations of CIT Holdings under the Guaranty (i) have been duly authorized by all necessary company action, (ii) do not and will not contravene its articles of incorporation or bylaws, any material law or any material contractual restriction binding on or affecting CIT or any of its material properties and (iii) do not and will not result in or require the creation of any lien, security interest or other charge or encumbrance upon or with respect to any of its material properties. (c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or other regulatory body is required for the due execution, delivery and performance by CIT of this Assumption Agreement or for its assumption of the obligations of CIT Holdings under the Guaranty. (d) This Assumption Agreement is the legal, valid and binding obligation of CIT, enforceable against CIT in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). (e) No litigation, investigation or proceeding of or before any arbitrator or governmental authority or other regulatory body is pending or, to the knowledge of CIT, -3- threatened by or against CIT with respect to this Assumption Agreement or any of the transactions contemplated hereby. (f) CIT is not, effective immediately following the Transfer, in default in the performance of any covenant or condition in the Guaranty. ARTICLE III FURTHER ASSURANCES REQUIRED SECTION 3.1. DOCUMENTS. The Administrative Agent shall have received from CIT (a) the executed legal opinion of Lionel Sawyer & Collins, Nevada counsel to CIT, substantially in the form of Exhibit A- 1 and (b) the executed legal opinion of the general counsel of CIT, substantially in the form of Exhibit A-2. SECTION 3.2. FURTHER ASSURANCES REQUIRED. At any time and from time to time, upon the Administrative Agent's request, CIT Holdings and CIT will promptly execute and deliver such documents and instruments and take such further actions as the Administrative Agent may reasonably request to effect the purposes of this Assumption Agreement, at their respective cost and expense. ARTICLE IV MISCELLANEOUS SECTION 4.1. MISCELLANEOUS. This Assumption Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. (b) This Assumption Agreement is effective in respect of CIT Holdings, as of the Merger and, in respect of CIT, as of the Transfer. [Rest of page left intentionally blank] -4- IN WITNESS WHEREOF, CIT Holdings and CIT have caused this Assumption Agreement to be executed by an officer thereunto duly authorized, as of the date first above written. CIT HOLDINGS (NV) INC., a Nevada corporation By /s/ Mark Whitney -------------------------------------- Name: Mark Whitney Title: Vice President and Assistant Secretary THE CIT GROUP, INC., a Nevada corporation By______________________________________ Name: Title: IN WITNESS WHEREOF, CIT Holdings and CIT have caused this Assumption Agreement to be executed by an officer thereunto duly authorized, as of the date first above written. CIT HOLDINGS (NV) INC., a Nevada corporation By______________________________________ Name: Title: THE CIT GROUP, INC., a Nevada corporation By /s/ Glenn A. Votek -------------------------------------- Name: Glenn A. Votek Title: Executive Vice President and Treasurer -5- EX-10.14 16 a2069484zex-10_14.txt EXHIBIT 10.14 Exhibit 10.14 THE CIT GROUP, INC. 650 CIT Drive Livingston, New Jersey 07039-5795 November 15, 1999 Address of Morgan Guaranty Trust Company of New York, as Agent 60 Wall Street New York, NY 10260 Re: UNCONDITIONAL GUARANTY Ladies and Gentlemen: Reference is hereby made to the $765,000,000 Credit Agreement dated as of April 13, 1998, as amended as of April 9, 1999, and as further amended or otherwise modified pursuant to Amendment No. 2 thereto (the "SECOND AMENDMENT"), dated November 15, 1999 (as so amended, and as hereafter amended or otherwise modified from time to time, the "CREDIT AGREEMENT"), by and among AT&T Capital Corporation, Newcourt Credit Group Inc., Newcourt Credit Group USA Inc., the Banks party thereto, Morgan Guaranty Trust Company of New York, as Administrative Agent, Canadian Imperial Bank of Commerce, as Syndication Agent, The Chase Manhattan Bank and Deutsche Bank AG, New York Branch, as Co-Documentation Agents, and J.P. Morgan Securities Inc. and CIBC Oppenheimer Corp., as Arrangers. Any capitalized term used herein and not defined herein shall have the meaning assigned to it in the Credit Agreement. 1. GUARANTY. The CIT Group, Inc. (the "GUARANTOR") hereby (a) unconditionally, absolutely and irrevocably guarantees to the Banks the full and prompt payment by the Borrower of the obligations incurred by the Borrower to the Banks pursuant to the Credit Agreement (including, without limitation, interest accruing at the then applicable rate provided in the Credit Agreement after the maturity of the Loans and interest accruing at the then applicable rate provided in the Credit Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to any Obligor whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) (the "OBLIGATIONS") upon written demand therefor from the Agent, and (b) agrees to pay all out-of-pocket expenses incurred by the Agent and each Bank (including reasonable counsel fees and expenses) in enforcing its rights under this Guaranty. 2. GUARANTOR'S OBLIGATIONS UNCONDITIONAL. (a) The Guarantor hereby guarantees that the Obligations will be paid strictly in accordance with the terms of the Credit Agreement, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Agent and each Bank with respect thereto. The liability of the Guarantor hereunder shall be absolute and unconditional irrespective of: (i) any lack of a validity or enforceability of any of the Obligations, or any agreement, instrument or other document evidencing or securing any of the Obligations; (ii) any change in the time, manner or place of, payment of, or in any other term in respect of, all or any of the Obligations, or any other amendment or waiver of, or consent to any departure from any agreement, instrument or document evidencing or securing the Obligations; or (iii) any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or any other guarantor in respect of the Obligations. (b) This Guaranty (i) is a continuing guarantee of payment and shall remain in full force and effect until the satisfaction in full of the Obligations, the payment of the other expenses to be paid by the Guarantor pursuant hereto and the termination of the Commitments; and (ii) shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by any Bank upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise, all as though such payment had not been made. 3. WAIVERS. The Guarantor hereby waives: (a) promptness and diligence; (b) notice of acceptance and notice of the incurrence of any Obligation by the Borrower; (c) notice of any actions taken by the Agent or any Bank or the Borrower under the Credit Agreement or any other agreement or instrument relating thereto, except as expressly provided for in clause (a) of Section 1; (d) all other notices, demands and protests, and all other formalities of every kind in connection with the enforcement of the Obligations or of the obligations of the Guarantor hereunder, the omission of or delay in which, but for the provisions of this Section 3, might constitute grounds for relieving the Guarantor of its obligations hereunder, except as expressly provided for in clause (a) of Section 1; and (e) any requirement that the Agent or any Bank protect, secure, perfect or insure any security interest or lien or any property subject thereto or exhaust any right or take any action against the Borrower or any other person or entity or any collateral. 4. NO SUBROGATION. Notwithstanding any payment or payments made by the Guarantor hereunder, or any set-off or application of funds of the Guarantor by the Agent or any Bank, the Guarantor shall not be entitled to be subrogated to any of the rights of the Agent or any Bank against any Obligor or against any collateral security or guarantee or right of offset held by the Agent or any Bank for the payment of the Obligations, nor shall the Guarantor seek or be entitled to seek any contribution or reimbursement from any Obligor in respect of payments made by the Guarantor hereunder, until all amounts owing to the Agent and the Banks by the Obligors on account of the Obligations are paid in full and the Commitments are terminated. If any amount shall be paid to the Guarantor on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full, such amount shall be held by the Guarantor in trust for the Agent and the Banks, segregated from other funds of the Guarantor, and shall, forthwith upon receipt by the Guarantor, be turned over to the Agent in the exact form received by the Guarantor (duly indorsed by the Guarantor to the Agent, if required), to be applied against the Obligations, whether matured or unmatured. - 2 - 5. REPRESENTATIONS AND WARRANTIES. To induce the Banks to enter into the Second Amendment, the Guarantor hereby represents and warrants to the Agent and each Bank that: (a) FINANCIAL CONDITION. The consolidated balance sheet of the Guarantor and its consolidated Subsidiaries as of December 31, 1998, and the related consolidated statements of income and of cash flows for the fiscal years ended on such dates, reported on by KPMG Peat Marwick, copies of which have heretofore been furnished to each Bank, present fairly the consolidated financial condition of the Guarantor and its consolidated Subsidiaries as at such dates, and the consolidated results of their operations and their consolidated cash flows for the fiscal year then ended. All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by such accountants and as disclosed therein). (b) NO CHANGE. Since December 31, 1998 and until the date of this Guaranty there has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect. (c) CORPORATE EXISTENCE; COMPLIANCE WITH LAW; SIGNIFICANT SUBSIDIARIES. Each of the Guarantor and its Significant Subsidiaries (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and (ii) has the power and authority to conduct the business in which it is currently engaged. (d) CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The Guarantor has the corporate power and authority to make, deliver and perform this Guaranty and has taken all necessary corporate action to authorize the execution, delivery and performance of this Guaranty. No consent or authorization of, filing with or other act by or in respect of, any Governmental Authority or any other Person is required on the part of the Guarantor in connection with the execution, delivery, performance, validity or enforceability of this Guaranty. This Guaranty has been duly executed and delivered on behalf of the Guarantor. This Guaranty constitutes a legal, valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). (e) NO LEGAL BAR. The execution, delivery and performance of this Guaranty will not violate any Requirement of Law or material Contractual Obligation of the Guarantor or of any of its Significant Subsidiaries and will not result in, or require, the creation or imposition of any Lien on any of its or their material respective properties or revenues pursuant to any such Requirement of Law or Contractual Obligation. (f) NO MATERIAL LITIGATION. (i) No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the - 3 - Guarantor, threatened by or against the Guarantor or any of its Significant Subsidiaries or against any of its or their respective properties or revenues with respect to this Guaranty or any of the transactions contemplated hereby. (ii) No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Guarantor, threatened by or against the Guarantor or any of its Significant Subsidiaries or against any of its or their respective properties or revenues which could reasonably be expected to result in a violation of subsection 6.3 of the CIT Credit Agreement (as defined in Section 6 below), as incorporated herein by reference pursuant to Section 6 below. (g) NO DEFAULT. Neither the Guarantor nor any of its Significant Subsidiaries is in default under or with respect to any of its Contractual Obligations in any respect which could reasonably be expected to result in a violation of subsection 6.3 of the CIT Credit Agreement, as incorporated herein by reference pursuant to Section 6 below. (h) AGGREGATION OF THE REPRESENTATIONS AND WARRANTIES RELATING TO NET WORTH. The total effect of each event or circumstance referred to in paragraph (f)(ii) and paragraph (g) of this Section 5 is not, when taken together in the aggregate, reasonably expected to result in a violation of subsection 6.3 of the CIT Credit Agreement, as incorporated herein by reference pursuant to Section 6 below. (i) INVESTMENT COMPANY ACT. The Guarantor is not an "investment company", or a company "controlled" by an "investment company", within the meaning of the Investment Company Act of 1940, as amended. (j) YEAR 2000 MATTERS. (i) The reprogramming and upgrading of the Guarantor's computer systems required to permit these systems to function properly in and following the Year 2000, and the testing of these systems as so reprogrammed or upgraded, will be completed within a period of time which could not reasonably be expected to result in a violation of subsection 6.3 of the CIT Credit Agreement, as incorporated herein by reference pursuant to Section 6 below, (ii) the cost to the Guarantor of this reprogramming, upgrading and testing could not reasonably be expected to result in a violation of subsection 6.3 of the CIT Credit Agreement, as incorporated herein by reference pursuant to Section 6 below, and (iii) the consequences to the Guarantor of failure of systems or equipment supplied by others due to improper functioning in and following the year 2000 could not reasonably be expected to result in a violation of subsection 6.3 of the CIT Credit Agreement, as incorporated herein by reference pursuant to Section 6 below. As used in this Section, capitalized terms that are not defined in this Guaranty are used with the meanings ascribed to such terms in the CIT Credit Agreement. 6. COVENANTS. The Guarantor agrees that, so long as any Bank has any Commitment under the Credit Agreement or any amount payable under the Credit Agreement or - 4 - any Note remains unpaid, unless the Required Banks shall otherwise consent in writing, the Guarantor will comply with each of the covenants contained in Sections 5.1, 5.2, 5.3, 5.4(b), (c) and (d), 5.5, 5.6, 5.7 and Sections 6.1 through 6.3 of the Third Amended and Restated Credit Agreement dated as of April 24, 1999 (the "CIT CREDIT AGREEMENT"), by and among the Guarantor, as borrower, the several banks and other financial institutions from time to time parties thereto, The Dai-Ichi Kangyo Bank, Limited, as Documentation Agent, The First National Bank of Chicago, as Documentation Agent, Union Bank of Switzerland, as Documentation Agent, and The Chase Manhattan Bank, as Administrative Agent (as in effect on the date hereof, without regard to any amendment, modification or waiver of such provisions and without regard to whether or not the CIT Credit Agreement remains in effect), which Sections (together with all related definitions and ancillary provisions) are hereby incorporated by reference as though set forth herein in their entirety; PROVIDED that (i) references to "Bank" shall mean and be a reference to each Bank under the Credit Agreement, (ii) references to "Administrative Agent" shall mean and be a reference to the Agent, (iii) references to "this Agreement", "herein", "hereunder", and words of similar import shall mean and be a reference to this Guaranty, (iv) references to "Schedule" shall mean and be a reference to the applicable Schedule in the CIT Credit Agreement (as in effect on the date hereof, without regard to any amendment, modification or waiver of such provisions and without regard to whether or not the CIT Credit Agreement remains in effect), and (v) references to Sections in such incorporated Sections shall be references to Sections of the CIT Credit Agreement, provided that to the extent such referenced Sections are themselves incorporated in this Guaranty by reference, references herein to such Sections shall be to such Sections as they are incorporated. 7. MISCELLANEOUS. (a) The Guarantor will make each payment hereunder in lawful money of the United States and in immediately available funds to the Agent at its address set forth above. (b) No amendment of any provision of this Guaranty shall be effective unless it is in writing and signed by the Guarantor and the Banks, and no waiver of any provision of this Guaranty, and no consent to any departure by the Guarantor therefrom, shall be effective unless it is in writing and signed by the Banks, and then such waiver or consent shall be effective only in the specific instance for the specific purpose for which given. (c) No failure on the part of the Agent or any Bank to exercise, and no delay in exercising any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of the Agent or any Bank provided herein are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights of the Agent or any Bank hereunder are not conditional or contingent on any attempt by the Agent or any Bank to exercise any of its rights under any other agreement evidencing or securing the Obligations against such party or against any other person or entity. (d) All communications provided for hereunder shall be in writing (including telecopier communication) and shall be mailed, telecopied or delivered, if to the Guarantor, to it at its address at 1211 Avenue of the Americas, New York, New York 10036 Attention: Senior Vice President and Treasurer; and if to the Agent, to its address at c/o J.P. Morgan & Co., 60 - 5 - Wall Street, Debt Capital Markets, 3rd Floor, New York, NY 10260, Attention: Lesley Eydenberg; or, as to either such Person, at such other address as shall be designated by such Person in a written notice to such other Person complying as to delivery with the terms of this Section 5(d). All such notices and other communications shall be effective (i) if mailed, the earlier of three days after deposit in the mail or when received, (ii) if telecopied, when transmitted, and (iii) if delivered, upon delivery. (e) This Guaranty shall become effective as of the Reorganization Effective Time 8. GOVERNING LAW. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 9. SUBMISSION TO JURISDICTION; WAIVERS. The Guarantor hereby irrevocably and unconditionally: (i) submits for itself and its property in any legal action or proceeding relating to this Guaranty, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States for the Southern District of New York, and appellate courts from any thereof, (ii) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (iii) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar for of mail), postage prepaid, to the Guarantor at is address set forth in Section 7(d) above or at such other address of which the Agent shall have been notified pursuant thereto; and (iv) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction. 10. WAIVERS OF JURY TRIAL. THE GUARANTOR (AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, THE AGENT AND THE BANKS) HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTY AND FOR ANY COUNTERCLAIM THEREIN. - 6 - Very truly yours, THE CIT GROUP, INC. By /s/ Glenn A. Votek -------------------------------------- Name: GLENN A. VOTEK Title: EXECUTIVE VICE PRESIDENT TREASURER - 7 - EX-10.15 17 a2069484zex-10_15.txt EXHIBIT 10.15 EXHIBIT 10.15 CIT FINANCIAL LTD., the Company and ROYAL BANK OF CANADA, as Administrative Agent and CANADIAN IMPERIAL BANK OF COMMERCE and THE CHASE MANHATTAN BANK OF CANADA, as Syndication Agents - -------------------------------------------------------------------------------- $500,000,000 364-DAY CREDIT AGREEMENT Dated as of March 27, 2001 - -------------------------------------------------------------------------------- RBC DOMINION SECURITIES, as Sole Arranger and Book Manager TABLE OF CONTENTS ARTICLE 1 DEFINITIONS Section 1.1 Defined Terms...............................................1 Section 1.2 Other Definitional Provisions...............................9 ARTICLE 2 AMOUNT AND TERMS OF COMMITMENTS Section 2.1 Commitments.................................................9 Section 2.2 Borrowing Procedure.........................................9 Section 2.3 Repayment of Canadian Prime Rate Loans; Evidence of Debt...10 Section 2.4 Facility Fee; Administrative Agent's Fee...................11 Section 2.5 Utilization Fee............................................11 Section 2.6 Extension of Termination Date..............................11 Section 2.7 Termination or Reduction of Commitments....................13 Section 2.8 Optional Prepayments of Accommodations.....................14 Section 2.9 Applicable Interest Rate Margins, Facility Fee Rate and Utilization Fee............................................14 Section 2.10 Interest Rates and Payment Dates...........................14 Section 2.11 Computation of Interest and Fees...........................15 Section 2.12 Pro Rata Treatment and Payments............................17 Section 2.13 Requirements of Law........................................18 Section 2.14 Taxes......................................................20 Section 2.15 Indemnity..................................................20 Section 2.16 Actions of Banks...........................................20 Section 2.17 Lending Installations......................................20 Section 2.18 Removal of Banks...........................................20 Section 2.19 Replacement of Banks.......................................21 ARTICLE 3 BANKERS' ACCEPTANCES Section 3.1 Acceptances and Drafts.....................................22 Section 3.2 Form of Drafts.............................................22 Section 3.3 Procedure for Drawing......................................23 Section 3.4 Presigned Draft Forms......................................23 Section 3.5 Payment, Conversion or Renewal of Bankers' Acceptances.....24 Section 3.6 Circumstances Making Bankers' Acceptances Unavailable......25 (i) ARTICLE 4 REPRESENTATIONS AND WARRANTIES Section 4.1 Representations and Warranties.............................25 ARTICLE 5 CONDITIONS PRECEDENT Section 5.1 Conditions to Initial Accommodations.......................27 Section 5.2 Conditions to Each Accommodation...........................28 ARTICLE 6 AFFIRMATIVE COVENANTS Section 6.1 Payment of Obligations.....................................29 Section 6.2 Conduct of Business and Maintenance of Existence...........29 Section 6.3 Notices....................................................30 Section 6.4 Status of Obligations......................................31 Section 6.5 Payment of Taxes...........................................31 Section 6.6 Use of Proceeds............................................31 ARTICLE 7 NEGATIVE COVENANTS Section 7.1 Negative Pledge............................................31 Section 7.2 Assignment.................................................34 ARTICLE 8 EVENTS OF DEFAULT Section 8.1 Events of Default..........................................35 ARTICLE 9 THE AGENTS Section 9.1 Appointment................................................38 Section 9.2 Delegation of Duties.......................................38 Section 9.3 Exculpatory Provisions.....................................38 Section 9.4 Reliance by Administrative Agent...........................39 Section 9.5 Notice of Default..........................................39 Section 9.6 Non-Reliance on Administrative Agent.......................39 Section 9.7 Indemnification............................................40 Section 9.8 Administrative Agent in Its Individual Capacity............41 Section 9.9 Successor Administrative Agent.............................41 (ii) ARTICLE 10 MISCELLANEOUS Section 10.1 Amendments and Waivers.....................................41 Section 10.2 Notices....................................................42 Section 10.3 No Waiver; Cumulative Remedies.............................43 Section 10.4 Survival of Representations and Warranties.................43 Section 10.5 Payment of Expenses and Taxes..............................44 Section 10.6 Successors and Assigns; Participations; Purchasing Banks...44 Section 10.7 Dissemination of Information; Confidentiality..............47 Section 10.8 Adjustments................................................48 Section 10.9 Counterparts...............................................49 Section 10.10 Severability...............................................49 Section 10.11 Integration................................................49 Section 10.12 GOVERNING LAW..............................................49 Section 10.13 Submission To Jurisdiction; Waivers........................50 Section 10.14 WAIVERS OF JURY TRIAL......................................50 SCHEDULES I Commitments and Bank Information EXHIBITS A-1 Form of Opinion of Counsel to the Company A-2 Form of Opinion of Counsel to the Guarantor A-3 Form of Opinion of Stikeman Elliott B Form of Commitment Transfer Supplement C-1 Form of Officer's Certificate C-2 Form of Officer's Certificate C-3 Form of Secretary's Certificate D Form of Incumbency Certificate E Form of Notice of Borrowing F Form of Drawing Notice G Form of Guaranty (iii) 364 - DAY CREDIT AGREEMENT 364-DAY CREDIT AGREEMENT, dated as of March 27, 2001, among CIT FINANCIAL LTD., a corporation incorporated under the laws of Ontario, the several banks and other financial institutions from time to time on Schedule I to this Agreement (the "BANKS"), ROYAL BANK OF CANADA ("RBC"), as administrative agent (in such capacity, the "ADMINISTRATIVE AGENT"), and CANADIAN IMPERIAL BANK OF COMMERCE AND THE CHASE MANHATTAN BANK OF CANADA, as syndication agents (in such capacity, the "SYNDICATION AGENTS"). RECITALS: (a) The Company has requested $500,000,000 in senior unsecured revolving credit facilities from the Banks for general corporate purposes; and (b) the Banks are willing to provide the requested senior unsecured revolving credit facilities on the terms and conditions set forth herein. In consideration of the foregoing and the mutual agreements contained herein (the receipt and adequacy of which are acknowledged), the parties agree as follows: ARTICLE 1 DEFINITIONS SECTION 1.1 DEFINED TERMS. As used in this Agreement, the following terms shall have the following meanings: "ACCOMMODATION" means (i) a Canadian Prime Rate Loan, (ii) the creation and purchase of Bankers Acceptances or the completion and purchase of completed Drafts by a Bank or by any other Person, and (iii) a BA Equivalent Note. "ACCOMMODATIONS OUTSTANDING" means, at any time, an amount equal to (i) in relation to the Company and any Bank, the sum of (A) the aggregate principal amount of all outstanding Canadian Prime Rate Loans made by such Bank, and (B) the aggregate Face Amount of all outstanding Bankers' Acceptances, completed Drafts and BA Equivalent Notes which the Bank has purchased or has arranged to have purchased, and (ii) in relation to the Company and all Banks, the sum of Accommodations Outstanding to each Bank. "ADMINISTRATIVE AGENT" has the meaning as set forth in the preamble hereto. -2- "AFFILIATE" means as to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. "AGENTS" means the collective reference to the Administrative Agent and the Syndication Agents. "AGGREGATE AVAILABLE COMMITMENT" means at any time, the excess, if any, of (i) the Aggregate Commitment over (ii) the aggregate principal amount of all Accommodations Outstanding. "AGGREGATE COMMITMENT" means the aggregate amount of the Banks' Commitments. "AGREEMENT" means this 364-Day Credit Agreement, as amended, supplemented or otherwise modified from time to time. "APPLICABLE BA MARGIN" has the meaning as set forth in Section 2.9. "APPLICABLE CANADIAN PRIME MARGIN" has the meaning as set forth in Section 2.9. "APPLICABLE FACILITY FEE RATE" has the meaning as set forth in Section 2.9. "APPLICABLE MARGIN" has the meaning as set forth in Section 2.9. "APPLICABLE UTILIZATION FEE RATE" has the meaning as set forth in Section 2.9. "BA EQUIVALENT NOTE" has the meaning as set forth in Section 3.3(3). "BANKERS' ACCEPTANCE" has the meaning as set forth in Section 3.1(1). "BANKS" has the meaning as set forth in the preamble hereto. "BORROWING" means any borrowing consisting of simultaneous Canadian Prime Rate Loans from each of the Banks. "BORROWING DATE" means a date on which a Borrowing is made hereunder. "BUSINESS DAY" means a day other than a Saturday, Sunday or other day on which commercial banks in Toronto are authorized or required by law to close. "CANADIAN PRIME RATE" means, on any day, the greater of (i) the rate of interest per annum equal to the per annum rate of interest quoted, published and commonly known as the "PRIME RATE" of RBC which RBC establishes at its main office in Toronto, Ontario as the reference rate of interest in order to determine interest rates for commercial loans in Dollars to its Canadian borrowers, adjusted automatically -3- and with each quoted or published change in the prime rate of RBC there shall be a corresponding change in the rate of interest payable under this Agreement, all without necessity of any prior notice thereof to the Company or any other Person, and (ii) the rate for Canadian Dollar bankers' acceptances accepted by RBC with a term to maturity of 30 days as quoted on the Reuters Screen CDOR Page as of 10:00 a.m. (Toronto time) on such day (and if such screen is not available, any successor or similar service as may be selected by the Company and the Administrative Agent) plus 0.50%. "CANADIAN PRIME RATE LOAN" means a loan bearing interest at a rate determined by reference to the Canadian Prime Rate in accordance with Article 2. "CIT U.S. CREDIT AGREEMENT" means the 364-Day Credit Agreement dated as of March 28, 2000 among the Guarantor, the lenders party thereto, The Chase Manhattan Bank, as administrative agent, Chase Securities Inc as lead arranger and book manager, Barclays Bank PLC, Bank of America, N.A., Citibank, N.A. and The Dai-Ichi Kangyo Bank, Limited, as syndication agents, as amended, modified, supplemented or restated from time to time. "CLOSING DATE" means the date on which the conditions precedent set forth in Section 5.1 are satisfied. "COMMITMENT" means, with respect to any Bank, the obligation of such Bank to make Accommodations to the Company hereunder in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Bank's name on Schedule I, as the same may be decreased or terminated from time to time in accordance with Section 2.7. "COMMITMENT PERCENTAGE" means, with respect to any Bank at any time, the percentage of the Aggregate Commitment then constituted by such Bank's Commitment, or, at any time after the Commitments shall have expired or terminated, the percentage which the amount of such Bank's Accommodations Outstanding constitutes of the amount of the Accommodations Outstanding. "COMMITMENT PERIOD" means the period from and including the date hereof to but not including the Termination Date or such earlier date on which the Aggregate Commitment shall terminate as provided herein. "COMMITMENT TRANSFER SUPPLEMENT" has the meaning as set forth in Section 10.6(3). "COMPANY" means CIT Financial Ltd. and its successors and assigns. "CONTINUING BANKS" has the meaning as set forth in Section 2.6(1). -4- "CONTRACTUAL OBLIGATION" means as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound. "DEFAULT" means any of the events specified in Section 8.1, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "DISCOUNT RATE" means, in respect of any Bankers' Acceptances or Drafts to be purchased by a Bank pursuant to Article 3, (i) for a Bank which is a Schedule I Bank, (y) the average bankers' acceptances discount rate for the appropriate term as quoted on Reuters Screen CDOR Page determined at or about 10:00 a.m. (Toronto time) on that day or, (z) if the discount rate for a particular term is not quoted on Reuters Screen CDOR Page, the actual discount rate accepted by RBC, and (ii) for any other Bank, the arithmetic average of the actual discount rate quoted by the Reference Banks (as selected by the Administrative Agent and the Company) but not to exceed the actual rate of discount quoted in (i) above plus 0.08%. "DOLLARS" and "$" means dollars in lawful currency of Canada. "DRAFT" means, at any time, either a depository bill within the meaning of the DEPOSITORY BILLS AND NOTES ACT (Canada), or a bill of exchange within the meaning of the BILLS OF EXCHANGE ACT (Canada), drawn by the Company on a Bank or any other Person and bearing such distinguishing letters and numbers as the Bank or the Person may determine, but which at such time has not been completed as the payee or accepted by the Bank or the Person. "DRAWING" means (i) the creation and purchase of Bankers' Acceptances by a Bank or by any other Person pursuant to Article 3, or (ii) the purchase of completed Drafts by a Bank or by any other Person pursuant to Article 3. "DRAWING DATE" means any Business Day fixed pursuant to Section 3.3 for a Drawing. "DRAWING FEE" means, with respect to each Draft drawn by the Company hereunder and purchased by any Person on any Drawing Date, an amount equal to the product of the Applicable BA Margin and the Face Amount of such Draft, calculated on the basis of the term to maturity of such Draft and a year of 365 days. "DRAWING NOTICE" has the meaning as set forth in Section 3.3(1). "DRAWING PURCHASE PRICE" means, in respect of Bankers' Acceptances or Drafts to be purchased by a Bank or any other Person, an amount equal to the product of (i) the aggregate Face Amount of such Bankers' Acceptances or Drafts, and (ii) the result (rounded to the nearest whole cent, with one-half of one cent being rounded up) -5- obtained by dividing one by the sum of one plus the product of (x) the relevant Bank's Discount Rate multiplied by (y) a fraction the numerator of which is the number of days in the term of maturity of such Bankers' Acceptances and the denominator of which is 365. "EVENT OF DEFAULT" means any of the events specified in Section 8.1, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "EXISTING CREDIT AGREEMENT" means the credit agreement dated as of March 28, 2000 among The CIT Financial Group Canada Ltd., Royal Bank of Canada, as administrative agent, Canadian Imperial Bank of Commerce and The Chase Manhattan Bank of Canada as syndication agents and the lenders party thereto. "EXTENSION NOTICE" has the meaning as set forth in Section 2.6(1). "FACE AMOUNT" means in respect of a Bankers' Acceptance, a Draft or a BA Equivalent Note, as the case may be, the amount payable to the holder thereof on its maturity. "FEE PAYMENT DATE" means the last day of each calendar quarter, commencing March 31, 2001, the Termination Date and the Maturity Date. "FINANCING LEASE" means any lease of property, real or personal, the obligations of the lessee in respect of which are required in accordance with GAAP to be capitalized on a balance sheet of the lessee. "GAAP" means generally accepted accounting principles in Canada in effect from time to time. "GOVERNMENTAL AUTHORITY" means any nation or government, any province, state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "GUARANTY" means the guaranty dated as of March 27, 2001 executed by the Guarantor in favour of the Administrative Agent substantially in the form attached hereto as Exhibit G; and from and after an assignment and assumption as contemplated in Section 7.2, means the Guaranty delivered to the Administrative Agent pursuant to such Section 7.2. "GUARANTOR" means The CIT Group, Inc. and its successors and assigns. "HEDGING AGREEMENT" means any swap, cap, collar, floor or other hedging agreement in respect of interest rates or currency exchange rates. For purposes of this Agreement, the amount of any obligations or liabilities in respect of any -6- Hedging Agreement shall be the amounts, including any termination payments, that would be required to be paid to a counterparty upon early termination (in accordance with customary industry standards) rather than any notional amount with regard to which payments may be calculated. "INDEBTEDNESS" means such Person's (i) obligations for borrowed money, (ii) obligations representing the deferred purchase price of property or services other than accounts payable arising in the ordinary course of such Person's business, (iii) obligations, whether or not assumed, secured by Liens on property now or hereafter owned or acquired by such Person (other than carriers', warehousemen's, mechanics', repairmen's or other like non-consensual statutory Liens arising in the ordinary course of business), (iv) obligations which are evidenced by notes, acceptances, or other similar instruments, (v) capitalized lease obligations, (vi) contingent obligations with respect to the Indebtedness of another Person, including but not limited to the obligation or liability of another which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes contingently liable upon; provided that any Indebtedness owing by the Company to any of its Subsidiaries or by any Subsidiary of the Company to the Company or by any Subsidiary of the Company to any other Subsidiary of the Company or any contingent obligation in respect thereof shall not constitute Indebtedness for purposes of this Agreement, and (vii) obligations for which such Person is obligated in respect of a letter of credit. For purposes of this Agreement, Indebtedness shall not include (A) any indebtedness of such Person to the extent (I) such indebtedness does not appear on the financial statement of such Person, (II) such indebtedness is recourse only to certain assets of such Person, and (III) the assets to which such indebtedness is recourse only appear on the financial statements of such Person net of such indebtedness, or (B) any indebtedness or other obligations issued by any Person (or by a trust or other entity established by such Person or any of its affiliates) which are primarily serviced by the cash flows of a discrete pool of receivables, leases or other financial assets which have been sold or transferred by the Company or any Subsidiary in securitization transactions which, in accordance with GAAP, are accounted for as sales for financial reporting purposes. It is understood and agreed that (1) the amount of any Indebtedness described in clause (iii) for which recourse is limited to certain property of such Person shall be the lower of (x) the amount of the obligation and (y) the fair market value of the property of such Person securing such obligation, and (2) the amount of any obligation described in clause (vi) shall be the lower of (x) the stated or determinable amount of the primary obligation in respect of which such contingent obligation is made, and (y) the maximum amount for which such Person may be liable pursuant to the terms of the agreement embodying such contingent obligation unless such primary obligation and the maximum amount for which such Person may be liable are not stated or determinable, in which case the amount of such -7- contingent obligation shall be such Person's maximum, reasonably anticipated liability in respect thereof as determined by such Person in good faith. "INTEREST PAYMENT DATE" means as to any Canadian Prime Rate Loan, the last day of each month during which such Canadian Prime Rate Loan is outstanding and the Termination Date. "LENDING INSTALLATION" means any branch or office of any Bank selected by such Bank to be a Lending Installation in accordance with Section 2.17. "LIEN" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Financing Lease having substantially the same economic effect as any of the foregoing). "MATERIAL ADVERSE EFFECT" means a material adverse effect on the ability of the Guarantor to perform its obligations under the Guaranty. "MATURITY DATE" means the first anniversary of the Termination Date (as such Termination Date may be extended from time to time). "NET WORTH COVENANT" means Section 6.3 of the CIT U.S. Credit Agreement which is incorporated by reference in the Guaranty pursuant to Section 6 of the Guaranty. "NON-EXTENDING BANKS" has the meaning as set forth in Section 2.6(1) "NOTICE OF BORROWING" has the meaning as set forth in Section 2.2 "PARTICIPANT" has the meaning as set forth in Section 10.6(2). "PERSON" means an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature. "RBC" has the meaning as set forth in the preamble hereto. "REFERENCE BANKS" means two Schedule II Banks or Schedule III Banks as so designated by the Company and the Administrative Agent. "REQUIRED BANKS" means at a particular time, Banks whose Commitment Percentages aggregate at least 51% or, if the Aggregate Commitment has been terminated or for purposes of any decision to accelerate the Accommodations -8- Outstanding pursuant to Section 8.1, Banks in the aggregate holding at least 51% of the Accommodations Outstanding. "REQUIREMENT OF LAW" means as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or final determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any material portion of its property or to which such Person or any material portion of its property is subject. "RESPONSIBLE OFFICER" means the chief executive officer, the vice chairman, the president, the secretary, any vice president of the Company or, with respect to financial matters, (i) the chief financial officer of the Company, (ii) the treasurer of the Company, or (iii) the controller of the Company. "SCHEDULE I BANK" means any Bank named on Schedule I to the BANK ACT (Canada). "SCHEDULE II BANK" means any Bank named on Schedule II to the BANK ACT (Canada). "SCHEDULE III BANK" means any Bank named on Schedule III to the BANK ACT (Canada). "SUBSIDIARY" means as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a "SUBSIDIARY" or to "SUBSIDIARIES" in this Agreement shall refer to a Subsidiary or Subsidiaries of the Company. "SYNDICATION AGENT" has the meaning as set forth in the preamble hereto. "TERMINATION DATE" means March 26, 2002, as such date may be extended from time to time in accordance with Section 2.6. "TRANSFER EFFECTIVE DATE" has the meaning as set forth in Section 10.6(3). "TRANSFEREE" has the meaning as set forth in Section 10.7. "U.S. DOLLARS" or "US$" means the lawful currency for the time being of the United States of America. -9- "UTILIZATION FEE" has the meaning as set forth in Section 2.5. SECTION 1.2 OTHER DEFINITIONAL PROVISIONS (1) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto. (2) As used herein and in any certificate or other document made or delivered pursuant hereto, accounting terms relating to the Company and its Subsidiaries not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP. (3) The words "HEREOF", "HEREIN" and "HEREUNDER" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, subsection, Schedule and Exhibit references are to this Agreement unless otherwise specified. (4) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. ARTICLE 2 AMOUNT AND TERMS OF COMMITMENTS SECTION 2.1 COMMITMENTS. Subject to the terms and conditions hereof, each Bank severally agrees to make Accommodations available to the Company, from time to time during the Commitment Period in an aggregate principal amount at any one time outstanding not to exceed the amount of such Bank's Commitment. Notwithstanding anything to the contrary contained in this Section 2.1, at no time shall the aggregate of Accommodations Outstanding of all Banks exceed the Aggregate Commitment. During the Commitment Period the Company may borrow, pay or prepay and reborrow hereunder, all in accordance with the terms and conditions set forth in this Agreement. SECTION 2.2 BORROWING PROCEDURE. Subject to the terms and conditions hereof, the Company may request Canadian Prime Rate Loans during the Commitment Period on any Business Day, provided that the Company shall give the Administrative Agent irrevocable notice, substantially in the form of Exhibit E (a "NOTICE OF BORROWING"), (which notice must be received by the Administrative Agent prior to 10:00 A.M., Toronto time, on the Borrowing Date), specifying (i) the amount to be borrowed, and (ii) the requested -10- Borrowing Date. Each Borrowing shall be in an amount equal to $10,000,000 or a whole multiple of $1,000,000 in excess thereof (or, if the then Aggregate Available Commitment is less than $10,000,000, such lesser amount). Upon receipt of any such notice from the Company, the Administrative Agent shall promptly notify the Lending Installation of each Bank thereof. Each Bank will make the amount of its pro rata share of each Borrowing available to the Administrative Agent at the office of the Administrative Agent specified in Section 10.2 prior to 1:00 P.M., Toronto time, on the Borrowing Date requested by the Company in funds immediately available to the Administrative Agent. The Administrative Agent shall make the funds so received from the Banks immediately available to the Company at the Administrative Agent's aforesaid address or to an account designated by the Company. SECTION 2.3 REPAYMENT OF CANADIAN PRIME RATE LOANS; EVIDENCE OF DEBT. (1) The Company unconditionally promises to pay to the Administrative Agent for the account of the relevant Bank on the Maturity Date (or such earlier date as the Canadian Prime Rate Loans become due and payable pursuant to Section 2.8 or Section 8.1), the unpaid principal amount of each Canadian Prime Rate Loan made to it by such Bank. The Company further agrees to pay interest in immediately available funds at the office of the Administrative Agent on the unpaid principal amount of Canadian Prime Rate Loans from time to time from the date hereof until payment in full thereof at the rates per annum, and on the dates, set forth in Section 2.10. (2) The Administrative Agent shall maintain in accordance with its usual practice accounts and records evidencing the Indebtedness of the Company to each Bank resulting from the Accommodations made by such Bank to the Company, including (i) the amount of each Accommodation made hereunder, whether such Accommodation is a Canadian Prime Rate Loan, a Bankers' Acceptance or a BA Equivalent Note, and the maturity date (if any) applicable thereto, and (ii) the amounts of principal and interest payable and paid to such Bank from time to time hereunder. (3) The accounts and records maintained pursuant to Section 2.3(2) shall be prima facie evidence of the items contained therein; provided, however, that the failure of any Bank or the Administrative Agent to maintain such account or such records, or any error therein, shall not in any manner affect the obligation of the Company to repay (with applicable interest) any Accommodation made to the Company by such Bank in accordance with the terms of this Agreement. -11- SECTION 2.4 FACILITY FEE; ADMINISTRATIVE AGENT'S FEE. (1) The Company agrees to pay to the Administrative Agent for the account of each Bank a non-refundable facility fee at the Applicable Facility Fee Rate per annum (i) on the daily average amount of such Bank's Commitment (whether borrowed or unborrowed) from and including the date hereof to and excluding the Termination Date, and (ii) on the daily average amount of each Bank's Accommodations Outstanding from and including the Termination Date to and excluding the Maturity Date, in each case calculated daily and payable quarterly in arrears and on each Fee Payment Date. (2) The Company will pay to the Administrative Agent, for its own account, an agent's fee equal to the amount agreed upon in writing between the Company and the Administrative Agent, payable to the Administrative Agent in such manner as the Company and the Administrative Agent may agree. Each Bank acknowledges that the Administrative Agent is being paid certain other fees for its own account in connection with the financing pursuant to this Agreement in addition to the fees described in this Agreement. SECTION 2.5 UTILIZATION FEE. If the average daily amount of Accommodations Outstanding for the calendar quarter preceding a Fee Payment Date (or such shorter period beginning with the date hereof or ending with the Maturity Date) is in excess of 50% of the average daily Aggregate Commitment for such calendar quarter or period (or, in the case of any period after the Termination Date, 50% of the Aggregate Commitment immediately prior to the Termination Date), the Company agrees to pay to the Administrative Agent for the account of the Banks a non-refundable utilization fee (the "UTILIZATION FEE") at the Applicable Utilization Fee Rate on such average daily aggregate principal amount of the Accommodations Outstanding during such calendar quarter (or shorter period), payable in arrears on each Fee Payment Date. SECTION 2.6 EXTENSION OF TERMINATION DATE. (1) The Company, on its behalf and on behalf of the Guarantor, may by written notice to the Administrative Agent (such notice being an "EXTENSION NOTICE") given no earlier than sixty days and no later than forty-five days prior to the Termination Date, request the Banks to consider an extension of the then applicable Termination Date to a date 364 days after the then applicable Termination Date. The Administrative Agent shall promptly transmit any Extension Notice to each Bank. Each Bank shall notify the Administrative Agent whether it wishes to extend the then applicable Termination Date no earlier than thirty days, and no later than twenty days, prior to such Termination Date, and any such notice given by a Bank to the Administrative Agent, once given, shall be irrevocable as to such Bank. Any Bank which -12- does not expressly notify the Administrative Agent prior to such twenty day period that it wishes to so extend the then applicable Termination Date shall be deemed to have rejected the Company's request for extension of such Termination Date. Banks consenting to extend the then applicable Termination Date are hereinafter referred to as "CONTINUING BANKS", and Banks declining to consent to extend such Termination Date (or Banks deemed to have so declined) are hereinafter referred to as "NON-EXTENDING BANKS". If the Required Banks have elected (in their sole and absolute discretion) to so extend the Termination Date, the Administrative Agent shall notify the Company of such election by such Required Banks no later than fifteen days prior to such Termination Date, and effective on the date of such notice by the Administrative Agent to the Company, the Termination Date shall be automatically and immediately so extended. No extension will be permitted hereunder without the consent of the Required Banks and in no event shall the Termination Date be extended beyond March 23, 2005. Upon the delivery of an Extension Notice and upon the extension of the Termination Date pursuant to this Section 2.6, the Company shall be deemed to have represented and warranted on and as of the date of such Extension Notice and the effective date of such extension, as the case may be, that no Default or Event of Default has occurred and is continuing and that the representations and warranties of the Company contained herein are true and correct in all material respects on and as of such date as if made on and as of such date except (i) to the extent that such representations and warranties expressly relate to an earlier date, and (ii) for changes in the Schedules hereto reflecting transactions permitted by this Agreement. Notwithstanding anything contained in this Agreement to the contrary, no Bank shall have any obligation to extend the Termination Date, and each Bank may at its option, unconditionally and without cause, decline to extend the Termination Date. (2) If the Termination Date shall have been extended in accordance with Section 2.6(1), all references herein to the "TERMINATION DATE" shall refer to the Termination Date as so extended. (3) If any Bank shall determine not to extend the Termination Date as requested by any Extension Notice given by the Company pursuant to Section 2.6(1), the Commitment of such Bank shall terminate on the Termination Date without giving any effect to such proposed extension, and the Company shall on such date pay to the Administrative Agent, for the account of such Bank, the amount (including any accrued but unpaid interest) of such Bank's Accommodations Outstanding, together with any amounts payable to such Bank pursuant to Section 2.15 and any fees or other amounts owing to such Bank under this Agreement; provided that if the Company has replaced such Non-Extending Bank pursuant to Section 2.6(4) below then the provisions of -13- such Section shall apply. The Aggregate Commitment shall be reduced by the amount of the Commitment of such Non-Extending Bank to the extent the Commitment of such Non-Extending Bank has not been transferred to one or more Continuing Banks pursuant to Section 2.6(4) below. (4) A Non-Extending Bank shall be obligated, at the request of the Company and subject to payment by the Company to the Administrative Agent for the account of such Non-Extending Bank of the amount (including any accrued but unpaid interest) of such Bank's Accommodations Outstanding, together with any amounts payable to such Bank pursuant to Section 2.15 and any fees or other amounts owing to such Bank under this Agreement, to transfer without recourse, representation, warranty (other than good title to its Accommodations Outstanding) or expense to such Non-Extending Bank, at any time prior to the Termination Date applicable to such Non-Extending Bank, all of its rights and obligations hereunder to another financial institution or group of financial institutions nominated by the Company and willing to participate in the facility in the place of such Non-Extending Bank; provided that, if such transferee is not a Bank, such transferee(s) satisfies all the requirements of this Agreement and the Administrative Agent shall have consented to such transfer, which consent shall not be unreasonably withheld. Each such transferee shall become a Continuing Bank hereunder in replacement of the Non-Extending Bank and shall enjoy all rights and assume all obligations on the part of the Banks set forth in this Agreement. Simultaneously with such transfer, each such transferee shall execute and deliver to the Administrative Agent a written agreement assuming all obligations of the Non-Extending Bank it is replacing set forth in this Agreement, which agreement shall be reasonably satisfactory in form and substance to the Administrative Agent. (5) If the Termination Date shall have been extended in respect of Continuing Banks in accordance with Section 2.6(1), any Notice of Borrowing pursuant to Section 2.2 specifying a Borrowing Date occurring after the Termination Date applicable to a Non-Extending Bank shall (i) have no effect in respect of such Non-Extending Bank, and (ii) not specify a requested aggregate principal amount exceeding the Aggregate Available Commitment (calculated on the basis of the Commitments of the Continuing Banks). SECTION 2.7 TERMINATION OR REDUCTION OF COMMITMENTS. The Company shall have the right, upon not less than three Business Days' notice to the Administrative Agent, to terminate the Aggregate Commitment or, from time to time, to reduce the amount of the Aggregate Commitment, provided that no such termination or reduction shall be permitted if, after giving effect thereto and to any prepayments made in respect of the Accommodations Outstanding on -14- the effective date of such termination or reduction, the aggregate amount of Accommodations Outstanding would exceed the Aggregate Commitment then in effect. Any such reduction shall be in an amount equal to $10,000,000 or a whole multiple of $1,000,000 in excess thereof and shall reduce permanently the Commitments then in effect. SECTION 2.8 OPTIONAL PREPAYMENTS OF ACCOMMODATIONS. The Company may at any time and from time to time prepay any principal amount of Accommodations Outstanding in whole or in part, without premium or penalty, upon at least two Business Days' irrevocable notice to the Administrative Agent, specifying the date and amount of prepayment. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with, in the case of a Canadian Prime Rate Loan, accrued interest to such date on the amount prepaid. Partial prepayments shall be in an aggregate principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Any amount prepaid in respect of a Bankers' Acceptance, Draft or BA Equivalent Note will be held by the Administrative Agent in an interest bearing account (such interest being for the account of the Borrower) on behalf of the Banks to fund such Bankers' Acceptance, Draft or BA Equivalent Note upon their maturity. SECTION 2.9 APPLICABLE INTEREST RATE MARGINS, FACILITY FEE RATE AND UTILIZATION FEE. The Applicable Canadian Prime Margin, the Applicable BA Margin, the Applicable Facility Fee Rate and the Applicable Utilization Fee Rate (the Applicable Canadian Prime Margin, the Applicable BA Margin, the Applicable Facility Fee Rate and the Applicable Utilization Fee Rate, individually or collectively, the "APPLICABLE MARGIN") shall be equal to the percentage per annum set forth below: Applicable Canadian Prime Margin .00% Applicable BA Margin .23% Applicable Facility Fee Rate .07% Applicable Utilization Fee Rate .05% SECTION 2.10 INTEREST RATES AND PAYMENT DATES. (1) Each Canadian Prime Rate Loan shall bear interest for each day during which such Canadian Prime Rate Loan is outstanding at a rate per annum equal to the Canadian Prime Rate plus the Applicable Canadian Prime Margin. (2) If all or a portion of (i) the principal amount of any Accommodation Outstanding or (ii) any interest payable thereon, any fee or any other amount payable pursuant to the terms of this Agreement (other than attorneys' fees -15- incurred in connection with the enforcement of the terms hereof) shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum which is the Canadian Prime Rate plus 2%, in each case from the date of such non-payment until such amount is paid in full (after as well as before judgment). (3) Interest on each Canadian Prime Rate Loan shall be calculated daily and payable in arrears on each Interest Payment Date applicable to such Canadian Prime Rate Loan, the Maturity Date and upon any prepayment of such Canadian Prime Rate Loan, provided that interest accruing pursuant to Section 2.10(2) shall be payable on demand. SECTION 2.11 COMPUTATION OF INTEREST AND FEES. (1) Interest on Canadian Prime Rate Loans and all fees shall be calculated on the basis of a 365 (or 366, as the case may be) day year for the actual days elapsed. Any change in the interest rate on a Canadian Prime Rate Loan resulting from a change in the Canadian Prime Rate shall become effective as of the opening of business on the day on which such change in the Canadian Prime Rate is announced. Notwithstanding anything to the contrary in this Agreement, interest paid or becoming due hereunder shall in no event exceed the maximum rate permitted by applicable law. (2) For purposes of the INTEREST ACT (Canada), (i) whenever any interest under this Agreement is calculated using a rate based on a year of 365 days, such rate determined pursuant to such calculation, when expressed as an annual rate, is equivalent to (x) the applicable rate based on a year of 365 days, (y) multiplied by the actual number of days in the calendar year in which the period for which such interest or fee is payable (or compounded) ends, and (z) divided by 365, (ii) the principle of deemed reinvestment of interest does not apply to any interest calculation under this Agreement; and (iii) the rates of interest stipulated in this Agreement are intended to be nominal rates and not effective rates or yields. (3) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Company and the Banks in the absence of manifest error. The Administrative Agent shall, at the request of the Company, deliver to the Company a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to Section 2.10. SECTION 2.12 PRO RATA TREATMENT AND PAYMENTS. (1) Each Accommodation made by the Banks hereunder, each payment by the Company on account of any fee hereunder and, except as contemplated by -16- Section 2.6(3), Section 2.16, Section 2.18, and Section 2.19 any reduction of the Commitments of the Banks shall be made pro rata according to the respective Commitment Percentages of the Banks. Except as contemplated by Section 2.6(3), Section 2.16, Section 2.18 and Section 2.19 each payment (including each prepayment) by the Company on account of Accommodations Outstanding shall be made pro rata according to the respective Accommodations Outstanding then held by the Banks. Each Bank agrees that in computing such Bank's portion of any Accommodation to be made hereunder, the Administrative Agent may, in its discretion, round each Bank's percentage of such Accommodation to the next higher or lower whole dollar amount. All payments (including prepayments) to be made by the Company hereunder, whether on account of principal, interest, fees or otherwise, shall be made without set off or counterclaim and shall be made prior to 12:00 Noon, Toronto time, on the due date thereof to the Administrative Agent, for the account of the Banks, at the Administrative Agent's office specified in Section 10.2, in Dollars and in immediately available funds. The Administrative Agent shall distribute such payments to the Lending Installation of the Banks promptly upon receipt in like funds as received. If any payment hereunder becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension. (2) Unless the Administrative Agent shall have been notified in writing by any Bank prior to the date of any Accommodation that such Bank will not make the amount that would constitute its Commitment Percentage of the Accommodation on such date available to the Administrative Agent, the Administrative Agent may assume that such Bank has made such amount available to the Administrative Agent on such date, and the Administrative Agent may, in reliance upon such assumption, make available to the Company a corresponding amount. If such amount is made available to the Administrative Agent on a date after the date of any Accommodation, such Bank shall pay to the Administrative Agent on demand an amount equal to the product of (i) the rate equal to the cost of funds of the Administrative Agent, times (ii) the amount of such Bank's Commitment Percentage of such Accommodation, times (iii) a fraction the numerator of which is the number of days that elapse from and including the date of any Accommodation to the date on which such Bank's Commitment Percentage of such Accommodation shall have become immediately available to the Administrative Agent and the denominator of which is 365. A certificate of the Administrative Agent submitted to any Bank with respect to any amounts owing under this Section 2.12(2) shall be conclusive in the absence of manifest error. If such Bank's Commitment Percentage of such Accommodation is not in fact made -17- available to the Administrative Agent by such Bank within three Business Days of the date of such Accommodation, the Administrative Agent shall notify the Company of such Bank's failure to fund, and shall be entitled to recover such amount with interest thereon at the rate per annum applicable to Canadian Prime Rate Loans hereunder, on demand, from the Company. SECTION 2.13 REQUIREMENTS OF LAW. (1) In the event that any Bank shall have determined that any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Bank or the Lending Installation of such Bank or any corporation controlling such Bank with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority, in each case, made subsequent to the date hereof, does or shall have the effect of reducing the rate of return on such Bank's, such Lending Installation's or such corporation's capital as a consequence of its obligations hereunder to a level below that which such Bank, such Lending Installation or such corporation could have achieved but for such change or compliance (taking into consideration such Bank's, such Lending Installation's or such corporation's policies with respect to capital adequacy) by an amount deemed by such Bank to be material, then from time to time, after submission by such Bank to the Company of a written request therefor, the Company shall pay to such Bank within 90 days after demand such additional amount or amounts as will compensate such Bank for such reduction. Each such request shall be accompanied by such information in respect of the basis for the claim made thereby and the method of computation thereof as such Bank shall at the time customarily provide to other borrowers deemed by it to be similarly situated. This covenant shall survive the termination of this Agreement and the payment of all other amounts payable hereunder. (2) Each Bank, through the Administrative Agent, will promptly notify the Company of any event of which it has knowledge, occurring after the date hereof, which will entitle such Bank to compensation pursuant to this Section. Notwithstanding the foregoing, no Bank shall be entitled to any compensation described in this Section unless, at the time it requests such compensation, it is the policy or general practice of such Bank to request compensation for comparable costs in similar circumstances under comparable provisions of other credit agreements for comparable customers (as determined by such Bank) unless specific facts or circumstances applicable to the Company or the transactions contemplated by this Agreement would alter such policy or general practice. If any Bank fails to give the notice described in this Section 2.13(2) within 90 days after it obtains such actual knowledge of the event required to be described in such notice, -18- such Bank shall, with respect to any compensation that would otherwise be owing to such Bank under this Section 2.13, only be entitled to payment for increased costs incurred from and after the date that such Bank does give such notice. If the Company shall reimburse any Bank pursuant to this Section for any cost and such Bank shall subsequently receive a refund in respect thereof, such Bank shall so notify the Company and, upon its request, will pay to the Company the portion of such refund that such Bank shall determine in good faith to be allocable to the costs so reimbursed. SECTION 2.14 TAXES. (1) All payments made by the Company under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding, in the case of the Administrative Agent and each Bank, taxes based on or measured by net income imposed on the Administrative Agent or such Bank, as the case may be, as a result of a present or former connection between the jurisdiction of the government or taxing authority imposing such tax and the Administrative Agent or such Bank (excluding a connection arising solely from the Administrative Agent or such Bank having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement) or any political subdivision or taxing authority thereof or therein (all such non-excluded taxes, levies, imposts, duties, charges, fees, deductions and withholdings being hereinafter called "TAXES"). If any Taxes are required to be withheld from any amounts payable to the Administrative Agent or any Bank hereunder, the amounts so payable to the Administrative Agent or such Bank shall be increased to the extent necessary to yield to the Administrative 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 payable by the Company, promptly thereafter the Company shall send to the Administrative 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 Company showing payment thereof. If such evidence of payment is unavailable, other evidence of such payment, satisfactory to the Administrative Agent, shall be provided by the Company. If the Company fails to pay any Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, the Company shall indemnify the Administrative Agent and the Banks for any incremental taxes, interest or penalties that may become payable by the Administrative Agent or any Bank as a result of any such failure. -19- (2) Each Bank represents and warrants to the Company that under currently applicable law and treaties no Taxes will be required to be withheld by the Company with respect to any payments to be made to such Bank hereunder. (3) If any Bank (or Transferee) or the Administrative Agent shall become aware that it is entitled to receive a refund or credit (such credit to include any increase in any foreign tax credit) as a result of Taxes (including any penalties or interest with respect thereto) as to which it has been indemnified by the Company pursuant to this Section 2.14, it shall promptly notify the Company of the availability of such refund or credit and shall, within 30 days after receipt of a request by the Company, apply for such refund or credit at the Company's expense, and in the case of any application for such refund or credit by the Company, shall, if legally able to do so, deliver to the Company such certificates, forms or other documentation as may be reasonably necessary to assist the Company in such application. If any Bank (or Transferee) or the Administrative Agent receives a refund or credit (such credit to include any increase in any foreign tax credit) in respect to any Taxes as to which it has been indemnified by the Company pursuant to this Section 2.14, it shall promptly notify the Company of such refund or credit and shall, within 60 days after receipt of such refund or the benefit of such credit (such benefit to include any reduction of the taxes for which any Bank (or Transferee) or the Administrative Agent would otherwise be liable due to any increase in any foreign tax credit available to such Bank (or Transferee) or the Administrative Agent), repay the amount of such refund or benefit of such credit (with respect to the credit, as determined by the Bank, Transferee or Administrative Agent in its sole, reasonable judgment) to the Company (to the extent of amounts that have been paid by the Company under this Section 2.14 with respect to Taxes giving rise to such refund or credit), plus any interest received with respect thereto, net of all reasonable out-of-pocket expenses of such Bank (or Transferee) or the Administrative Agent and without interest (other than interest actually received from the relevant taxing authority or other Governmental Authority with respect to such refund or credit); provided, however, that the Company, upon the request of such Bank (or Transferee) or the Administrative Agent, agrees to return the amount of such refund or benefit of such credit (plus interest) to such Bank (or Transferee) or the Administrative Agent in the event such Bank (or Transferee) or the Administrative Agent is required to repay the amount of such refund or benefit of such credit to the relevant taxing authority or other Governmental Authority. (4) The agreements in this subsection shall survive the termination of this Agreement and the payment of all other amounts payable hereunder. -20- SECTION 2.15 INDEMNITY. The Company agrees to indemnify each Bank and to hold each Bank harmless from any loss or expense which such Bank may sustain or incur as a consequence of a default by the Company in making any prepayment after the Company has given a notice thereof in accordance with the provisions of this Agreement, including any such loss or expense arising from the reemployment of funds obtained by it (or which it has arranged to obtain) or from fees payable to terminate the deposits from which such funds were obtained (or which it has arranged to obtain). Nothing in this Section shall be deemed to give the Company any right to prepay any Accommodation Outstanding, the prepayment of which is otherwise prohibited pursuant to the terms of this Agreement. This covenant shall survive the termination of this Agreement and the payment of all other amounts payable hereunder. SECTION 2.16 ACTIONS OF BANKS. Each Bank agrees to use reasonable efforts (including reasonable efforts to change the Lending Installation for its Accommodations) to avoid or minimize any amounts which might be payable pursuant to Section 2.13 or Section 2.14; provided, however, that such efforts shall not cause the imposition on such Bank of any additional costs or legal or regulatory burdens deemed by such Bank to be material. In the event that such reasonable efforts are insufficient to avoid all amounts that might be payable pursuant to Section 2.13 or Section 2.14, then the Company may remove any such Bank pursuant to Section 2.18 or replace any such Bank pursuant to Section 2.19. SECTION 2.17 LENDING INSTALLATIONS. Each Bank may hold its Accommodations Outstanding at any Lending Installation selected by it and may change its Lending Installation from time to time, provided that no such Bank shall be entitled to receive any greater amount under Section 2.13, Section 2.14, Section 2.15, or Section 10.5 as a result of a transfer of any such Accommodations Outstanding to a different office of such Bank than it would be entitled to immediately prior thereto unless such claim would have arisen even if such transfer had not occurred. All provisions of this Agreement shall apply to any such Lending Installation. Each Bank may, by written or telex notice to the Company and the Administrative Agent, designate a Lending Installation through which the Accommodations will be made by it and for whose account payments are to be made. SECTION 2.18 REMOVAL OF BANKS. The Company shall be permitted, from time to time in its discretion, to remove Banks from this Agreement and to reduce the Aggregate Commitment; provided, that (i) the Aggregate Commitment may not be reduced below $350,000,000 as a result of removal of one or more Banks from this Agreement -21- pursuant to this Section, (ii) after giving effect to such removal, no Bank shall have a Commitment hereunder which exceeds an amount equal to 20% of the Aggregate Commitment, and (iii) a Bank may not be removed from this Agreement at any time a Default or an Event of Default exists and remains uncured or unwaived under this Agreement. If the Company elects to terminate the Commitment of a Bank, it shall give not less than 30 days written notice to the Administrative Agent and such Bank. On the effective date of such termination, the Company shall pay to the Administrative Agent, for the account of such Bank, in immediately available funds, an amount equal to all Accommodations Outstanding and other amounts (including accrued interest and fees) owing to such Bank plus the amounts, if any, owing to such Bank under Section 2.13, Section 2.14, Section 2.15, and Section 10.5. Notwithstanding the removal of any Bank pursuant to this Section, such Bank shall continue to have all such rights as would survive the termination of this Agreement under Section 2.13, Section 2.14, Section 2.15 and Section 10.5. SECTION 2.19 REPLACEMENT OF BANKS. In the event that any Bank (a "NOTIFYING BANK") (i) shall demand payment by the Company of any amount pursuant to Section 2.13 or Section 2.14, (ii) shall have failed to make available an Accommodation on the date on which it was obligated to do so, or (iii) shall have failed to consent to any waiver, amendment or modification of this Agreement that has been consented to by the Required Banks, the Company may, upon notice to such Notifying Bank and the Administrative Agent, nominate a new financial institution or group of financial institutions willing to participate in the facility in the place of such Notifying Bank ("REPLACEMENT BANK"). Upon receipt of such notice from the Company and upon the consent of the Administrative Agent as to the Replacement Bank, which consent shall not be unreasonably withheld, such Notifying Bank shall be obligated to transfer without recourse, representation, warranty (other than that it has not in any way transferred, assigned, encumbered, sold or conveyed its rights under its Accommodations) or expense to such Notifying Bank, all of its rights (other than rights that would survive the termination of this Agreement pursuant to Section 2.13, Section 2.14, Section 2.15 and Section 10.5) and obligations hereunder to the Replacement Bank; provided that the Replacement Bank satisfies all of the requirements of this Agreement and pays such Notifying Bank all amounts owing to such Notifying Bank under this Agreement and the Company pays such Notifying Bank any funding losses incurred pursuant to Section 2.15, if any, as a result of such replacement. This Section 2.19 shall in no way affect the right of the Company to replace, remove or add a Bank pursuant to any other provision of this Agreement. -22- ARTICLE 3 BANKERS' ACCEPTANCES SECTION 3.1 ACCEPTANCES AND DRAFTS. (1) Each Bank severally agrees, on the terms and conditions of this Agreement and from time to time on any Business Day prior to the Termination Date, (i) in the case of a Bank which is willing and able to accept Drafts, to create acceptances ("BANKERS' ACCEPTANCES") by accepting Drafts and to purchase such Bankers' Acceptances in accordance with Section 3.3(2), and (ii) in the case of a Bank which is unwilling or unable to accept Drafts, to purchase completed Drafts (which have not and will not be accepted by the Bank or any other Bank in accordance with Section 3.3(2)). (2) Each Drawing shall be in a minimum aggregate Face Amount of $10,000,000 and in an integral multiple of $1,000,000 thereafter and shall consist of the creation and purchase of Bankers' Acceptances or the purchase of Drafts on the same day, in each case for the Drawing Purchase Price, effected or arranged by the Banks in accordance with Section 3.3 and their respective Bank's Commitment. (3) If the Administrative Agent determines, in good faith, which determination shall be final, conclusive and binding upon the Company and the Banks, that the Bankers' Acceptances to be created and purchased or Drafts to be purchased on any Drawing (upon a conversion or otherwise) will not be created and purchased ratably by the Banks in accordance with Section 3.1(2) and Section 3.3(3), then the requested Face Amount of Bankers' Acceptances and BA Equivalent Notes relating to such Drawing shall be reduced to such lesser amount as the Administrative Agent determines will permit such rateable sharing and the amount by which the requested Face Amount shall have been so reduced shall be converted or continued, as the case may be, as a Canadian Prime Rate Loan under the Agreement to be made contemporaneously with the Drawing. SECTION 3.2 FORM OF DRAFTS. Each Draft presented by the Company (i) shall be in a minimum amount of $100,000 and integral multiples of $100,000 thereafter, (ii) shall be dated the date of the Drawing, and (iii) shall mature and be payable by the Company (in common with all other Drafts presented in connection with such Drawing) on a Business Day which occurs approximately 1, 2, 3 or 6 months after the Drawing Date and on or prior to the Termination Date and which would not, in the opinion of the Administrative Agent, conflict with the Termination Date. -23- SECTION 3.3 PROCEDURE FOR DRAWING. (1) Each Drawing shall be made on notice (a "DRAWING NOTICE") given by the Company to the Administrative Agent not later than 10:00 a.m. (Toronto time) on the Business Day before the Drawing. Each Drawing Notice shall be in substantially the form of Exhibit F, shall be irrevocable and binding on the Company and shall specify (i) the Drawing Date; (ii) the aggregate Face Amount of Drafts to be accepted and purchased (or purchased, as the case may be), and (iii) the contract maturity date for such Drafts. (2) Not later than 2:00 p.m. (Toronto time) on an applicable Drawing Date, each Bank shall (i) complete one or more Drafts in accordance with the Drawing Notice, accept such Drafts and purchase the Bankers' Acceptances thereby created for the Drawing Purchase Price, or (ii) complete one or more Drafts in accordance with the Drawing Notice and purchase such Drafts for the Drawing Purchase Price. In each case, upon receipt of an amount equal to the difference between (i) such Drawing Purchase Price, and (ii) the applicable aggregate Drawing Fee, and upon fulfilment of the applicable conditions set forth in Article 5, the Administrative Agent shall make such funds available to the Company in accordance with Article 2. (3) The Company shall, at the request of a Bank, issue one or more non-interest bearing promissory notes (each a "BA EQUIVALENT NOTE") payable on the date of maturity of the unaccepted Draft referred to below, in such form as such Bank may specify, in a principal amount equal to the Face Amount of, and in exchange for, any unaccepted Drafts which such Bank has purchased or has arranged to have purchased in accordance with Section 3.3(2). (4) Bankers' Acceptances purchased by a Bank hereunder may be held by it for its own account until the contract maturity date or sold by it at any time prior thereto in any relevant market therefor in Canada, in such Person's sole discretion. SECTION 3.4 PRESIGNED DRAFT FORMS. (1) To enable the Banks to make Drawings in the manner specified in this Article 3, the Company shall supply each Bank with such number of Drafts as such Banks may reasonably request, duly endorsed and executed on behalf of the Company. Each Bank shall exercise such care in the custody and safekeeping of Drafts as it would exercise in the custody and safekeeping of similar property owned by it. Each Bank will, upon request by the Company, promptly advise the Company of the number and designations, if any, of the uncompleted Drafts then held by it. The signature of any duly authorized officer of the Company on a Draft may be mechanically reproduced in facsimile and Drafts and Bankers' Acceptances bearing such facsimile -24- signature shall be binding upon the Company as if they had been manually signed by such officers. Notwithstanding that any of the individuals whose manual or facsimile signature appears on any Draft as one of such officers may no longer hold office at the date thereof or at the date of its acceptance by the Bank hereunder or at any time thereafter, any Draft or Bankers' Acceptance so signed shall be valid and binding upon the Company. (2) The Company irrevocably appoints each Bank as the attorney of the Company to (i) sign and endorse for and on behalf and in the name of the Company as drawer, Drafts drawn on such Bank payable to the order of the Company, to the order of such Bank or to the order of a clearing house, and (ii) to fill in the amount, date and maturity date of such Drafts, such acts to be undertaken by such Bank in accordance with written instructions given to such Bank by the Company. All Drafts signed or endorsed for and on behalf of the Company by a Bank in accordance with the written instructions of the Company shall be binding on the Company, all as if duly executed and issued by the Company. SECTION 3.5 PAYMENT, CONVERSION OR RENEWAL OF BANKERS' ACCEPTANCES. (1) Upon the maturity of a Bankers' Acceptance, Draft or BA Equivalent Note, the Company may (i) elect to issue a replacement Bankers' Acceptance, Draft or BA Equivalent Note by giving a Drawing Notice in accordance with Section 3.3(1), (ii) elect to have all or a portion of the Face Amount of such Bankers' Acceptance, Draft or BA Equivalent Note converted to a Canadian Prime Rate Loan, by giving a Notice of Borrowing in accordance with Section 2.2, or (iii) pay, on or before 10:00 a.m. (Toronto time) on the maturity date for such Bankers' Acceptance, Draft or BA Equivalent Note, an amount in Dollars equal to the Face Amount of such Bankers' Acceptance, Draft or BA Equivalent Note (notwithstanding that a Bank may be the holder thereof at maturity). Any such payment shall satisfy the Company's obligations under the Bankers' Acceptance, Draft or BA Equivalent Note to which it relates and the relevant Bank shall thereafter be solely responsible for the payment of such Bankers' Acceptances, Drafts or BA Equivalent Notes. (2) If the Company fails to pay any Bankers' Acceptance when due, or to issue a replacement Bankers' Acceptance, Draft or BA Equivalent Note in the Face Amount of such Bankers' Acceptance, Draft or BA Equivalent Note pursuant to Section 3.5(1), the unpaid amount due and payable in respect thereof shall be converted, as of such date, and without any necessity for the Company to give a Notice of Borrowing in accordance with Section 2.2, to a Canadian Prime Rate Loan made by the Banks ratably under this Agreement and shall bear interest calculated and payable as provided in Section 2.11. -25- SECTION 3.6 CIRCUMSTANCES MAKING BANKERS' ACCEPTANCES UNAVAILABLE. If any Bank determines in good faith, which determination shall be final, conclusive and binding upon the Company, and notifies the Company that, by reason of circumstances affecting the money market, there is no market for Bankers' Acceptances, then: (a) The right of the Company to request a Drawing from such Bank shall be suspended until such Bank determines that the circumstances causing such suspension no longer exist and such Bank so notifies the Company; (b) The portion of any Drawing Notice which is outstanding in respect of such Bank's PRO RATA portion of any Drawing shall be cancelled and such Bank's portion of the Drawing requested therein shall not be made; and (c) Such Bank shall promptly notify the Administrative Agent and the Company of the suspension of the Company's right to request a Drawing from such Bank and of the termination of any such suspension. ARTICLE 4 REPRESENTATIONS AND WARRANTIES SECTION 4.1 REPRESENTATIONS AND WARRANTIES. To induce the Banks to enter into this Agreement and to make the Accommodations, the Company hereby represents and warrants to the Administrative Agent and each Bank that: (a) CORPORATE EXISTENCE; COMPLIANCE WITH LAW. The Company (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and (ii) has the power and authority to conduct the business in which it is currently engaged. (b) CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The Company has the corporate power and authority to make, deliver and perform this Agreement and to borrow hereunder and has taken all necessary corporate action to authorize the borrowings on the terms and conditions of this Agreement and to authorize the execution, delivery and performance of this Agreement. No consent or authorization of, filing with or other act by or in respect of, any Governmental Authority or any other Person is required on the part of the Company in connection with the borrowings hereunder or with the -26- execution, delivery, performance, validity or enforceability of this Agreement. This Agreement has been duly executed and delivered on behalf of the Company. This Agreement constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). (c) NO LEGAL BAR. The execution, delivery and performance of this Agreement, the borrowings hereunder and the use of the proceeds thereof will not violate any Requirement of Law or material Contractual Obligation of the Company and will not result in, or require, the creation or imposition of any Lien on any of its material properties or revenues pursuant to any such Requirement of Law or material Contractual Obligation. (d) NO MATERIAL LITIGATION. (i) No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Company, threatened by or against the Company or any of its properties or revenues in any case that involves this Agreement, the execution, delivery and performance of this Agreement or the borrowings hereunder. (ii) No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Company, threatened by or against the Company or its properties or revenues which could reasonably be expected to result in a violation of the Net Worth Covenant. (e) NO DEFAULT. (i) The Company is not in default under or with respect to any of its Contractual Obligations in any respect which could reasonably be expected to result in a violation of the Net Worth Covenant. (ii) No Default or Event of Default has occurred and is continuing. (f) PURPOSE OF ACCOMMODATIONS. The proceeds of the Accommodations shall be used by the Company for general corporate purposes, including commercial paper back-up. -27- ARTICLE 5 CONDITIONS PRECEDENT SECTION 5.1 CONDITIONS TO INITIAL ACCOMMODATIONS. The agreement of each Bank to make the initial Accommodations requested to be made by it is subject to the satisfaction of the following conditions precedent: (a) CREDIT AGREEMENT. The Administrative Agent shall have received this Agreement, executed and delivered by a duly authorized officer of the Company, with a counterpart for each Bank. (b) GUARANTY. The Administrative Agent shall have received the Guaranty executed and delivered by a duly authorized officer of the Guarantor. (c) CORPORATE PROCEEDINGS OF THE COMPANY. The Administrative Agent shall have received, with a counterpart for each Bank, a copy of the resolutions, in form and substance satisfactory to the Administrative Agent, of the Board of Directors of the Company authorizing (i) the execution, delivery and performance of this Agreement, and (ii) the borrowings contemplated hereunder, certified by the Secretary or an Assistant Secretary of the Company as of the Closing Date pursuant to a certificate substantially in the form of Exhibit C-2, which certificate shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded. (d) CORPORATE PROCEEDINGS OF THE GUARANTOR. The Administrative Agent shall have received, with a counterpart for each Bank, a copy of the resolutions, in form and substance satisfactory to the Administrative Agent, of the Executive Committee of the Board of Directors of the Guarantor authorizing the execution, delivery and performance of the Guaranty, certified by the Secretary or an Assistant Secretary of the Guarantor as of the Closing Date pursuant to a certificate substantially in the form of Exhibit C-3, which certificate shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded. (e) CORPORATE DOCUMENTS. The Administrative Agent shall have received, with a counterpart for each Bank, true and complete copies of the certificate of incorporation and by-laws of each of the Company and the Guarantor, certified as of the Closing Date as complete and correct copies thereof by the Secretary or an Assistant Secretary of the Company or the Guarantor, as the case may be. -28- (f) NO CHANGE. Since December 31, 1998 and until the date of this Agreement, there shall have been no development or event which has had or could reasonably be expected to have a Material Adverse Effect and the Administrative Agent shall have received an officer's certificate of the Guarantor to such effect. (g) LEGAL OPINIONS. The Administrative Agent shall have received, with a counterpart for each Bank, (i) the executed legal opinion of Blake, Cassels & Graydon LLP, counsel to the Company, substantially in the form of Exhibit A-1, (ii) the executed legal opinion of the general counsel of the Guarantor, substantially in the form of Exhibit A-2, and (iii) the executed legal opinion of Stikeman Elliott, counsel to the Administrative Agent, substantially in the form of Exhibit A-3. (h) CERTIFICATES. The Administrative Agent shall have received, with a counterpart for each Bank, an officer's certificate of the chief financial officer, treasurer or controller of each of the Company and the Guarantor, substantially in the form of Exhibit C-1, and a certificate of incumbency of each of the Company and the Guarantor, substantially in the form of Exhibit D. (i) EXISTING CREDIT AGREEMENT. The Administrative Agent shall have received evidence satisfactory to it that the Existing Credit Agreement has been terminated and all amounts, if any, owing by the borrowers thereunder have been paid in full. (j) TRANSFER INSTRUCTIONS. The Administrative Agent shall have received written money transfer instructions addressed to the Administrative Agent and signed by a duly authorized officer, together with such other related money transfer authorizations as the Administrative Agent may have reasonably requested. SECTION 5.2 CONDITIONS TO EACH ACCOMMODATION. (1) The agreement of each Bank to make any Accommodation requested to be made by it on any date (including, without limitation, its initial Accommodation) is subject to the satisfaction of the following conditions precedent: (a) REPRESENTATIONS AND WARRANTIES. Each of the representations and warranties made by the Company in Section 4.1 of this Agreement shall be true and correct in all material respects on and as of such date as if made on and as of such date except (i) to the extent such representations and warranties expressly relate to an earlier date, and (ii) for changes in the Schedules hereto reflecting transactions -29- permitted by this Agreement. Each of the representations and warranties made by the Guarantor in the Guaranty shall be true and correct in all material respects on and as of such date as if made on and as of such date except to the extent such representations and warranties expressly relate to an earlier date. (b) NO DEFAULT. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the Accommodations requested to be made on such date. (c) BORROWING NOTICE; DRAWING NOTICE. The Administrative Agent shall have received a Notice of Borrowing or Drawing Notice, as the case may be, from the Company. (2) Each request by the Company for the making of an Accommodation hereunder shall constitute a representation and warranty by the Company as of the date of making such Accommodation that the conditions contained in this Section 5.2 have been satisfied. ARTICLE 6 AFFIRMATIVE COVENANTS The Company hereby agrees that, so long any Commitment shall remain in effect or any amount owing hereunder shall be unpaid, the Company shall: SECTION 6.1 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of the Company, or except to the extent that the failure to pay, discharge or otherwise satisfy the same could not, in the aggregate, reasonably be expected to result in a violation of the Net Worth Covenant. SECTION 6.2 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Preserve, renew and keep in full force and effect its corporate existence and take all reasonable action to maintain all rights, privileges and franchises material to the normal conduct of its significant businesses, provided, however, that notwithstanding this Section 6.2, the Company may (i) discontinue any of its businesses that are no longer deemed advantageous to it (such determination to be in the sole and absolute discretion of the Company), (ii) sell or dispose of any assets, subsidiaries or the capital stock thereof and (iii) consolidate with any other -30- corporation or accept a merger of any other corporation into the Company, provided that the surviving corporation of the merger shall be an entity organized under the laws of Canada or any province thereof and shall expressly assume the obligations of the Company under this Agreement and expressly agree to be bound by all other provisions applicable to the Company under this Agreement. The Company shall comply in all material respects with all Requirements of Law, except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to result in a violation of the Net Worth Covenant. SECTION 6.3 NOTICES. (1) Promptly give notice to the Administrative Agent of: (a) the occurrence of any Default or Event of Default; (b) any litigation, investigation or proceeding affecting the Company which could reasonably be expected to result in a violation of the Net Worth Covenant; (c) as soon as possible and in any event within 30 days after receipt by the Company, a copy of (i) any notice or claim to the effect that the Company or any Subsidiary is or may be liable to any Person as a result of the release by the Company, any of its Subsidiaries, or any other Person of any toxic or hazardous waste or substance into the environment, and (ii) any notice alleging any violation of any federal, provincial or local environmental, health or safety law or regulation by the Company or any Subsidiary, which could reasonably be expected to result in a claim, liability or loss that will, in the case of clauses (i) or (ii), when aggregated with the effect of any failure by the Company to (x) maintain and preserve all property material to the conduct of its business, (y) keep such property in good repair, working order and condition and (z) from time to time make, or cause to be made, all needful and proper repairs, renewals, additions, improvements and replacements thereto, result in a violation of the Net Worth Covenant; and (d) a consolidation or merger of any corporation into the Company or the transfer or assignment by the Company of any of its rights or obligations under this Agreement to any Person. (2) Each notice pursuant to this Section 6.3 shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the Company proposes to take with respect thereto. -31- SECTION 6.4 STATUS OF OBLIGATIONS. Ensure that its obligations under this Agreement shall at all times be direct and general obligations of the Company and shall at all times rank at least pari passu in all respects with all other outstanding unsecured and unsubordinated indebtedness of the Company. SECTION 6.5 PAYMENT OF TAXES. Pay and discharge promptly when due all taxes, assessments and governmental charges or levies the amounts of which are material to the business, assets, operations, prospects or condition, financial or otherwise, of the Company and the Subsidiaries taken as a whole, imposed upon it or upon its income or profits or in respect of its property, before the same shall become delinquent or in default; provided, however, that such payment and discharge shall not be required with respect to any such tax, assessment, charge, or levy so long as the validity or amount thereof shall be contested in good faith by appropriate actions or proceedings and the Company shall have set aside on its books appropriate reserves with respect thereto. SECTION 6.6 USE OF PROCEEDS. Use, and cause each Subsidiary to use, the proceeds of Accommodations for general corporate purposes, including commercial paper back-up. ARTICLE 7 NEGATIVE COVENANTS The Company hereby agrees that, so long as any Commitment shall remain in effect or any amount owing hereunder shall be unpaid, the Company shall not: SECTION 7.1 NEGATIVE PLEDGE. (1) (i) Create, incur or suffer to exist any Lien upon any of its property or assets to secure indebtedness for money borrowed, incurred, issued, assumed or guaranteed by the Company or (ii) create any Lien upon any of its property or assets to secure any indebtedness or other obligations of any Person if such Lien is a Lien created by any action of the Company (including any grant by the Company of any Lien pursuant to a written instrument or by the pledge by the Company of property, but excluding Liens arising by operation of law), without, in the case of any Lien described in the foregoing clauses (i) and (ii), thereby expressly securing the due and punctual payment of the principal of and interest on the Accommodations Outstanding and all other amounts payable by the Company hereunder equally and ratably with any and all other obligations and indebtedness secured by such Lien, so long as -32- any such other obligations and indebtedness shall be so secured; provided, however, that this restriction shall not prohibit or otherwise restrict: (a) the Company from creating, incurring or suffering to exist upon any of its property or assets any Lien in favor of any subsidiary of the Company; (b) the Company (i) from creating, incurring or suffering to exist a purchase money Lien upon any such property, assets, capital stock or indebtedness acquired by the Company prior to, at the time of, or within one year after (A) in the case of physical property or assets, the later of the acquisition, completion of construction (including any improvements on existing property) or commencement of commercial operation of such property or (B) in the case of shares of capital stock, indebtedness or other property or assets, the acquisition of such shares of capital stock, indebtedness, property or assets, (ii) from acquiring property or assets subject to Liens existing thereon at the date of acquisition thereof, whether or not the indebtedness secured by any such Lien is assumed or guaranteed by the Company, or (iii) from creating, incurring or suffering to exist Liens upon any property of any Person, which Liens exist at the time any such Person is merged with or into or consolidated with the Company (or becomes a subsidiary of the Company) or which Liens exist at the time of a sale or transfer of the properties of any such Person as an entirety or substantially as an entirety to the Company; (c) the Company from creating, incurring or suffering to exist upon any of its property or assets Liens in favor of Canada or any province thereof, or any agency, department or other instrumentality thereof, to secure progress, advance or other payments pursuant to any contract or provision of any statute (including maintaining self-insurance or participating in any fund in connection with worker's compensation, disability benefits, unemployment insurance, old age pensions or other types of social benefits, or joining in any other provisions or benefits available to companies participating in any such arrangements); (d) the Company from creating, incurring or suffering to exist upon any of its property or assets Liens securing the performance of letters of credit, bids, tenders, sales contracts, purchase agreements, repurchase agreements, reverse repurchase agreements, bankers' acceptances (other than Bankers' Acceptances), leases, surety and performance bonds, and other similar obligations incurred in the ordinary course of business; -33- (e) the Company from creating, incurring or suffering to exist Liens upon any real property acquired or constructed by the Company primarily for use in the conduct of its business; (f) the Company from entering into any arrangement with any Person providing for the leasing by the Company of any property or assets, which property or assets have been or will be sold or transferred by the Company to such Person with the intention that such property or assets will be leased back to the Company, if the obligations in respect of such lease would not be included as liabilities on a consolidated balance sheet of the Company; (g) the Company from creating, incurring or suffering to exist upon any of its property or assets Liens to secure non-recourse debt in connection with the Company engaging in any leveraged or single-investor or other lease transactions, whether (in the case of Liens on or relating to leases or groups of leases or the particular properties subject thereto) such Liens are on the particular properties subject to any leases involved in any of such transactions and/or the rental or other payments or rights under such leases or, in the case of any group of related or unrelated leases, on the properties subject to the leases comprising such group and/or on the rental or other payments or rights under such leases, or on any direct or indirect interest therein, and whether (in any case) (i) such Liens are created prior to, at the time of, or at any time after the entering into of such lease transactions and/or (ii) such leases are in existence prior to, or are entered into by the Company at the time of or at any time after, the purchase or other acquisition by the Company of the properties subject to such leases; (h) the Company from creating, incurring or suffering to exist (i) other consensual Liens in the ordinary course of business of the Company that secure indebtedness that, in accordance with generally accepted accounting principles, would not be included in total liabilities as shown on the Company's consolidated balance sheet, or (ii) Liens created by the Company in connection with any transaction intended by the Company to be a sale of property or assets of the Company, provided that such Liens upon any or all of the property or assets intended to be sold, the income from such property or assets and/or the proceeds of such property or assets; (i) the Company from creating, incurring or suffering to exist Liens on property or assets financed through tax-exempt municipal obligations, provided that such Liens are only on the property or assets so financed; -34- (j) any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any of the foregoing; provided, however, that any such extension, renewal or replacement shall be limited to all or a part of the property or assets (or substitutions therefor) which secured the Lien so extended, renewed or replaced (plus improvements on such property); and (k) the Company from creating, incurring or suffering to exist any other Lien not otherwise permitted by any of the foregoing clauses (i) through (ix) above if the aggregate amount of all secured debt of the Company secured by such Liens would not exceed 5% of the excess of the Guarantor's consolidated assets over the consolidated liabilities as shown on the Guarantor's most recent audited consolidated financial statements in accordance with generally accepted accounting principles. (2) For the purposes of this Section 7.1, any contract by which title is retained as security (whether by lease, purchase, title retention agreement or otherwise) for the payment of a purchase price shall be deemed to be a purchase money Lien. Nothing in this Section 7.1 shall apply to any Lien of any kind upon any of the properties of any character of the Company existing on the date of execution and delivery of this Agreement. (3) Nothing contained in this Section 7.1, or elsewhere in this Agreement shall prevent or be deemed to prohibit the creation, assumption or guaranty by the Company of any indebtedness not secured by a Lien or the issuance by the Company of any debentures, notes or other evidences of indebtedness not secured by a Lien, whether in the ordinary course of business or otherwise. SECTION 7.2 ASSIGNMENT Assign or transfer any of its rights or obligations under this Agreement to any Person unless (i) such Person is a corporation or other entity organized under the laws of Canada or any province thereof which expressly assumes the obligations of the Company in respect of the due and punctual performance and observance of all of the covenants and conditions of this Agreement to be performed or observed by the Company by one or more agreements, reasonably satisfactory in form to the Administrative Agent executed and delivered by such Person in favour of the Administrative Agent, (ii) the Administrative Agent shall have received a guarantee of the obligations of such Person in the form of the Guaranty MUTATIS MUTANDIS, and (iii) the Administrative Agent shall have received such certificates of corporate officers of such Person and such opinions of legal counsel to such Person, the Guarantor and the Administrative Agent in form satisfactory to the Administrative Agent in respect of such assignment and assumption. Upon completion of such -35- assignment and assumption, the assignor shall automatically and without further action on the part of any party be released from its obligations as a borrower hereunder and shall no longer be a party hereto. ARTICLE 8 EVENTS OF DEFAULT SECTION 8.1 EVENTS OF DEFAULT If any of the following events shall occur and be continuing: (a) The Company shall (i) fail to pay any amount of the Accommodations Outstanding when due in accordance with the terms hereof; (ii) fail to pay any interest, any Utilization Fee or any Facility Fee within five Business Days after any such interest or fee becomes due in accordance with the terms hereof; or (iii) fail to pay any expenses or other amounts payable under this Agreement to the Administrative Agent or any Bank within fifteen days after such expenses or other amounts become due in accordance with the terms hereof; or (b) Any representation or warranty made or deemed made by the Company herein or which is contained in any certificate, document or financial or other statement furnished at any time under or in connection with this Agreement shall prove to have been incorrect in any material respect on or as of the date made or deemed made; or (c) Any representation or warranty made or deemed made by the Guarantor in the Guaranty shall prove to have been incorrect in any material respect on or as of the date made; or (d) The Company shall default in the observance or performance of any agreement contained in Article 7; or (e) The Guarantor shall default in the observance or performance of any agreement contained in Sections 6.1 through 6.3 of the CIT U.S. Credit Agreement which are incorporated by reference in the Guaranty pursuant to Section 6 of the Guaranty; or (f) The Company shall default in the observance or performance of any other agreement contained in this Agreement (other than as provided in paragraphs (a), (b) and (d) of this Section), and such default shall continue unremedied for a period of 30 days after notice shall have been given to the Company by the Administrative Agent; or -36- (g) The Guarantor shall default in the observance or performance of any other agreement contained in the Guaranty (other than as provided in paragraphs (c) and (e) of this Section), and such default shall continue unremedied for a period of 30 days after notice shall have been given to the Guarantor by the Administrative Agent; or (h) Any event or condition shall occur which results in the acceleration of the maturity of any Indebtedness of the Guarantor in an aggregate principal amount equal to or greater than U.S. $100,000,000; or the Guarantor shall not make any liquidation or termination payment or payments in an aggregate amount equal to or greater than U.S. $100,000,000 when it becomes due (any applicable grace period having expired) under one or more Hedging Agreements; the Guarantor shall not pay the principal of or interest on any Indebtedness with respect to Indebtedness in an aggregate principal amount in excess of U.S. $100,000,000 when it becomes due and beyond any period of grace with respect thereto; or (i) (i) The Company or the Guarantor shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets, or the Company or the Guarantor shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against the Company or the Guarantor any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against the Company or the Guarantor any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; (iv) the Company or the Guarantor shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; -37- or (v) the Company or the Guarantor shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or (j) One or more judgments or decrees shall be entered against the Company or the Guarantor involving in the aggregate a liability (not paid or fully covered by insurance) of U.S. $100,000,000 or more and such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 90 days from the entry thereof; or (k) If at any time the Company shall become liable for remediation and/or environmental compliance expenses and/or fines, penalties or other charges which, in the aggregate, could reasonably be expected to result in a violation of the Net Worth Covenant; or (l) The Guaranty shall cease, for any reason (other than the express written release thereof by the Banks), to be in full force and effect, or the Guarantor shall so assert in writing. then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (i) above with respect to the Company, automatically the Commitments shall immediately terminate and the Accommodations Outstanding (with accrued interest thereon) and all other amounts owing under this Agreement shall immediately become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken: (i) with the consent of the Required Banks, the Administrative Agent may, or upon the request of the Required Banks the Administrative Agent shall, by notice to the Company declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate; and (ii) with the consent of the Required Banks, the Administrative Agent may, or upon the request of the Required Banks the Administrative Agent shall, by notice of default to the Company, declare the Accommodations Outstanding (with accrued interest thereon) and all other amounts owing under this Agreement to be due and payable forthwith, whereupon the same shall immediately become due and payable. Except as expressly provided above in this Section, presentment, demand, protest and all other notices of any kind are hereby expressly waived. -38- ARTICLE 9 THE AGENTS SECTION 9.1 APPOINTMENT. Each Bank hereby designates and appoints RBC as the Administrative Agent of such Bank under this Agreement, and each such Bank authorizes RBC as the Administrative Agent to take such action on its behalf under the provisions of this Agreement and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Bank, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or otherwise exist against the Administrative Agent. The Syndication Agents, in their capacities as such, shall not have any duties or responsibilities hereunder nor any fiduciary relationship with any Bank, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or otherwise exist against the Syndication Agents in their capacities as such. SECTION 9.2 DELEGATION OF DUTIES. The Administrative Agent may execute any of its duties under this Agreement by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. SECTION 9.3 EXCULPATORY PROVISIONS. Neither the Administrative Agent nor any of its officers, directors, employees, 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 this Agreement (except for its or such Person's own gross negligence or wilful misconduct) or (ii) responsible in any manner to any of the Banks for any recitals, statements, representations or warranties made by the Company or any officer thereof contained in this Agreement or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or for any failure of the Company to perform its obligations hereunder or thereunder. The Administrative Agent shall not be under any obligation to any Bank to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement, or to inspect the properties, books or records of the Company. -39- SECTION 9.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Company), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent may deem and treat the payee of the Bank specified in the accounts and records maintained by the Administrative Agent with respect to any amount owing hereunder as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement unless it shall first receive such advice or concurrence of the Required Banks as it deems appropriate and it shall first be indemnified to its satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement in accordance with a request of the Required Banks, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Banks and all future holders of the obligations owing by the Company hereunder. SECTION 9.5 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Administrative Agent has received notice from a Bank or the Company referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "NOTICE OF DEFAULT". In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give notice thereof to the Banks. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Banks; provided that unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Banks. SECTION 9.6 NON-RELIANCE ON ADMINISTRATIVE AGENT. Each Bank expressly acknowledges that neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by the Administrative Agent hereinafter taken, including any review of the affairs of the Company, shall be deemed to constitute any representation or warranty by the Administrative Agent to -40- any Bank. Each Bank represents to the Administrative Agent that it has, independently and without reliance upon the Administrative 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, operations, property, financial and other condition and creditworthiness of the Company and made its own decision to make its Accommodations hereunder and enter into this Agreement. Each Bank also represents that it will, independently and without reliance upon the Administrative 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, appraisals and decisions in taking or not taking action under this Agreement, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Company. Except for notices, reports and other documents expressly required to be furnished to the Banks by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Bank with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of the Company which may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates. SECTION 9.7 INDEMNIFICATION. The Banks agree to indemnify the Administrative Agent in its capacity as such (to the extent not reimbursed by the Company and without limiting the obligation of the Company to do so), ratably according to their respective Commitment Percentages in effect on the date on which indemnification is sought under this Section (or, if indemnification is sought after the date upon which the Commitment shall have terminated and the Accommodations Outstanding shall have been paid in full, ratably in accordance with their Commitment Percentages immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Accommodations Outstanding and all other amounts owing hereunder) be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of this Agreement or any documents contemplated by or referred to herein or the transactions contemplated hereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided that no Bank shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent's gross negligence or willful misconduct. The agreements in this Section shall survive the payment of the Accommodations Outstanding and all other amounts payable hereunder. -41- SECTION 9.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The Administrative Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Company as though the Administrative Agent were not the Administrative Agent hereunder. With respect to its Accommodations made or renewed by it, the Administrative Agent shall have the same rights and powers under this Agreement as any Bank and may exercise the same as though it were not the Administrative Agent, and the terms "BANK" and "BANKS" shall include the Administrative Agent in its individual capacity. SECTION 9.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may resign as Administrative Agent upon thirty days' notice to the Banks, and may be removed at any time with or without cause by the Required Banks. Upon any resignation or removal of the Administrative Agent, the Required Banks shall appoint from among the Banks a successor Administrative Agent for the Banks, which successor Administrative Agent shall be approved by the Company. If no successor Administrative Agent shall have been so approved by the Company and shall have accepted such appointment within thirty days after the resignation of the Administrative Agent, then in place or the Required Banks' removal of the retiring Administrative Agent, such retiring Administrative Agent may, on behalf of the Banks, appoint a successor Administrative Agent (which shall be a commercial bank or trust company organized or licensed under the laws of Canada or any province thereof) which appointment shall be subject to the approval of the Company such approval not to be unreasonably withheld. Upon the acceptance of any appointment as Administrative Agent hereunder, such successor Administrative Agent shall succeed to the rights, powers and duties of the Administrative Agent and the term "ADMINISTRATIVE AGENT" shall mean such successor agent effective upon its appointment, and the former Administrative Agent's rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement or any holders of the obligations owing hereunder. After any retiring Administrative Agent's resignation or removal as Administrative Agent, the provisions of this Section shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement. ARTICLE 10 MISCELLANEOUS SECTION 10.1 AMENDMENTS AND WAIVERS. Neither this Agreement, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this Section. -42- With the written consent of the Required Banks, the Administrative Agent and the Company may, from time to time, enter into written amendments, supplements or modifications hereto for the purpose of adding any provisions to this Agreement or changing in any manner the rights of the Banks or of the Company hereunder or thereunder or waiving, on such terms and conditions as the Administrative Agent may specify in such instrument, any of the requirements of this Agreement or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall (i) reduce the amount or extend the maturity of any Accommodation or any installment thereof, or reduce the rate of interest (other than default interest rates) thereon or extend the time of payment of interest or fees thereon, or reduce any fee payable to any Bank hereunder, or change the amount of any Bank's Commitment, in each case without the written consent of the Bank affected thereby, or (ii) amend, modify or waive any provision of Section 2.6, or this Section, amend the definition of Required Banks, change the types of Accommodations available or consent to the assignment or transfer by the Company of any of its rights and obligations under this Agreement in each case without the written consent of all the Banks, (iii) amend, modify or waive any provision of Article 9 or any reference to the Administrative Agent or the Syndication Agents in any other provision of this Agreement which alters the duties or obligations of the Administrative Agent or the Syndication Agents without the written consent of the then Administrative Agent or the Syndication Agents, as the case may be. Nothing in this Section 10.1 shall prevent or prohibit the Administrative Agent, the Company or any Bank from taking any action in accordance with Section 2.6, Section 2.16, Section 2.18 or Section 2.19 notwithstanding anything contained in this Section 10.1 to the contrary, including, without limitation (i) preventing a Non-Extending Bank from transferring its rights and obligations hereunder to a Continuing Bank, (ii) preventing a Notifying Bank from transferring its rights and obligations to a Replacement Bank, or (iii) the modification, amendment or supplement of this Agreement (including, without limitation, Schedule I), in each case solely in accordance with, or upon a transfer by a Bank of its rights and obligations hereunder pursuant to, the applicable provisions of Section 2.6, Section 2.16, Section 2.18, or Section 2.19. Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Banks and shall be binding upon the Company, the Banks, the Agents and all future holders of the obligations owing hereunder. In the case of any waiver, the Company, the Banks and the Agents shall be restored to their former position and rights hereunder, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. SECTION 10.2 NOTICES. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy, telegraph or telex), and, -43- unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered by hand, or three days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when received, or, in the case of telegraphic notice, when delivered to the telegraph company, or, in the case of telex notice, when sent, answer back received, addressed, in the case of the Company and the Administrative Agent, as follows, and as set forth on Schedule I in the case of the other parties hereto, or to such other address as may be hereafter notified by the respective parties hereto and any future holders of the obligations owing hereunder: (a) The Administrative Agent: Royal Bank of Canada 12th Floor South Tower, Royal Bank Plaza 200 Bay Street Toronto, Ontario M5J 2J5 Attention: Manager Agency Telecopy: (416) 974-2407 (b) The Company: CIT Financial Ltd. c/o The CIT Group, Inc. 650 CIT Drive Livingston, New Jersey U.S.A. 07039 Attention: Treasurer Telecopy: (973) 535-3761 SECTION 10.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Bank, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. SECTION 10.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and warranties made hereunder and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Accommodations hereunder. -44- SECTION 10.5 PAYMENT OF EXPENSES AND TAXES. The Company agrees (i) to pay or reimburse the Administrative Agent for all of its reasonable out-of-pocket costs and expenses incurred in connection with the preparation and execution of, and any amendment, supplement or modification to, this Agreement and any other documents prepared in connection herewith, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent, (ii) to pay or reimburse each Bank and the Agents for all its reasonable costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement and any such other documents, including, without limitation, reasonable fees and disbursements (including the allocated costs and expenses of in-house counsel) of counsel to the Administrative Agent and to the several Banks, (iii) to pay, indemnify, and hold each Bank and the Administrative Agent harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement and any such other documents, and (iv) to pay, indemnify, and hold each Bank and the Administrative Agent harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement, any Accommodation (including the use of proceeds thereof) and any such other documents (all the foregoing, collectively, the "INDEMNIFIED LIABILITIES"), provided, that the Company shall have no obligation hereunder to any Administrative Agent or any Bank with respect to indemnified liabilities arising from (A) the gross negligence or wilful misconduct of such Administrative Agent or such Bank, (B) legal proceedings commenced against any Administrative Agent or any Bank by any security holder or creditor thereof arising out of and based upon rights afforded any such security holder or creditor solely in its capacity as such, or (C) legal proceedings commenced against any Agent or any Bank by any other Bank or by any Transferee. The agreements in this Section shall survive repayment of the Accommodations Outstanding and all other amounts payable hereunder. SECTION 10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING BANKS. (1) This Agreement shall be binding upon and inure to the benefit of the Company, the Administrative Agent, the Banks, all future holders of the obligations owing hereunder and their respective successors and assigns. Notwithstanding any other provision contained herein, (i) no Bank shall have the right to assign all or any part of its rights or obligations to any Person who is a non-resident of Canada within the meaning of the INCOME TAX ACT (Canada), (ii) no Purchasing Bank shall be entitled to receive any greater -45- payment, on a cumulative basis, pursuant to Section 2.13 than the Bank which granted such assignment would have been entitled to, and (iii) any participation or assignment hereunder shall not increase the Company's cost of borrowing under Section 2.14 or otherwise impose any additional cost, expense or obligation on the Company, in each case, without the prior written consent of the Company. (2) Any Bank may, in the ordinary course of its commercial banking business and in accordance with applicable law, at any time sell to one or more banks or other entities ("PARTICIPANTS") participating interests in any Accommodation owing to such Bank, any Commitment of such Bank or any other interest of such Bank hereunder. In the event of any such sale by a Bank of participating interests to the Participant, such Bank's obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Bank shall remain solely responsible for the performance thereof, such Bank shall remain the holder of any obligation owing to it hereunder for all purposes under this Agreement, and the Company and the Administrative Agent shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement; provided, that such Bank shall retain the sole right to approve, without the consent of any Participant, any amendment, modification or waiver of any provision of the Agreement other than, as may be agreed to by such Bank and Participant, any amendment, modification or waiver with respect to any Accommodation or Commitment in which such Participant has an interest which forgives principal, interest or fees or reduces the interest rate or fees payable with respect to any such Accommodation or Commitment or postpones any date fixed for any regularly-scheduled payment of principal of, or interest or fees on, any such Accommodation or Commitment. The Company agrees that if amounts outstanding under this Agreement are due or unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of setoff in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Bank under this Agreement. The Company also agrees that each Participant shall be entitled to the benefits of Section 2.13, Section 2.14, Section 2.15 and Section 10.5 with respect to its participation in the Commitment and the Accommodation Outstanding from time to time; provided, that no Participant shall be entitled to receive any greater amount pursuant to such subsections than the transferor Bank would have been entitled to receive in respect of the amount of the participation transferred by the transferor Bank to such Participant had no such transfer occurred. -46- (3) Any Bank may, in the ordinary course of its commercial banking business and in accordance with applicable law, at any time sell to any Bank or any Affiliate thereof (which shall be resident of Canada) and, with the consent of the Company and the Administrative Agent (which shall not be unreasonably withheld), to one or more additional banks or financial institutions (which shall be resident of Canada) ("PURCHASING BANKS") all or any part of its rights and obligations under this Agreement pursuant to a Commitment Transfer Supplement, substantially in the form of Exhibit B (a "COMMITMENT TRANSFER SUPPLEMENT"), executed by such Purchasing Bank and such transferor Bank (and, in the case of a Purchasing Bank that is not then a Bank or an Affiliate thereof, by the Company and the Administrative Agent) and delivered to the Administrative Agent for its acceptance. The Company shall have no obligation to consent to a sale by a Bank to any Person that is not a bank or an Affiliate of a bank. Each such assignment shall be in a minimum amount of $10,000,000 (other than in the case of an assignment of all of a Bank's interests under this Agreement) and the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance, a Commitment Transfer Supplement, and the transferor Bank or the Purchasing Bank, as agreed between them, shall deliver to the Administrative Agent a processing and recordation fee of $3,500. Each such assignment shall be ratable as among any Commitment and/or Accommodations under this Agreement. After giving effect to any such assignment (other than an assignment of all of a Bank's interests under this Agreement), the assigning Bank (together with any Bank which is an Affiliate of such assigning Bank) shall retain Accommodations and/or Commitments aggregating not less than $10,000,000. Upon such execution, delivery, acceptance and recording, from and after the transfer effective date determined pursuant to such Commitment Transfer Supplement (the "TRANSFER EFFECTIVE DATE"), (x) the Purchasing Bank thereunder shall be a party hereto and, to the extent provided in such Commitment Transfer Supplement, have the rights and obligations of a Bank hereunder with a Commitment as set forth therein, and (y) the transferor Bank thereunder shall, to the extent provided in such Commitment Transfer Supplement, be released from its obligations under this Agreement (and, in the case of a Commitment Transfer 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 hereto). Such Commitment Transfer Supplement shall be deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect the addition of such Purchasing Bank and the resulting adjustment of Commitment Percentages arising from the purchase by such Purchasing Bank of all or a portion of the rights and obligations of such transferor Bank under this Agreement. Notwithstanding any provision of this Section 10.6, the consent of the Company shall not be required for any assignment which -47- occurs at any time when any of the events described in Section 8.1(i) shall have occurred and be continuing. (4) The Administrative Agent shall maintain at its address referred to in Section 10.2 a copy of each Commitment Transfer Supplement delivered to it. (5) Upon its receipt of a Commitment Transfer Supplement executed by a transferor Bank and Purchasing Bank (and, in the case of a Purchasing Bank that is not then a Bank or an Affiliate thereof, by the Company and the Administrative Agent), the Administrative Agent shall (i) promptly accept such Commitment Transfer Supplement, and (ii) on the Transfer Effective Date determined pursuant thereto give notice of such acceptance to the Banks and the Company. SECTION 10.7 DISSEMINATION OF INFORMATION; CONFIDENTIALITY. (1) The Company authorizes each Bank to disclose to any Participant or Purchasing Bank or any other Person acquiring an interest in this Agreement by operation of law (each a "TRANSFEREE") and any prospective Transferee any and all information in such Bank's possession concerning the creditworthiness of the Company and its Subsidiaries, provided that such Transferee or prospective Transferee agrees to be bound by this Section 10.7 with respect to such information as though such Transferee or prospective Transferee were a Bank hereunder. (2) Each Bank and each Transferee that receives information which is not publicly available and which has been identified by the Company as confidential ("PROPRIETARY INFORMATION") will be bound to treat such Proprietary Information in a confidential manner and to use such Proprietary Information only for the purpose of evaluating and monitoring the creditworthiness of the Company and its Subsidiaries in connection with such Bank's or such Transferee's extensions of credit pursuant to this Agreement or such Bank's or Transferee's other agreements with the Company, or as otherwise may be required by law, regulation or court order; provided, that if any Bank or Transferee shall be required to disclose any Proprietary Information by a court order (i) such Bank or Transferee shall, unless prohibited by applicable law, applicable regulation or the terms of the applicable court order, communicate such fact to the Administrative Agent and the Administrative Agent shall communicate such fact to the Company, and (ii) such Bank or Transferee shall disclose only such Proprietary Information which it is requested to disclose or advised by counsel to disclose; provided, further, that any Bank or Transferee may disclose such information which it is requested to disclose or is advised by counsel to disclose to an auditor or examiner if it has advised such auditor or examiner -48- that such information is confidential; provided, further, that any Bank or Transferee may disclose Proprietary Information (A) to Affiliates of such Bank or Transferee provided that such Affiliates agree to keep the Proprietary Information confidential as set forth herein, (B) with the written consent of the Company, (C) in connection with any litigation involving the Company and such Bank or Transferee, (D) to legal counsel to such Bank or Transferee if it advises such legal counsel that such information is confidential, (E) if such Proprietary Information was in the possession of such Bank or Transferee on a non-confidential basis prior to the Company furnishing it to such Bank or Transferee as shown by clear and convincing evidence, or (F) if such Proprietary Information is received by such Bank or Transferee, without restriction as to its disclosure or use, from a Person who, to such Bank's or Transferee's knowledge or reasonable belief, was not prohibited from disclosing it by any duty of confidentiality. SECTION 10.8 ADJUSTMENTS. (1) If any Bank (a "BENEFITTED BANK") shall at any time receive any payment of all or part of its Accommodations Outstanding, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 8.1(i), or otherwise), in a greater proportion than any such payment to or collateral received by any other Bank, if any, in respect of such other Bank's Accommodations Outstanding, or interest thereon, such benefitted Bank shall purchase for cash from the other Banks such portion of each such other Bank's Accommodations Outstanding, or shall provide such other Banks with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such benefitted Bank to share the excess payment or benefits of such collateral or proceeds ratably with each of the Banks; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such benefitted Bank, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest. Notwithstanding anything contained in this Agreement to the contrary, this Section 10.8 shall only be applicable to (i) payments received by a Bank in respect of the obligations of the Company under this Agreement, and (ii) collateral received from the Company, if any, to secure obligations of the Company under this Agreement. (2) In addition to any rights and remedies of the Banks provided by law, upon (i) the occurrence and during the continuance of an Event of Default, and (ii) the declaration by the Administrative Agent that the Accommodations Outstanding are immediately due and payable pursuant to the last paragraph of Section 8.1, or the occurrence and continuance of an Event of Default specified in clause (i) or (ii) of Section 8.1(i), each Bank shall have the right, -49- without prior notice to the Company, any such notice being expressly waived by the Company to the extent permitted by applicable law (but without waiving any notices specified in Section 8.1), upon any amount becoming due and payable by the Company hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether matured or unmatured, at any time held or owing by such Bank or any branch or agency thereof to or for the credit or the account of the Company. Each Bank agrees promptly to notify the Company and the Administrative Agent after any such set-off and application made by such Bank, provided that the failure to give such notice shall not affect the validity of such set-off and application. SECTION 10.9 COUNTERPARTS. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with the Company and the Administrative Agent. SECTION 10.10 SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. SECTION 10.11 INTEGRATION. This Agreement represents the agreement of the Company, the Agents and the Banks with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Company, the Agents or any Bank relative to subject matter hereof not expressly set forth or referred to herein other than any agreements referred to in Section 2.4(2). SECTION 10.12 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN. -50- SECTION 10.13 SUBMISSION TO JURISDICTION; WAIVERS. The Company hereby irrevocably and unconditionally: (a) submits for itself and its property in any legal action or proceeding relating to this Agreement, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the province of Ontario and appellate courts from any thereof; (b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Company at its address set forth in Section 10.2 or at such other address of which the Bank shall have been notified pursuant thereto; and (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction. SECTION 10.14 WAIVERS OF JURY TRIAL. THE COMPANY, THE AGENTS AND THE BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN. IN WITNESS WHEREOF, the parties have executed this Agreement CIT FINANCIAL LTD. By: --------------------------------- Name: Title: -51- ROYAL BANK OF CANADA, as Administrative Agent By: --------------------------------- Name: Gail Watkin Title: Manager, Global Banking, Agency ROYAL BANK OF CANADA, as a Bank By: --------------------------------- Name: Terence E.J. Leifso Title: Vice President CANADIAN IMPERIAL BANK OF COMMERCE, as Syndication Agent and as a Bank By: --------------------------------- Name: Title: By: --------------------------------- Name: Title: THE CHASE MANHATTAN BANK OF CANADA, as Syndication Agent By: --------------------------------- Name: Title: By: --------------------------------- Name: Title: -52- THE CHASE MANHATTAN BANK, TORONTO BRANCH as a Bank By: --------------------------------- Name: Title: By: --------------------------------- Name: Title: -53- BANK OF MONTREAL, as Managing Agent and as a Bank By: --------------------------------- Name: B. Ciallella Title: Director THE BANK OF NOVA SCOTIA, as Managing Agent and as a Bank By: --------------------------------- Name: Andrea L. Sabada Title: Director THE TORONTO-DOMINION BANK, as Managing Agent and as a Bank By: --------------------------------- Name: Paul Cunha Title: Relationship Manager By: --------------------------------- Name: Patrick Green Title: Manager, Commercial Credit BANK OF AMERICA CANADA, as a Bank By: --------------------------------- Name: Richard J. Hall Title: Vice President -54- BANK ONE CANADA, as a Bank By: --------------------------------- Name: M.N. Tam Title: Vice President BNP PARIBAS (CANADA), as a Bank By: --------------------------------- Name: Daniel Grenier Title: SVP and Treasurer By: --------------------------------- Name: Alain Ligault Title: SVP CITIBANK CANADA, as a Bank By: --------------------------------- Name: Victoria Patterson Title: Vice President -55- CREDIT SUISSE FIRST BOSTON CANADA, as a Bank By: --------------------------------- Name: Peter Chauvin Title: Vice President By: --------------------------------- Name: Alain Daoust Title: Director DEUTSCHE BANK CANADA, as a Bank By: --------------------------------- Name: Rod O'Hara Title: Director By: --------------------------------- Name: Maria Gorzen Title: Vice President MIZUHO BANK (CANADA), as a Bank By: --------------------------------- Name: John Gleason Title: Vice President SCHEDULE I TO THE 364-DAY CREDIT AGREEMENT COMMITMENTS AND BANK INFORMATION
======================================================= ======================= LENDER COMMITMENT - ------------------------------------------------------- ----------------------- Royal Bank of Canada $70,000,000 200 Bay St., 10th Floor South Tower Royal Bank Plaza Toronto, Ontario M5J 2J5 Attention: Terence E.J. Leifso Senior Manager Telephone: (416) 974-4895 Facsimile: (416) 974-7636 - ------------------------------------------------------- ----------------------- Canadian Imperial Bank of Commerce $64,000,000 BCE Place 161 Bay Street, 8th Floor Toronto, Ontario CANADA M5J 2S8 Attention: Karen Kiskorna Director Telephone: (416) 956-3077 Facsimile: (416) 956-3875 - ------------------------------------------------------- ----------------------- The Chase Manhattan Bank, Toronto Branch $64,000,000 1 First Canadian Place 100 King Street West Suite 6900, P.O. Box 106 Toronto, Ontario M5X 1A4 Attention: Christine Chan Telephone: (416) 216-4133 Facsimile: (416) 216-4161 ======================================================= =======================
-2-
======================================================= ======================= LENDER COMMITMENT - ------------------------------------------------------- ----------------------- Bank of Montreal $40,000,000 First Canadian Place 24th Floor Toronto, Ontario M5X 1A1 Attention: Cam Landry Vice President Telephone: (416) 867-7784 Facsimile: (416) 867-5818 - ------------------------------------------------------- ----------------------- The Bank of Nova Scotia $40,000,000 44 King Street West 16th Floor Toronto, Ontario M5H 1H1 Attention: Andrea Sabada Director Bank Finance Telephone: (416) 933-1438 Facsimile: (416) 933-7399 - ------------------------------------------------------- ----------------------- The Toronto-Dominion Bank $40,000,000 P.O. Box 1, Toronto-Dominion Tower 9th Floor Toronto, Ontario M5K 1A2 Attention: Matt Hendel Vice President Telephone: (416) 983-6076 Facsimile: (416) 307-1222 - ------------------------------------------------------- ----------------------- Bank of America Canada $26,000,000 200 Front Street West Suite 2700 Toronto, Ontario M5V 3L2 Attention: Medina Sales de Andrade Telephone: (416) 349-5433 Facsimile: (416) 349-4283 ======================================================= =======================
-3-
======================================================= ======================= LENDER COMMITMENT - ------------------------------------------------------- ----------------------- Bank One Canada $26,000,000 BCE Place 161 Bay Street Suite 4240 Toronto, Ontario M5J 2S1 Attention: Mr. Jeremiah Hynes Telephone: (416) 365-5260 Facsimile: (416) 363-7574 - ------------------------------------------------------- ----------------------- BNP Paribas (Canada) $26,000,000 121 King Street West P.O. Box 87, Suite 2130 Toronto, Ontario M5H 3T9 Attention: John Usborne Vice President Telephone: (416) 947-3502 Facsimile: (416) 947-3541 - ------------------------------------------------------- ----------------------- Citibank Canada $26,000,000 Citibank Place 123 Front Street West 10th Floor Toronto, Ontario M5J 2M3 Attention: Victoria Patterson Telephone: (416) 947-5885 Facsimile: (416) 947-5674 - ------------------------------------------------------- ----------------------- Credit Suisse First Boston Canada $26,000,000 1 First Canadian Place Suite 3000 P.O. Box 301 Toronto, Ontario M5X 1C9 Attention: Peter Chauvin Vice President Telephone: (416) 352-4529 Facsimile: (416) 352-4576 ======================================================= =======================
-4-
======================================================= ======================= LENDER COMMITMENT - ------------------------------------------------------- ----------------------- Deutsche Bank Canada $26,000,000 222 Bay Street Suite 1200 Toronto, Ontario M5K 1H6 Attention: Paul Jurist Director Telephone: (416) 682-8422 Facsimile: (416) 682-8444 - ------------------------------------------------------- ----------------------- Mizuho Bank (Canada) $26,000,000 100 Yonge Street P.O. Box 29, Suite 1102 Toronto, Ontario M5C 2W1 Attention: Mr. John Gleason Telephone: (416) 595-0669 Facsimile: (416) 595-1353 - ------------------------------------------------------- ----------------------- TOTAL: $500,000,000 ======================================================= =======================
EX-10.16 18 a2069484zex-10_16.txt EXHIBIT 10.16 EXHIBIT 10.16 THE CIT GROUP, INC. 650 CIT Drive Livingston, New Jersey 07039-5795 Dated as of June 1, 2001 Royal Bank of Canada, as Administrative Agent 200 Bay Street 12th Floor, South Tower Royal Bank Plaza Toronto, Ontario M5J 2J5 Re: UNCONDITIONAL GUARANTY Ladies and Gentlemen: Reference is hereby made to the $500,000,000 364-Day Credit Agreement dated as of March 27, 2001 (as amended or otherwise modified from time to time, the "CREDIT AGREEMENT"), by and among CIT Financial Ltd., the Banks party thereto as lenders, Royal Bank of Canada, as Administrative Agent and Canadian Imperial Bank of Commerce and The Chase Manhattan Bank of Canada, as Syndication Agents. Any capitalized term used herein and not defined herein shall have the meaning assigned to it in the Credit Agreement. 1. GUARANTY. The CIT Group, Inc., a Nevada corporation (the "GUARANTOR") hereby (a) unconditionally, absolutely and irrevocably guarantees to the Banks the full and prompt payment by the Company of the obligations incurred by the Company to the Banks pursuant to the Credit Agreement (including, without limitation, interest accruing at the then applicable rate provided in the Credit Agreement after the maturity of the Accommodations Outstanding and interest accruing at the then applicable rate provided in the Credit Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Company whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) (the "OBLIGATIONS") upon written demand therefor from the Administrative Agent, and (b) agrees to pay all out-of-pocket expenses incurred by the Administrative Agent and each Bank (including reasonable counsel fees and expenses) in enforcing its rights under this Guaranty. 2. GUARANTOR'S OBLIGATIONS UNCONDITIONAL. (a) The Guarantor hereby guarantees that the Obligations will be paid strictly in accordance with the terms of the -2- Credit Agreement, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Administrative Agent and each Bank with respect thereto. The liability of the Guarantor hereunder shall be absolute and unconditional irrespective of: (i) any lack of a validity or enforceability of any of the Obligations, or any agreement, instrument or other document evidencing or securing any of the Obligations; (ii) any change in the time, manner or place of, payment of, or in any other term in respect of, all or any of the Obligations, or any other amendment or waiver of, or consent to any departure from any agreement, instrument or document evidencing or securing the Obligations; or (iii) any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Company or any other guarantor in respect of the Obligations. (b) This Guaranty (i) is a continuing guarantee of payment and shall remain in full force and effect until the later of (x) the satisfaction in full of the Obligations and the payment of the other expenses to be paid by the Guarantor pursuant hereto, and (y) the termination of the Commitments; and (ii) shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by any Bank upon the insolvency, bankruptcy or reorganization of the Company or otherwise, all as though such payment had not been made. 3. WAIVERS. The Guarantor hereby waives: (a) promptness and diligence; (b) notice of acceptance and notice of the incurrence of any Obligation by the Company; (c) notice of any actions taken by the Administrative Agent or any Bank or the Company under the Credit Agreement or any other agreement or instrument relating thereto, except as expressly provided for in clause (a) of Section 1; (d) all other notices, demands and protests, and all other formalities of every kind in connection with the enforcement of the Obligations or of the obligations of the Guarantor hereunder, the omission of or delay in which, but for the provisions of this Section 3, might constitute grounds for relieving the Guarantor of its obligations hereunder, except as expressly provided for in clause (a) of Section 1; and (e) any requirement that the Administrative Agent or any Bank protect, secure, perfect or insure any security interest or lien or any property subject thereto or exhaust any right or take any action against the Company or any other person or entity or any collateral. 4. NO SUBROGATION. Notwithstanding any payment or payments made by the Guarantor hereunder, or any set-off or application of funds of the Guarantor by the Administrative Agent or any Bank, the Guarantor shall not be entitled to be subrogated to any of the rights of the Administrative Agent or any Bank against the Company or against any collateral security or guarantee or right of offset held by the Administrative Agent or any Bank for the payment of the Obligations, nor shall the Guarantor seek or be entitled to seek any contribution or reimbursement from the Company in respect of payments made by the Guarantor hereunder, until the Commitments are terminated and all amounts owing to the Administrative Agent and the Banks by the Company on account of the Obligations are paid in full. If any amount shall be paid to the Guarantor on account of such -3- subrogation rights at any time when all of the Obligations shall not have been paid in full, such amount shall be held by the Guarantor in trust for the Administrative Agent and the Banks, segregated from other funds of the Guarantor, and shall, forthwith upon receipt by the Guarantor, be turned over to the Administrative Agent in the exact form received by the Guarantor (duly indorsed by the Guarantor to the Administrative Agent, if required), to be applied against the Obligations, whether matured or unmatured. 5. REPRESENTATIONS AND WARRANTIES. To induce the Banks to enter into the Credit Agreement, the Guarantor hereby represents and warrants to the Administrative Agent and each Bank that: (a) FINANCIAL CONDITION. The consolidated balance sheet of the Guarantor and its consolidated Subsidiaries as of December 31, 2000, and the related consolidated statements of income and of cash flows for the fiscal years ended on such dates, reported on by KPMG Peat Marwick, copies of which have heretofore been furnished to each Bank, present fairly the consolidated financial condition of the Guarantor and its consolidated Subsidiaries as at such dates, and the consolidated results of their operations and their consolidated cash flows for the fiscal year then ended. All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by such accountants or Responsible Officer and as disclosed therein). (b) NO CHANGE. Since December 31, 2000 and until the date of this Guaranty there has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect. (c) CORPORATE EXISTENCE; COMPLIANCE WITH LAW; SIGNIFICANT SUBSIDIARIES. Each of the Guarantor and its Significant Subsidiaries (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and (ii) has the power and authority to conduct the business in which it is currently engaged. As of the date hereof, each Significant Subsidiary is listed on Schedule II to the CIT U.S. Credit Agreement. (d) CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The Guarantor has the corporate power and authority to make, deliver and perform this Guaranty and has taken all necessary corporate action to authorize the execution, delivery and performance of this Guaranty. No consent or authorization of, filing with or other act by or in respect of, any Governmental Authority or any other Person is required on the part of the Guarantor in connection with the execution, delivery, performance, validity or enforceability of this Guaranty. This Guaranty has been duly executed and delivered on behalf of the Guarantor. This Guaranty constitutes a legal, valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by -4- general equitable principles (whether enforcement is sought by proceedings in equity or at law). (e) NO LEGAL BAR. The execution, delivery and performance of this Guaranty will not violate any Requirement of Law or material Contractual Obligation of the Guarantor or of any of its Significant Subsidiaries and will not result in, or require, the creation or imposition of any Lien on any of its or their material respective properties or revenues pursuant to any such Requirement of Law or material Contractual Obligation. (f) NO MATERIAL LITIGATION. (i) No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Guarantor, threatened by or against the Guarantor or any of its Significant Subsidiaries or against any of its or their respective properties or revenues in any case that involves this Guaranty or the execution, delivery and performance of this Guaranty. (ii) No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Guarantor, threatened by or against the Guarantor or any of its Significant Subsidiaries or against any of its or their respective properties or revenues which could reasonably be expected to result in a violation of subsection 6.3 of the CIT U.S. Credit Agreement, as incorporated herein by reference pursuant to Section 6 below. (g) NO DEFAULT. (i) Neither the Guarantor nor any of its Significant Subsidiaries is in default under or with respect to any of its Contractual Obligations in any respect which could reasonably be expected to result in a violation of subsection 6.3 of the CIT U.S. Credit Agreement, as incorporated herein by reference pursuant to Section 6 below. (ii) No Default or Event of Default (as such terms are defined in the CIT U.S. Credit Agreement) has occurred and is continuing. (h) AGGREGATION OF THE REPRESENTATIONS AND WARRANTIES RELATING TO NET WORTH. The total effect of each event or circumstance referred to in paragraph (f)(ii) and paragraph (g)(i) of this Section 5 is not, when taken together in the aggregate, reasonably expected to result in a violation of subsection 6.3 of the CIT U.S. Credit Agreement, as incorporated herein by reference pursuant to Section 6 below. (i) INVESTMENT COMPANY ACT. The Guarantor is not an "investment company", within the meaning of the Investment Company Act of 1940, as amended. (j) ERISA. Each Plan complies in all material respects with all applicable provisions of ERISA and the Code, no Reportable Event has occurred with respect to any Plan, neither the Company nor any other members of any Commonly Controlled Entity has withdrawn from any Plan or initiated steps to do so, and no steps have been taken to terminate any Plan, except in any case to the extent that such failures could not, in the -5- aggregate, reasonably be expected to result in a violation of subsection 6.3 of the CIT U.S. Credit Agreement, as incorporated herein by reference pursuant to Section 6 below. As used in this Section 5, capitalized terms that are not defined in this Guaranty are used with the meanings ascribed to such terms in the CIT U.S. Credit Agreement. 6. COVENANTS. The Guarantor agrees that, so long as any Bank has any Commitment under the Credit Agreement or any amount payable under the Credit Agreement, unless the Required Banks shall otherwise consent in writing, the Guarantor will comply with each of the covenants contained in Sections 5.1 through 5.8 and 6.1 through 6.3 of the CIT U.S. Credit Agreement (as in effect on the date hereof, without regard to any amendment, modification or waiver of such provisions and without regard to whether or not the CIT U.S. Credit Agreement remains in effect), which Sections (together with all related definitions and ancillary provisions) are hereby incorporated by reference as though set forth herein in their entirety; PROVIDED that (i) references to "Bank" shall mean and be a reference to each Bank under the Credit Agreement, (ii) references to "Administrative Agent" shall mean and be a reference to the Administrative Agent under the Credit Agreement, (iii) references to "this Agreement", "herein", "hereunder", and words of similar import shall mean and be a reference to this Guaranty, (iv) references to "Schedule" shall mean and be a reference to the applicable Schedule in the CIT U.S. Credit Agreement (as in effect on the date hereof, without regard to any amendment, modification or waiver of such provisions and without regard to whether or not the CIT U.S. Credit Agreement remains in effect), and (v) references to Sections in such incorporated Sections shall be references to Sections of the CIT U.S. Credit Agreement, provided that to the extent such referenced Sections are themselves incorporated in this Guaranty by reference, references herein to such Sections shall be to such Sections as they are incorporated. 7. MISCELLANEOUS. (a) The Guarantor will make each payment hereunder in lawful money of Canada and in immediately available funds to the Administrative Agent at its address set forth above. (b) Upon the delivery of an Extension Notice and upon the extension of the Termination Date pursuant to the Credit Agreement, the Guarantor shall be deemed to have represented and warranted on and as of the date of such Extension Notice and the effective date of such extension, as the case may be, that (i) no Default or Event of Default (as such terms are defined in the CIT U.S. Credit Agreement) has occurred and is continuing, (ii) that the representations and warranties of the Guarantor contained herein are true and correct in all material respects on and as such date, except to the extent that such representations and warranties expressly relate to an earlier date, and (iii) since the date of the Guarantor's last audited financial statements and until the date of such extension, there has been no development or event which has or could reasonably be expected to have a Material Adverse Effect. -6- (c) No amendment of any provision of this Guaranty shall be effective unless it is in writing and signed by the Guarantor and the Required Banks, and no waiver of any provision of this Guaranty, and no consent to any departure by the Guarantor therefrom, shall be effective unless it is in writing and signed by the Required Banks, and then such waiver or consent shall be effective only in the specific instance for the specific purpose for which given; PROVIDED, HOWEVER, that no such amendment or waiver shall release the Guarantor from its guaranty of the Obligations, amend Section 2, Section 7(b), this Section 7(c) or Section 7(d), reduce any amount payable hereunder or extend the time of payment of any amounts payable hereunder, in each case without the written consent of all of the Banks. (d) No failure on the part of the Administrative Agent or any Bank to exercise, and no delay in exercising any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of the Administrative Agent or any Bank provided herein are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights of the Administrative Agent or any Bank hereunder are not conditional or contingent on any attempt by the Administrative Agent or any Bank to exercise any of its rights under any other agreement evidencing or securing the Obligations against such party or against any other person or entity. (e) If for the purpose of obtaining judgment in any court in any jurisdiction with respect to this Guaranty, it is necessary to convert into the currency of such jurisdiction (the "JUDGMENT CURRENCY") any amount due hereunder in any currency other than the Judgment Currency, then conversion shall be made at the rate of exchange prevailing on the Business Day before the day on which judgment is given. For this purpose "rate of exchange" means the rate at which the Administrative Agent would, on the relevant date, sell a similar amount of such currency in the Toronto foreign exchange market, against the Judgment Currency, in accordance with normal and reasonable banking procedures. In the event that there is a change in the rate of exchange prevailing between the Business Day before the day on which the judgment is given and the date of payment of the amount due, the Guarantor will, on the date of payment, pay such additional amounts as may be necessary to ensure that the amount paid on such date is the amount in the Judgment Currency which, when converted at the rate of exchange prevailing on the date of payment, is the amount then due under this Agreement in such other currency. In the event that the amount so paid exceeds, when so converted, the amount then due, the Administrative Agent shall remit to the Guarantor such excess. Any additional amount due from the Guarantor or the Administrative Agent under this section will be due as a separate debt and shall not be affected by judgment being obtained for any other sums due under or in respect of this Agreement. -7- (f) All communications provided for hereunder shall be in writing (including telecopier communication) and shall be mailed, telecopied or delivered, if to the Guarantor, to it at its address at 1211 Avenue of the Americas, New York, New York 10036 Attention: Treasurer; and if to the Administrative Agent, to its address at 200 Bay Street, 12th Floor, South Tower, Royal Bank Plaza, Toronto, Ontario M5J 2J5, Attention: Manager Agency; or, as to either such Person, at such other address as shall be designated by such Person in a written notice to such other Person complying as to delivery with the terms of this Section 7(e). All such notices and other communications shall be effective (i) if mailed, the earlier of three days after deposit in the mail or when received, (ii) if telecopied, when transmitted, and (iii) if delivered, upon delivery. (g) This Guaranty shall become effective as of the date hereof and replaces and supercedes the similar guaranty dated March 27, 2001, in relation to the Credit Agreement addressed to you by the former CIT Group, Inc., which Guaranty shall be released upon delivery of this Guaranty. (h) This Guaranty shall enure to the benefit of the Banks and their respective successors and assigns and shall be binding upon the Guarantor and its successors and assigns. 8. GOVERNING LAW. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 9. SUBMISSION TO JURISDICTION; WAIVERS. (a) The Guarantor hereby irrevocably and unconditionally: (i) submits for itself and its property in any legal action or proceeding relating to this Guaranty, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the Province of Ontario, the courts of Canada, and appellate courts of any thereof; (ii) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; and (iii) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction. -8- (b) The Guarantor agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially or similar form of mail), postage prepaid to the Guarantor at its address set forth above or at such other address of which the Administrative Agent shall have been notified pursuant thereto. (c) The Guarantor irrevocably designates and appoints the corporate secretary of the Company, having an office on the date hereof at Newcourt Centre, 207 Queens Quay West, Suite 700, Toronto, Ontario, M5J 1A7, as the Guarantor's authorized Administrative Agent, to accept and acknowledge on its behalf service of any and all process which may be served in any suit, action or proceeding referred to in Section 9. The Guarantor represents and warrants that such Administrative Agent has agreed to accept such appointment. Said designation and appointment shall not be revocable by the Guarantor until the Guaranty has terminated. If such Administrative Agent shall cease to act as Administrative Agent for the Guarantor, the Guarantor agrees to designate irrevocably and appoint without delay another such Administrative Agent satisfactory to the Administrative Agent. (d) The Guarantor consents to process being served in any suit, action or proceeding referred to in Section 9(c) by service of process upon its Administrative Agent appointed as provided in Section 9(c). 10. WAIVERS OF JURY TRIAL. THE GUARANTOR (AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, THE ADMINISTRATIVE AGENT AND THE BANKS) HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTY AND FOR ANY COUNTERCLAIM THEREIN. 11. INTEREST ACT (CANADA). For purposes of the Interest Act (Canada), (i) whenever any interest applicable to this Guaranty is calculated using a rate based on a year of 360 days, such rate determined pursuant to such calculation, when expressed as an annual rate, is equivalent to (x) the applicable rate based on a year of 360 days (y) multiplied by the actual number of days in the calendar year in which the period for which such interest or fee is payable (or compounded) ends, and (z) divided by 360 (ii) the principle of deemed reinvestment of interest does not apply to any interest calculation in respect of this Guaranty; and (iii) the rates of interest stipulated in respect of this Guaranty are intended to be nominal rates and not effective rates or yields. 12. TAXES AND OTHER TAXES. (a) Any and all payments to the Banks by the Guarantor hereunder shall be made free and clear of and without deduction or withholding for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and liabilities with respect thereto, excluding, in the case of each Bank, taxes imposed on its net income and all -9- capital, franchise and other business-related taxes imposed by any jurisdiction under any law to which such Bank is subject or by the United States (or any political subdivision or taxing authority thereof or therein) (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes"), unless such Taxes are required by law or the administration thereof to be deducted or withheld. If the Guarantor shall be required by law or the administration thereof to deduct or withhold any such Taxes from or in respect of any sum payable hereunder and, subject as provided in the next following sentence, (i) the sum payable shall be increased as may be necessary so that after making all required deductions or withholdings (including deductions or withholdings applicable to additional amounts paid under this paragraph), the applicable Banks receive an amount equal to the sum they would have received if no such deduction or withholding had been made; (ii) the Guarantor shall make such deductions or withholdings; and (iii) the Guarantor forthwith shall pay the full amount deducted or withheld to the relevant taxation or other authority in accordance with applicable law. (b) The Guarantor agrees to pay forthwith any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies (all such taxes, charges and levies being herein referred to as "Other Taxes") imposed by any jurisdiction (or any political subdivision or taxing authority thereof or therein) which arise from any payment made by the Guarantor hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Guaranty. (c) The Guarantor agrees to indemnify the Banks for the full amount of Taxes or Other Taxes not deducted or withheld and paid by it in accordance with Section 12(a) and Section 12(b) to the relevant taxation or other authority and any Taxes or Other Taxes imposed by any jurisdiction on amounts payable by it under this Section 12, paid by the applicable Banks and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not any such Taxes or Other Taxes were correctly or legally asserted. Payment under this indemnification shall be made within 30 days from the date the Administrative Agent or the relevant Banks make written demand therefor. A certificate as to the amount of such Taxes or Other Taxes and evidence of payment thereof submitted to the Guarantor by the Administrative Agent shall be PRIMA FACIE evidence of the amount due from the Guarantor to the Administrative Agent or the applicable Banks. (d) The Guarantor shall furnish to the Administrative Agent and the applicable Banks the original or a certified copy of a receipt evidencing any payment of Taxes or Other Taxes made by the Guarantor as soon as such receipt becomes available. (e) Any Bank claiming any additional amounts payable under this Section 12 shall, to the extent legally able to do so, upon reasonable written request from the Guarantor, file any certificate or document if such filing would avoid the need for or reduce the amount of any such additional amounts which may thereafter accrue, and the -10- Guarantor shall not be obligated to pay such additional amounts if, after the Guarantor's request, any Bank could have filed such certificate or document and failed to do so. (f) The provisions of this Section 12 shall survive the termination of this Guaranty. Very truly yours, THE CIT GROUP, INC. By:_________________________ Name: Title: EX-12 19 a2069484zex-12.txt EXHIBIT 12 EXHIBIT 12 CIT GROUP INC. AND SUBSIDIARIES COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES ($ IN MILLIONS)
FOR THE QUARTER ENDED FOR THE QUARTER ENDED DECEMBER 31, 2001 DECEMBER 31, 2000 --------------------- --------------------- (SUCCESSOR) (PREDECESSOR) Net income............................................ $239.1 $160.1 Provision for income taxes............................ 146.6 97.4 ------ ------ Earnings before provision for income taxes............ 385.7 257.5 ------ ------ Fixed charges: Interest and debt expense on indebtedness........... 349.1 652.2 Minority interest in subsidiary trust holding solely debentures of the Company......................... 3.7 4.8 Interest factor-one third of rentals on real and personal properties............................... 4.0 4.4 ------ ------ Total fixed charges................................... 356.8 661.4 ------ ------ Total earnings before provision for income taxes and fixed charges....................................... $742.5 $918.9 ====== ====== Ratios of earnings to fixed charges................... 2.08x 1.39x
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