Exhibit 10.1
REVOLVING CREDIT AGREEMENT
FIRST EMPIRE STATE CORPORATION
Dated as of November 24, 1995
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THE FIRST NATIONAL BANK OF BOSTON
TABLE OF CONTENTS
Section Title Page
SECTION I - DEFINITIONS
1.1 Definitions.......................................................... 1
1.2 Accounting Terms..................................................... 6
SECTION II - DESCRIPTION OF CREDIT
2.1 The Loans............................................................ 6
2.2 Notice and Manner of Borrowing or Conversion of Loans................ 6
2.3 Fees................................................................. 7
2.4 Reduction of Commitment Amount....................................... 7
2.5 The Note............................................................. 7
2.6 Duration of Interest Periods......................................... 8
2.7 Interest Rates and Payments of Interest.............................. 8
2.8 Changed Circumstances................................................ 9
2.9 Capital Requirements.................................................10
2.10 Payments and Prepayments of the Loans................................11
2.11 Method of Payment....................................................11
2.12 Overdue Payments.....................................................11
2.13 Payments not at End of Interest Period...............................11
2.14 Computation of Interest and Fees.....................................12
SECTION III - CONDITIONS OF LOAN
3.1 Conditions Precedent to Initial Loan.................................12
3.2 Conditions Precedent to all Loans....................................13
SECTION IV - REPRESENTATIONS AND WARRANTIES
4.1 Organization and Qualification.......................................14
4.2 Corporate Authority..................................................14
4.3 Valid Obligations....................................................14
4.4 Consents or Approvals................................................14
4.5 Title to Properties; Absence of Encumbrances.........................15
4.6 Financial Statements.................................................15
4.7 Changes..............................................................15
4.8 Defaults.............................................................15
4.9 Taxes................................................................15
4.10 Litigation...........................................................15
4.11 Use of Proceeds......................................................16
4.12 Subsidiaries.........................................................16
4.13 Investment Company Act, etc..........................................16
4.14 Compliance with ERISA................................................16
4.15 Environmental Matters................................................16
(i)
Section Title Page
SECTION V - AFFIRMATIVE COVENANTS
5.1 Financial Statements and other Reporting Requirements................17
5.2 Conduct of Business..................................................18
5.3 Maintenance and Insurance............................................19
5.4 Taxes................................................................19
5.5 Inspection by the Bank...............................................19
5.6 Maintenance of Books and Records.....................................19
5.7 Further Assurances...................................................19
SECTION VI - NEGATIVE COVENANTS
6.1 Encumbrances.........................................................20
6.2 Merger; Consolidation; Sale or Lease of Assets.......................21
6.3 Stock of Subsidiaries................................................21
6.4 Investments..........................................................22
6.5 Acquisitions.........................................................22
6.6 ERISA................................................................22
6.7 Double Leverage Ratio................................................22
6.8 Nonperforming Asset Coverage Ratio...................................22
6.9 Adequate Capitalization of Banking Subsidiaries......................23
6.10 Minimum Tangible Net Worth...........................................23
SECTION VII - DEFAULTS
7.1 Events of Default....................................................23
7.2 Remedies.............................................................25
SECTION VIII - MISCELLANEOUS
8.1 Notices..............................................................26
8.2 Expenses.............................................................27
8.3 Set-Off..............................................................27
8.4 Term of Agreement....................................................27
8.5 No Waivers...........................................................27
8.6 Governing Law........................................................28
8.7 Amendments...........................................................28
8.8 Binding Effect of Agreement..........................................28
8.9 Counterparts.........................................................28
8.10 Partial Invalidity...................................................28
8.11 Captions.............................................................28
8.12 Waiver of Jury Trial.................................................28
8.13 Entire Agreement.....................................................29
(ii)
EXHIBITS
EXHIBIT A - Form of Promissory Note
EXHIBIT B - Form of Notice of Borrowing or Conversion
EXHIBIT C - Encumbrances
EXHIBIT D - Litigation; Environmental Matters
EXHIBIT E - Material Subsidiaries
EXHIBIT F - Form of Report of Chief Financial Officer
EXHIBIT G - Form of Opinion of Counsel to the Borrower
(iii)
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REVOLVING CREDIT AGREEMENT
Dated as of November 24, 1995
THIS REVOLVING CREDIT AGREEMENT is made as of November 24, 1995 by and
between FIRST EMPIRE STATE CORPORATION (the "Borrower"), a New York corporation
having its head xxxxxx xx Xxx X&X Xxxxx, Xxxxxxx, Xxx Xxxx 00000 and THE FIRST
NATIONAL BANK OF BOSTON (the "Bank"), a national banking association having its
head office at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
SECTION I
DEFINITIONS
1.1. Definitions.
All capitalized terms used in this Agreement or in the Note or in any
certificate, report or other document made or delivered pursuant to this
Agreement (unless otherwise defined therein) shall have the meanings assigned to
them below:
Adjusted Eurodollar Rate. Applicable to any Interest Period, shall mean
a rate per annum determined pursuant to the following formula, rounded upwards,
if necessary, to the next higher 1/100 of 1%:
Adjusted Eurodollar Rate = Interbank Offered Rate
----------------------
1.00 - Reserve Percentage
Where:
"Interbank Offered Rate" applicable to any Eurodollar Loan for
any Interest Period means the rate of interest determined by the
Bank to be the prevailing rate per annum at which deposits in
U.S. dollars are offered to the Bank by first-class banks in the
interbank Eurodollar market in which it regularly participates on
or about 10:00 a.m. (Boston, Massachusetts time) two Business
Days before the first day of such Interest Period in an amount
approximately equal to the principal amount of the Eurodollar
Loan to which such Interest Period is to apply for a period of
time approximately equal to such Interest Period.
"Reserve Percentage" applicable to any Interest Period means the
rate (expressed as a decimal) applicable to the Bank during such
Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System for determining
the maximum reserve requirement (including, without limitation,
any basic,
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supplemental, emergency or marginal reserve requirement) of the
Bank with respect to "Eurocurrency liabilities" as that term is
defined under such regulations.
The Adjusted Eurodollar Rate shall be adjusted automatically as of the effective
date of any change in the Reserve Percentage.
Agreement. This Agreement, as the same may be supplemented or amended
from time to time.
Bank. See Preamble.
Base Rate. The greater of (i) the rate of interest announced from time
to time by the Bank at its head office as its Base Rate, and (ii) the Federal
Funds Effective Rate plus 1/2 of 1% per annum (rounded upwards, if necessary, to
the next 1/8 of 1%).
Base Rate Loan. Any Loan bearing interest determined with reference to
the Base Rate.
Business Day. Any day other than a Saturday, Sunday or legal holiday on
which banks in Boston, Massachusetts or New York, New York are open for the
conduct of a substantial part of their commercial banking business, and with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day that is such a Business Day
and that is also a day for trading between banks in U.S. Dollar deposits in the
interbank Eurodollar market.
Code. The Internal Revenue Code of 1986 and the rules and regulations
thereunder, collectively, as the same may from time to time be supplemented or
amended.
Commitment Amount. $25,000,000 or any lesser amount, including zero,
resulting from a termination or reduction of such amount in accordance with
Section 2.4 or Section 7.2.
Borrower. See Preamble.
Controlled Group. All trades or businesses (whether or not
incorporated) under common control that, together with the Borrower, are treated
as a single employer under Section 414(b) or 414(c) of the Code or Section 4001
of ERISA.
Default. An Event of Default or event or condition that, but for the
requirement that time elapse or notice be given, or both, would constitute an
Event of Default.
Encumbrances. See Section 6.1.
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ERISA. The Employee Retirement Income Security Act of 1974 and the
rules and regulations thereunder, collectively, as the same may from time to
time be supplemented or amended.
Environmental Laws. All applicable foreign, federal, state and local
environmental, health or safety statutes, laws, regulations, rules, ordinances,
policies and rules or common law whether now existing or hereafter enacted or
promulgated, relating to injury to, or the protection of, real or personal
property or human health or the environment.
Eurodollar Loan. Any Loan bearing interest at a rate determined with
reference to the Adjusted Eurodollar Rate.
Event of Default. Any event described in Section 7.1.
FFIEC. The Federal Financial Institutions Examination Council, or such
other regulatory agency or authority having jurisdiction over financial
reporting by banks and bank holding companies.
Federal Funds Effective Rate. For any day, a fluctuating interest rate
per annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by the Bank
from three Federal funds brokers of recognized standing selected by the Bank.
Hazardous Material. Any substance which is or becomes defined as a
"hazardous waste", "hazardous material" or "hazardous substance" or "controlled
industrial waste" or "pollutant" or "contaminant" under any Environmental Law or
which is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and is or becomes regulated by
any governmental authority or instrumentality or which contains gasoline, diesel
fuel or other petroleum products, asbestos or polychlorinated biphenyls
("PCB's").
Interest Period.
With respect to each Eurodollar Loan, the period commencing on the date
of the making or continuation of or conversion to such Eurodollar Loan and
ending one, two, three or six months thereafter, as the Borrower may elect in
the applicable Notice of Borrowing or Conversion, provided that:
(i) any Interest Period (other than an Interest Period determined
pursuant to clause (iii) below) that would otherwise end on a day that
is not a Business Day shall be extended to the next succeeding Business
Day unless, in the case of Eurodollar Loans, such Business Day falls in
the
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next calendar month, in which case such Interest Period shall end on
the immediately preceding Business Day;
(ii) any Interest Period applicable to a Eurodollar Loan that
begins on the last 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 (iii) below,
end on the last Business Day of a calendar month;
(iii) any Interest Period that would otherwise end after the
Termination Date shall end on the Termination Date; and
(iv) notwithstanding clause (iii) above, no Interest Period
applicable to a Eurodollar Loan shall have a duration of less than one
month; and if any Interest Period applicable to such Loan would be for a
shorter period, such Interest Period shall not be available hereunder.
Investment. The purchase or acquisition of any share of capital stock,
partnership interest, evidence of indebtedness or other equity security of any
other person or entity, any loan, advance or extension of credit to, or
contribution to the capital of, any other person or entity, any real estate held
for sale or investment, any commodities futures contracts held other than in
connection with bona fide hedging transactions, any other investment in any
other person or entity, and the making of any commitment or acquisition of any
option to make an Investment.
Loan. A loan made to the Borrower by the Bank pursuant to Section II of
this Agreement, and "Loans" means all of such loans, collectively.
Material Subsidiary. Those Subsidiaries listed on Exhibit E hereto, and
any other Subsidiary of the Borrower that is a federally-insured depository
institution or an operating Subsidiary of the Borrower or an operating
Subsidiary of any Subsidiary of the Borrower. "Material Subsidiary" shall not
include any Subsidiary which is organized or operated for the purpose of
holding, managing or disposing of real or personal property which is acquired by
the Borrower or any Subsidiary in satisfaction of a debt previously contracted;
nor shall "Material Subsidiary" include any Subsidiary which is otherwise
inactive or any active Subsidiary the primary purpose of which is to hold
noncontrolling interests in other persons or entities.
Moody's. Xxxxx'x Investors Service, Inc., or its successors.
Nonperforming Asset. As defined in Section 6.8.
Note. A promissory note of the Borrower, substantially in the form of
Exhibit A hereto, evidencing the obligation of the Borrower to the Bank to repay
the Loans.
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Notice of Borrowing or Conversion. See Section 2.2.
Obligations. All obligations of the Borrower to the Bank hereunder of
every kind and description, direct or indirect, absolute or contingent, primary
or secondary, due or to become due, now existing or hereafter arising,
regardless of how they arise or by what agreement or instrument, if any, and
including obligations to perform acts and refrain from taking action as well as
obligations to pay money.
PBGC. The Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
Permitted Encumbrances. See Section 6.1.
Plan. An employee pension or other benefit plan that is subject to
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code and is either (i) maintained by the Borrower or any member of the
Controlled Group for employees of the Borrower or any member of the Controlled
Group or (ii) if such Plan is established, maintained pursuant to a collective
bargaining agreement or any other arrangement under which more than one employer
makes contributions and to which the Borrower or any member of the Controlled
Group is then making or accruing an obligation to make contributions or has
within the preceding five Plan years made contributions.
Rating. The rating assigned by S&P or Moody's, as applicable, to the
unsecured long-term indebtedness for money borrowed, without credit enhancements
of Manufacturers and Traders Trust Company. Any change in the Rating, and the
corresponding adjustment in the facility fee payable pursuant to Section 2.3(a)
and the applicable margin for any Eurodollar Loan set forth in Section 2.7(b),
shall be effective as of the date of the public announcement of such change.
S&P. Standard & Poor's Rating Group, a division of McGraw Hill, Inc.,
and its successors.
Subsidiary. Any corporation, association, joint stock company, business
trust or other similar organization of which 50% or more of the ordinary voting
power for the election of a majority of the members of the board of directors or
other governing body of such entity is held or controlled by the Borrower or a
Subsidiary of the Borrower; or any other such entity the management of which is
directly or indirectly controlled by the Borrower or a Subsidiary of the
Borrower through the exercise of voting power or otherwise; or any joint
venture, whether incorporated or not, in which the Borrower has an ownership
interest of 50% or more.
Termination Date. November 24, 1998 or such earlier date on which the
commitment to make Loans is terminated or the Commitment Amount is reduced to
zero in accordance with the terms hereof.
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1.2. Accounting Terms. All terms of an accounting character shall have
the meanings assigned thereto by generally accepted accounting principles or
regulatory accounting principles, as applicable, as applied on a basis
consistent with the financial statements referred to in Section 4.6 of this
Agreement, but as herein specifically modified.
SECTION II
DESCRIPTION OF CREDIT
2.1. The Loans. (a) Subject to the terms and conditions hereof, the
Bank will make Loans to the Borrower, from time to time until the close of
business on the Termination Date, in such sums as the Borrower may request,
provided that the aggregate principal amount of all Loans at any one time
outstanding hereunder may not exceed the Commitment Amount. The first Loan
hereunder shall be a $12,000,000 one-month Eurodollar Loan, which shall be
credited by the Bank to Account No. 000-0-000000 at The Chase Manhattan Bank,
National Association, for the credit of the Borrower, before 10:00 a.m. (Boston,
Massachusetts time) on November 29, 1995. The preceding sentence shall
constitute the appropriate notice contemplated by Section 2.2 of this Agreement
for such Loan.
The Borrower may borrow, prepay pursuant to Section 2.10 and reborrow,
from the date of this Agreement until the Termination Date, the Commitment
Amount or any lesser sum that is at least $1,000,000 and an integral multiple of
$1,000,000. Any Loan not repaid by the Termination Date shall be due and payable
on the Termination Date.
(b) Provided that no Default shall have occurred and be continuing, the
Borrower may convert all or any part (in integral multiples of $1,000,000) of
any outstanding Loan into a Loan of any other type provided for in this
Agreement in the same principal amount, on any Business Day (which, in the case
of a conversion of a Eurodollar Loan, shall be the last day of the applicable
Interest Period). The Borrower shall give the Bank prior notice of each such
conversion (which notice shall be effective upon receipt) in accordance with
Section 2.2.
2.2. Notice and Manner of Borrowing or Conversion of Loans. (a)
Whenever the Borrower desires to borrow, continue a Loan or convert an
outstanding Loan into a Loan of another type provided for in this Agreement, the
Borrower shall notify the Bank (which notice shall be irrevocable) by telephone
or facsimile transmission received no later than 1:00 p.m. (Boston,
Massachusetts time) (i) one Business Day before the day on which the requested
Loan is to be made, continued as or converted to a Base Rate Loan, and (ii)
three Business Days before the day on which the requested Loan is to be made,
continued as or converted to a Eurodollar Loan. Such notice shall specify (i)
the effective date and amount of each Loan or portion thereof to be continued or
converted, subject to the limitations set forth in Section 2.1, (ii) the
applicable interest rate option, and (iii) the duration of the applicable
Interest
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Period, if any (subject to the provisions of the definition of Interest Period
and Section 2.6). Each such notification (a "Notice of Borrowing or Conversion")
shall be immediately followed by a written confirmation thereof by the Borrower
in substantially the form of Exhibit B hereto, provided that if such written
confirmation differs in any material respect from the action taken by the Bank,
the records of the Bank shall constitute a rebuttable presumption of the
correctness of such actions.
(b) Subject to the terms and conditions hereof, the Bank shall make
each Loan on the effective date specified therefor by crediting the amount of
such Loan in immediately available funds to such account as may be designated by
the Borrower in the applicable Notice of Borrowing or Conversion.
2.3. Fees. (a) The Borrower shall pay to the Bank a facility fee on the
daily average Commitment Amount during each quarter or portion thereof, computed
at the rate per annum equal to the applicable percentage set forth below, for
the then effective Rating; provided that if only one Rating shall then be in
effect, that Rating shall apply; and provided, further, if different level
Ratings by Moody's and S&P shall then be in effect , the lower Rating shall
apply:
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APPLICABLE RATING AA-/Aa3 A+/A1 or X/X0 X-/X0 BBB/Baa2
BBB+/Baa1 or below
------------------------------------------------------------------------------
APPLICABLE .08% .125% .15% .187%
PERCENTAGE
------------------------------------------------------------------------------
Facility fees shall be payable quarterly in arrears on the last day of each
calendar quarter commencing December 31, 1995 and on the Termination Date.
(b) Whenever the balance of outstanding Loans exceeds 50% of the
Commitment Amount during any quarter or portion thereof, the Borrower shall pay
to the Bank a usage fee equal to .10% per annum of the daily average of such
excess principal balance. Usage fees shall be payable quarterly in arrears on
the last day of each calendar quarter commencing December 31, 1995 and on the
Termination Date.
2.4. Reduction of Commitment Amount. The Borrower may from time to time
by written notice delivered to the Bank at least five Business Days prior to the
date of the requested reduction, reduce by integral multiples of $1,000,000 any
unborrowed portion of the Commitment Amount. No reduction of the Commitment
Amount shall be subject to reinstatement.
2.5. The Note. The Loans shall be evidenced by the Note, payable to the
order of the Bank and having a final maturity of the Termination Date. The Note
shall be dated on or before the date of the first Loan and shall have the blanks
therein appropriately completed. The Bank shall, and is hereby irrevocably
authorized by the Borrower to, enter on the schedule forming a part of the Note
or otherwise in its records appropriate notations evidencing the date and the
amount of each Loan, the applicable
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interest rate and the date and amount of each payment of principal made by the
Borrower with respect thereto; and in the absence of manifest error, such
notations shall constitute a rebuttable presumption of the correctness thereof;
provided that no failure on the part of the Bank to make any such notation shall
in any way affect any Loan or the rights or obligations of the Bank or the
Borrower with respect thereto.
2.6. Duration of Interest Periods. (a) Subject to the provisions of the
definition of Interest Period, the duration of each Interest Period applicable
to a Loan shall be as specified in the applicable Notice of Borrowing or
Conversion. The Borrower shall have the option to elect a subsequent Interest
Period to be applicable to such Loan by giving notice of such election to the
Bank received no later than 1:00 p.m. (Boston, Massachusetts time) (i) on the
date one Business Day before the end of the then applicable Interest Period if
such Loan is to be continued as or converted to a Base Rate Loan, and (ii) three
Business Days before the end of the then applicable Interest Period if such Loan
is to be continued as or converted to a Eurodollar Loan.
(b) If the Bank does not receive a Notice of Borrowing or Conversion
within the applicable time limits specified in subsection (a) above, or if, when
such notice must be given, a Default exists, the Borrower shall be deemed to
have elected to convert such Loan into a Base Rate Loan on the last day of the
then current Interest Period.
(c) Notwithstanding the foregoing, the Borrower may not select an
Interest Period that would end, but for the provisions of the definition of
Interest Period, after the Termination Date.
2.7. Interest Rates and Payments of Interest. (a) Each Base Rate Loan
shall bear interest on the outstanding principal amount thereof at a rate per
annum equal to the Base Rate, which rate shall change contemporaneously with any
change in the Base Rate. Such interest shall be payable on the last day of each
calendar quarter, commencing December 31, 1995, and when such Loan is due
(whether at maturity, by reason of acceleration or otherwise).
(b) Each Eurodollar Loan shall bear interest on the outstanding
principal amount thereof, for each Interest Period, at a rate per annum equal to
the applicable Adjusted Eurodollar Rate plus the applicable percentage set forth
below, for the then effective Rating; provided that if only one Rating shall
then be in effect, that Rating shall apply; and provided, further, if different
level Ratings by Moody's and S&P shall then be in effect , the lower Rating
shall apply:
-------------------------------------------------------------------------------
APPLICABLE RATING AA-/Aa3 A+/A1 or X/X0 X-/X0 BBB/Baa2
BBB+/Baa1 or below
-------------------------------------------------------------------------------
APPLICABLE PERCENTAGE .15% .20% .25% .30%
-------------------------------------------------------------------------------
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Such interest shall be payable for such Interest Period on the last day thereof
and when such Eurodollar Loan is due (whether at maturity, by reason of
acceleration or otherwise) and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof.
2.8. Changed Circumstances.
(a) In the event that the Bank shall have determined in good faith
(which determination shall be final and conclusive, so long as the Bank shall
provide reasonable evidence of the basis of such determination) that:
(i) adequate and fair means do not exist for ascertaining the
Interbank Offered Rate on any date on which the Adjusted Eurodollar
Rate would otherwise be set, or
(ii) the making of a Eurodollar Loan or the continuation of or
conversion of any Loan to a Eurodollar Loan has been made impracticable
or unlawful by (1) the occurrence of a contingency that materially and
adversely affects the interbank Eurodollar market or (2) compliance by
the Bank in good faith with any applicable law or governmental
regulation, guideline or order or interpretation or change thereof by
any governmental authority charged with the interpretation or
administration thereof or with any request or directive of any such
governmental authority (whether or not having the force of law); or
(iii) the Adjusted Eurodollar Rate no longer represents the
effective cost to the Bank for U.S. dollar deposits in the interbank
market for deposits in which it regularly participates;
then, and in any such event, the Bank shall forthwith so notify the Borrower.
Until the Bank notifies the Borrower that the circumstances giving rise to such
notice no longer apply, the obligation of the Bank to allow selection by the
Borrower of Eurodollar Loans shall be suspended. If at the time the Bank so
notifies the Borrower, the Borrower has previously given the Bank a Notice of
Borrowing or Conversion with respect to one or more Eurodollar Loans but such
Loans have not yet been made, continued or converted, such notification shall be
deemed to be void and the Borrower may borrow Loans of another type by giving a
substitute Notice of Borrowing or Conversion pursuant to Section 2.2 hereof.
Upon such date as shall be specified in such notice (which shall not be
earlier than the date such notice is given) the Borrower shall forthwith prepay
all outstanding Eurodollar Loans, together with interest thereon and any amounts
required to be paid pursuant to Section 2.13, and may borrow a Loan of another
type in accordance with Section 2.1 hereof by giving a Notice of Borrowing or
Conversion pursuant to Section 2.2 hereof.
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(b) In case the adoption of or any change in any law, regulation, treaty
or official directive or the interpretation or application thereof by any court
or by any governmental authority charged with the administration thereof or the
compliance with any guideline or request of any central bank or other
governmental authority (whether or not having the force of law):
(i) subjects the Bank to any tax with respect to payments of
principal or interest or any other amounts payable hereunder by the
Borrower or otherwise with respect to the transactions contemplated
hereby (except for taxes on the overall net income of the Bank imposed
by the United States of America or any political subdivision thereof or
any taxes imposed in substitution or replacement for taxes on the
overall net income of the Bank), or
(ii) imposes, modifies or deems applicable any deposit insurance,
reserve, special deposit or similar requirement against assets held by,
or deposits in or for the account of, or loans by, the Bank (other than
such requirements as are already included in the determination of the
Adjusted Eurodollar Rate), or
(iii) imposes upon the Bank any other condition with respect to
its or the Borrower's performance under this Agreement,
and the result of any of the foregoing is to increase the cost to the Bank,
reduce the income receivable by the Bank or impose any expense upon the Bank
with respect to any Loans, the Bank shall notify the Borrower thereof. The
Borrower agrees to pay to the Bank the amount of such increase in cost,
reduction in income or additional expense as and when such cost, reduction or
expense is incurred or determined, upon presentation by the Bank of a statement
in the amount and setting forth the Bank's calculation thereof, which statement
shall be deemed true and correct absent manifest error.
2.9. Capital Requirements. If after the date hereof the Bank determines
that (i) the adoption of or change in any law, rule, regulation or guideline
regarding capital requirements for banks or bank holding companies, or any
change in the interpretation or application thereof by any governmental
authority charged with the administration thereof, or (ii) compliance by the
Bank or its parent bank holding company with any guideline, request or directive
of any such entity regarding capital adequacy (whether or not having the force
of law), has the effect of reducing the return on the Bank's or such holding
company's capital as a consequence of the Bank's commitment to make Loans
hereunder to a level below that which the Bank or such holding company could
have achieved but for such adoption, change or compliance (taking into
consideration the Bank's or such holding company's then existing policies with
respect to capital adequacy and assuming the full utilization of such entity's
capital) by any amount deemed by the Bank to be material, then the Bank shall
notify the Borrower thereof. The Borrower agrees to pay to the Bank the amount
of such reduction in the return on capital as and when such reduction is
determined, upon presentation by the Bank of a statement in the amount and
setting
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forth the Bank's calculation thereof, which statement shall be deemed true and
correct absent manifest error. In determining such amount, the Bank may use any
reasonable averaging and attribution methods.
2.10. Payments and Prepayments of the Loans. The Loans may be prepaid at
any time, without premium or penalty, in minimum amounts of $1,000,000 but with
accrued interest to the date of payment (i) in the case of Eurodollar Loans, on
the last day of any applicable Interest Period and upon three Business Days'
notice, and (ii) in the case of Base Rate Loans, at any time upon one Business
Day's notice. No prepayment of the Loans shall affect the Commitment Amount or
impair the Borrower's right to borrow as set forth in Section 2.1.
2.11. Method of Payment. All payments and prepayments of principal and
all payments of interest, fees and other amounts payable hereunder shall be made
by the Borrower to the Bank at its head office in immediately available funds,
on or before 1:00 p.m. (Boston, Massachusetts time) on the due date thereof,
free and clear of, and without any deduction or withholding for, any taxes or
other payments. The Bank may, and the Borrower hereby authorizes the Bank to,
debit the amount of any payment not made by such time to the demand deposit
account of the Borrower with the Bank, if any.
2.12. Overdue Payments. Overdue principal (whether at maturity, by
reason of acceleration or otherwise) and, to the extent permitted by applicable
law, overdue interest and fees or any other amounts payable hereunder or under
the Note shall bear interest from and including the due date until paid,
compounded daily and payable on demand, at a rate per annum equal to (i) if such
due date occurs prior to the end of an Interest Period, 1% above the interest
rate applicable to such Loan for such Interest Period until the expiration of
such Interest Period, and thereafter, 1% above the Base Rate; and (ii) in all
other cases, 1% above the rate then applicable to Base Rate Loans.
2.13. Payments Not at End of Interest Period. If the Borrower for any
reason makes any payment of principal of any Eurodollar Loan on any day other
than the last day of an Interest Period applicable to such Eurodollar Loan, or
fails to borrow, continue or convert to a Eurodollar Loan after giving a Notice
of Borrowing or Conversion pursuant to Section 2.2, or if any Eurodollar Loan is
accelerated pursuant to Section 7.2(b), the Borrower shall pay to the Bank an
amount computed pursuant to the following formula:
L = (R - T) x P x D
---------------
360
L = amount payable to the Bank
R = interest rate on such Loan
T = effective interest rate per annum at which any
readily marketable bond or other obligation of the
United States, selected at the Bank's sole
discretion, maturing on or near the last day of
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the then applicable Interest Period of such
Loan and in approximately the same amount as such
Loan can be purchased by the Bank on the day of
such payment of principal or failure to borrow or
continue or convert
P = the amount of principal prepaid or the amount of
the requested Loan
D = the number of days remaining in the Interest
Period as of the date of such payment or the number
of days of the requested Interest Period
The Borrower shall pay such amount upon presentation by the Bank of a statement
setting forth the amount and the Bank's calculation thereof, which statement
shall be deemed true and correct absent manifest error.
2.14. Computation of Interest and Fees. Interest and all fees payable
hereunder shall be computed daily on the basis of a year of 360 days and paid
for the actual number of days for which due. If the due date for any payment of
principal is extended by operation of law, interest shall be payable for such
extended time. If any payment required by this Agreement becomes due on a day
that is not a Business Day such payment may be made on the next succeeding
Business Day (unless, in the case of Eurodollar Loans, such next succeeding
Business Day falls in the next calendar month, in which case payment shall be
due on the preceding Business Day), and such extension or reduction shall be
included in computing interest in connection with such payment.
SECTION III
CONDITIONS OF LOANS
3.1. Conditions Precedent to Initial Loan. The obligation of the Bank to
make its initial Loan is subject to the condition precedent that the Bank shall
have received, in form and substance satisfactory to the Bank and its counsel,
the following:
(a) this Agreement and the Note, duly executed by the Borrower;
(b) a certificate of the Secretary or an Assistant Secretary of the
Borrower with respect to resolutions of the Board of Directors of the Borrower
authorizing the execution and delivery of this Agreement and the Note and
identifying the officer(s) authorized to execute, deliver and take all other
actions required under this Agreement, and providing specimen signatures of such
officers;
(c) the certificate of incorporation of the Borrower and all amendments
and supplements thereto, filed in the office of the Secretary of State of New
York, each certified by the Secretary or an
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Assistant Secretary of the Borrower as being a true and correct copy thereof;
(d) the Bylaws of the Borrower and all amendments and supplements
thereto, certified by the Secretary or an Assistant Secretary as being a true
and correct copy thereof as currently in effect;
(e) an opinion addressed to it from Xxxxxxx X. Xxxxxxx,, General Counsel
of the Borrower, substantially in the form of Exhibit G hereto; and
(f) such other documents, and completion of such other matters, as
counsel for the Bank may deem necessary or appropriate.
3.2. Conditions Precedent to all Loans. The obligation of the Bank to
make each Loan, including the initial Loan, or continue or convert Loans to
Loans of another type, is further subject to the following conditions:
(a) timely receipt by the Bank of the Notice of Borrowing or Conversion
as provided in Section 2.2;
(b) the representations and warranties contained in Section IV shall be
true and accurate in all material respects on and as of the date of such Notice
of Borrowing or Conversion and on the effective date of the making, continuation
or conversion of each Loan as though made at and as of each such date (except to
the extent that such representations and warranties expressly relate to an
earlier date), and no Default shall have occurred and be continuing, or would
result from such Loan;
(c) the resolutions referred to in Section 3.1(b) shall remain in full
force and effect; and
(d) no change shall have occurred in any law or regulation or
interpretation thereof that, in the opinion of counsel for the Bank, would make
it illegal or against the policy of any governmental agency or authority for the
Bank to make Loans hereunder, provided that the Bank shall so advise the
Borrower in writing, setting forth the basis of such opinion (but only if the
Bank in its sole discretion believes that it may then disclose such
information).
The making of each Loan shall be deemed to be a representation and warranty
by the Borrower on the date of the making, continuation or conversion of such
Loan as to the accuracy of the facts referred to in subsection (b) of this
Section 3.2.
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SECTION IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Bank to enter into this Agreement and to make Loans
hereunder, the Borrower represents and warrants to the Bank that:
4.1. Organization and Qualification. Each of the Borrower and its
Subsidiaries (a) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, (b) has all
requisite corporate power to own its property and conduct its business as now
conducted and as presently contemplated and (c) is duly qualified and in good
standing as a foreign corporation and is duly authorized to do business in each
jurisdiction where the nature of its properties or business requires such
qualification.
4.2. Corporate Authority. The execution, delivery and performance of
this Agreement and the Note and the transactions contemplated hereby are within
the corporate power and authority of the Borrower and have been authorized by
all necessary corporate proceedings, and do not and will not (a) require any
consent or approval of the stockholders of the Borrower, (b) contravene any
provision of the charter documents or by-laws of the Borrower or any law, rule
or regulation applicable to the Borrower, (c) contravene any provision of, or
constitute an event of default or event that, but for the requirement that time
elapse or notice be given, or both, would constitute an event of default under,
any other agreement, instrument, order or undertaking binding on the Borrower,
or (d) result in or require the imposition of any Encumbrance on any of the
properties, assets or rights of the Borrower.
4.3. Valid Obligations. This Agreement and the Note and all of their
respective terms and provisions are the legal, valid and binding obligations of
the Borrower, enforceable in accordance with their respective terms except as
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforcement of creditors' rights generally, and except as the
remedy of specific performance or of injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.
4.4. Consents or Approvals. The execution, delivery and performance of
this Agreement and the Note and the transactions contemplated herein do not
require any approval or consent of, or filing or registration with, any
governmental or other agency or authority, or any other party.
-15-
4.5. Title to Properties; Absence of Encumbrances. Each of the Borrower
and its Subsidiaries has good and marketable title to all of the properties,
assets and rights of every kind and nature now purported to be owned by it,
including, without limitation, such properties, assets and rights as are
reflected in the financial statements referred to in Section 4.6 (except such
properties, assets or rights as have been disposed of in the ordinary course of
business since the date thereof), free from all Encumbrances except Permitted
Encumbrances or those Encumbrances disclosed in Exhibit C hereto, and, except as
so disclosed, free from all defects of title that might materially adversely
affect such properties, assets or rights, taken as a whole.
4.6. Financial Statements. The Borrower has furnished the Bank its
consolidated balance sheet as of December 31, 1994 and its consolidated
statements of income, changes in stockholders' equity and cash flow for the
fiscal year then ended, and related footnotes, audited and certified by Price
Waterhouse. The Borrower has also furnished the Bank its consolidated balance
sheet as of June 30, 1995 and its consolidated statements of income, changes in
stockholders' equity and cash flow for the fiscal quarter then ended, certified
by the principal financial officer of the Borrower but subject, however, to
normal, recurring year-end adjustments that shall not in the aggregate be
material in amount. All such financial statements were prepared in accordance
with generally accepted accounting principles or regulatory accounting
principles, as applicable, applied on a consistent basis throughout the periods
specified and present fairly the financial position of the Borrower and its
Subsidiaries as of such dates and the results of the operations of the Borrower
and its Subsidiaries for such periods. There are no liabilities, contingent or
otherwise, not disclosed in such financial statements that involve a material
amount.
4.7. Changes. Since the date of the most recent financial statements
referred to in Section 4.6, there have been no changes in the assets,
liabilities, financial condition, business or prospects of the Borrower or any
of its Subsidiaries other than changes in the ordinary course of business, the
effect of which has not, in the aggregate, been materially adverse.
4.8. Defaults. As of the date of this Agreement, no Default exists.
4.9. Taxes. The Borrower and each Subsidiary have filed all federal,
state and other tax returns required to be filed, within the applicable filing
due dates (including any extensions of such dates); and all taxes, assessments
and other governmental charges due from the Borrower and each Subsidiary have
been fully paid. The Borrower and each Subsidiary have established on their
books reserves adequate for the payment of all federal, state and other tax
liabilities.
4.10. Litigation. Except as set forth on Exhibit D hereto, there is no
litigation, arbitration, proceeding or investigation pending, or, to the
knowledge of the Borrower's or any Subsidiary's officers, threatened, against
the Borrower or any Subsidiary that, if adversely determined, could, in the
opinion of
-16-
counsel for the Borrower, result in a judgment in excess of $10,000,000 not
adequately covered by insurance or as to which adequate reserves are not being
maintained, could result in a forfeiture of all or any substantial part of the
property of the Borrower or its Subsidiaries, or could otherwise have a material
adverse effect on the assets, business or prospects of the Borrower or any
Subsidiary.
4.11. Use of Proceeds. No portion of any Loan is to be used for the
"purpose of purchasing or carrying" any "margin stock" as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. 221 and 224, as amended; and following the application of the proceeds of
each Loan, the value of all "margin stock" of the Borrower will not exceed 25%
of the value of the total assets of the Borrower that are subject to the
restrictions set forth in Section 6.1 and 6.2.
4.12. Subsidiaries. As of the date of this Agreement, all the
Subsidiaries of the Borrower are listed on Exhibit E hereto. The Borrower or a
Subsidiary of the Borrower is the owner, free and clear of all liens and
encumbrances, of all of the issued and outstanding stock of each Subsidiary. All
shares of such stock have been validly issued and are fully paid and
nonassessable, and no rights to subscribe to any additional shares have been
granted, and no options, warrants or similar rights are outstanding.
4.13. Investment Company Act, etc. Neither the Borrower nor any of its
Subsidiaries is subject to regulation under the Investment Company Act of 1940,
as amended, the Public Utility Holding Company Act of 1935, as amended, or any
other statute or regulation that limits its ability to incur indebtedness for
money borrowed.
4.14. Compliance with ERISA. The Borrower and each member of the
Controlled Group have fulfilled their obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are in compliance
in all material respects with the applicable provisions of ERISA and the Code,
and have not incurred any liability to the PBGC or a Plan under Title IV of
ERISA; and no "prohibited transaction" or "reportable event" (as such terms are
defined in ERISA) has occurred with respect to any Plan.
4.15. Environmental Matters. The Borrower and each of its Subsidiaries
are in compliance, in all material respects, with all Environmental Laws. No
demand, claim, notice, suit, suit in equity, action, administrative action,
investigation or inquiry arising under, relating to or in connection with any
Environmental Laws is pending or threatened against the Borrower or any of its
Subsidiaries, any real property in which the Borrower or any such Subsidiary
holds or, to the Borrower's knowledge, has held, an interest or any past or
present operation of the Borrower or any such Subsidiary, other than any such
proceedings that will not have a material adverse effect on the financial
condition, business, operations or prospects of the Borrower or the Borrower and
its Subsidiaries on a consolidated basis. Neither the Borrower nor any of its
Subsidiaries (i) is the subject of any federal or state investigation evaluating
-17-
whether any remedial action is needed to respond to a release of any Hazardous
Materials or other wastes into the environment, (ii) has received any notice of
any Hazardous Materials or other wastes in or upon any of its properties in
violation of any Environmental Laws, or (iii) knows of any basis for any such
investigation, notice or violation, except as disclosed to the Bank on Exhibit
D, and as to such matters disclosed on such Exhibit, none will have a material
adverse effect on the financial condition, business, operations or prospects of
the Borrower or the Borrower and its Subsidiaries on a consolidated basis.
SECTION V
AFFIRMATIVE COVENANTS
So long as the Bank has any commitment to lend hereunder or any Loan or
other Obligation hereunder remains outstanding, the Borrower covenants as
follows:
5.1. Financial Statements and other Reporting Requirements. The Borrower
shall furnish to the Bank:
(a) as soon as available to the Borrower, but in any event within 100
days after the end of each of its fiscal years, a consolidated balance sheet as
of the end of such year, and the related consolidated and consolidating
statements of income, changes in stockholders' equity and cash flow for such
year, audited and certified by Price Waterhouse (or other independent certified
public accountants of national standing selected by the Borrower);
(b) as soon as available to the Borrower, but in any event within 55
days after the end of each of its fiscal quarters, (i) the consolidated balance
sheet as of the end of such quarter, and a related consolidated statements of
income and cash flow for the period then ended, certified by the chief financial
officer of the Borrower but subject, however, to normal, recurring year-end
adjustments that shall not in the aggregate be material in amount, and (ii) a
Call Report for the Borrower (on a parent only basis) and for each of the
Borrower's banking subsidiaries for the period then ended, certified by the
cashier or other authorized officer of each such Subsidiary, in the forms
required to be filed by the Borrower and each such Subsidiary by the FFIEC;
(c) concurrently with the delivery of each financial statement pursuant
to subsections (a) and (b) of this Section 5.1, a report in substantially the
form of Exhibit F hereto signed on behalf of the Borrower by its chief financial
officer;
(d) promptly after the same are available, copies of all proxy
statements, financial statements and reports as the Borrower shall send to its
stockholders or as the Borrower may file with the Securities and Exchange
Commission;
-18-
(e) if and when the Borrower gives or is required to give notice to the
PBGC of any "Reportable Event" (as defined in Section 4043 of ERISA) with
respect to any Plan that might constitute grounds for a termination of such Plan
under Title IV of ERISA, or knows that any member of the Controlled Group or the
plan administrator of any Plan has given or is required to give notice of any
such Reportable Event, a copy of the notice of such Reportable Event given or
required to be given to the PBGC;
(f) immediately upon becoming aware of the existence of any condition or
event that constitutes a Default, written notice thereof specifying the nature
and duration thereof and the action being or proposed to be taken with respect
thereto;
(g) promptly upon becoming aware of any litigation or of any
investigative proceedings by a governmental agency or authority commenced or
threatened against the Borrower or any of its Subsidiaries, the outcome of which
would or might, in the opinion of counsel for the Borrower, have a materially
adverse effect on the assets, business or prospects of the Borrower or the
Borrower and its Subsidiaries on a consolidated basis, written notice thereof
and the action being or proposed to be taken with respect thereto;
(h) promptly upon becoming aware of any investigative proceedings by a
governmental agency or authority commenced or threatened against the Borrower or
any of its Subsidiaries regarding any potential violation of Environmental Laws
or any spill, release, discharge or disposal of any Hazardous Material, the
outcome of which would or might, in the opinion of counsel for the Borrower,
have a materially adverse effect on the assets, business or prospects of the
Borrower or the Borrower and its Subsidiaries on a consolidated basis, written
notice thereof and the action being or proposed to be taken with respect
thereto; and
(i) from time to time, such other financial data and information about
the Borrower or its Subsidiaries as the Bank may reasonably request.
5.2. Conduct of Business. Each of the Borrower and its Subsidiaries
shall:
(a) duly observe and comply in all material respects with all applicable
laws and valid requirements of any governmental authorities relative to its
corporate existence, rights and franchises, to the conduct of its business and
to its property and assets (including without limitation all Environmental Laws
and ERISA), and shall maintain and keep in full force and effect all licenses
and permits necessary in any material respect to the proper conduct of its
business; and
(b) maintain its corporate existence; and
(c) engage only in business activities permitted for bank holding
companies and their subsidiaries under applicable law.
-19-
5.3. Maintenance and Insurance. Each of the Borrower and its Material
Subsidiaries shall maintain its properties in good repair, working order and
condition as required for the normal conduct of its business, and shall at all
times maintain liability and casualty insurance with financially sound and
reputable insurers in such amounts as the officers of the Borrower in the
exercise of their reasonable judgment deem to be adequate.
5.4. Taxes. The Borrower shall pay or cause to be paid all taxes,
assessments or governmental charges on or against it or any of its Subsidiaries
or its or their properties on or prior to the time when they become due;
provided that this covenant shall not apply to any tax, assessment or charge
that is being contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been established and are being
maintained in accordance with generally accepted accounting principles.
5.5. Inspection by the Bank. The Borrower shall permit the Bank or its
designees, at reasonable times and upon reasonable notice (or if a Default shall
have occurred and is continuing, at any time and without prior notice), to (i)
visit and inspect the properties of the Borrower and its Material Subsidiaries,
(ii) examine and make copies of and take abstracts from the books and records of
the Borrower and its Material Subsidiaries, and (iii) discuss the affairs,
finances and accounts of the Borrower and its Material Subsidiaries with their
appropriate officers, employees and accountants. In handling such information
the Bank shall exercise the same degree of care that it exercises with respect
to its own proprietary information of the same types to maintain the
confidentiality of any non-public information thereby received or received
pursuant to this Agreement except that disclosure of such information may be
made (i) to the subsidiaries or affiliates of the Bank in connection with their
present or prospective business relations with the Borrower, subject to the same
degree of care and confidentiality required of the Bank by this Section 5.5,
(ii) to prospective permitted transferees or purchasers of an interest in the
Loans, (iii) as required by law, regulation, rule or order, subpoena, judicial
order or similar order and (iv) as may be required in connection with the
examination, audit or similar investigation of the Bank.
5.6. Maintenance of Books and Records. Each of the Borrower and its
Subsidiaries shall keep adequate books and records of account, in which true and
complete entries will be made reflecting all of its business and financial
transactions, and such entries will be made in accordance with generally
accepted accounting principles or regulatory accounting principles, as
applicable, consistently applied and applicable law.
5.7. Further Assurances. At any time and from time to time the Borrower
shall, and shall cause each of its Subsidiaries to, execute and deliver such
further instruments and take such further action as may reasonably be requested
by the Bank to effect the purposes of this Agreement and the Note.
-20-
SECTION VI
NEGATIVE COVENANTS
So long as the Bank has any commitment to lend hereunder or any Loan or
other Obligation hereunder remains outstanding, the Borrower covenants as
follows:
6.1. Encumbrances. Neither the Borrower nor any of its Material
Subsidiaries shall create, incur, assume or suffer to exist any mortgage,
pledge, security interest, lien or other charge or encumbrance, including the
lien or retained security title of a conditional vendor upon or with respect to
any of its property or assets ("Encumbrances"), or assign or otherwise convey
any right to receive income, including the sale or discount of accounts
receivable with or without recourse, except the following ("Permitted
Encumbrances"):
(a) Encumbrances in favor of the Bank or any of its affiliates;
(b) Encumbrances existing as of the date of this Agreement and disclosed
in Exhibit C hereto;
(c) liens for taxes, fees, assessments and other governmental charges to
the extent that payment of the same may be postponed or is not required in
accordance with the provisions of Section 5.4;
(d) landlords' and lessors' liens in respect of rent not in default or
liens in respect of pledges or deposits under workmen's compensation,
unemployment insurance, social security laws, or similar legislation (other than
ERISA) or in connection with appeal and similar bonds incidental to litigation;
mechanics', laborers' and materialmen's and similar liens, if the obligations
secured by such liens are not then delinquent; liens securing the performance of
bids, tenders, contracts (other than for the payment of money); and statutory
obligations incidental to the conduct of its business and that do not in the
aggregate materially detract from the value of its property or materially impair
the use thereof in the operation of its business;
(e) judgment and other similar liens arising in connection with court
proceedings, provided that the execution or other enforcement of such judgment
or similar lien is effectively stayed and the claims secured thereby are being
actively contested in good faith and by appropriate proceedings;
(f) rights of lessors under capitalized leases;
(g) Encumbrances securing indebtedness for borrowed money incurred in
connection with the purchase of real or personal property used in its business ,
provided that any such Encumbrances shall not extend to assets of the Borrower
or any such Subsidiary not financed by such indebtedness;
-21-
(h) easements, rights of way, restrictions and other similar charges or
Encumbrances relating to real or personal property and not interfering in a
material way with the ordinary conduct of its business;
(i) Encumbrances on its assets created in connection with the
refinancing of indebtedness secured by Permitted Encumbrances on such assets,
provided that the amount of indebtedness secured by any such Encumbrance shall
not be increased as a result of such refinancing and no such Encumbrance shall
extend to property and assets of the Borrower or any such Subsidiary not
encumbered prior to any such refinancing;
(j) Encumbrances incurred in connection with repurchase agreements;
liens incurred in connection with asset securitizations; Encumbrances granted to
a Federal Reserve Bank or a Federal Home Loan Bank to secure advances or other
transactions incidental to the conduct of the banking business of the Borrower
or any such Subsidiary, including loans to meet liquidity requirements;
(k) Encumbrances securing obligations of a Subsidiary to the Borrower or
another Subsidiary; and
(l) other Encumbrances which are incidental to the conduct of its
business on an ongoing basis and that do not in the aggregate have a material
adverse effect on its assets, business or prospects.
6.2. Merger; Consolidation; Sale or Lease of Assets. The Borrower shall
not sell or otherwise dispose of all or any substantial part of its shares of
the capital stock of Manufacturers and Traders Trust Company, M&T Bank, National
Association, The East New York Savings Bank or M&T Real Estate, Inc.; neither
the Borrower nor any of its Material Subsidiaries shall sell, lease or otherwise
dispose of all or any substantial portion of any other assets other than in the
ordinary course of business, or liquidate, merge or consolidate with any other
person or entity; provided that the Borrower may merge or consolidate into or
with another person or entity if no Default has occurred and is continuing or
would result from such merger or consolidation and if the Borrower is the
surviving company; and provided, further, that any Subsidiary of the Borrower
may merge or consolidate into or with (i) the Borrower if the Borrower is the
surviving company, or (ii) any other Subsidiary of the Borrower; and provided,
further, that any Subsidiary that is not a Material Subsidiary may be
liquidated, merged or consolidated into or with another person or entity if the
assets of such Subsidiary do not represent more than 10% of the consolidated
total assets of the Borrower.
6.3. Stock of Subsidiaries. The Borrower shall not permit any of its
Material Subsidiaries to issue any additional shares of its capital stock or
other equity securities which contain general voting powers, any options
therefor or any securities convertible thereto other than to the Borrower or
another Material Subsidiary. Neither the Borrower nor any of its Material
Subsidiaries shall sell, transfer or
-22-
otherwise dispose of any of the capital stock or other equity securities of a
Material Subsidiary which contain general voting powers, except (i) to the
Borrower or any of its wholly-owned Subsidiaries, (ii) in connection with a
transaction permitted by Section 6.2 ; (iii) to an officer, employee or director
of the Borrower or any Material Subsidiary; or (iv) to other persons or
entities, provided that such dispositions do not constitute more than 5% of the
total number of shares of capital stock or other equity securities outstanding
of such Subsidiary which contain general voting powers.
6.4. Investments. Neither the Borrower nor any of its Material
Subsidiaries shall make or maintain any Investments other than (i) investments
permitted by applicable banking laws, regulations or regulatory pronouncements;
(ii) existing Investments in Subsidiaries and new Investments in such
Subsidiaries in the ordinary course of its business; and (iii) acquisitions of
new Subsidiaries permitted by Section 6.5.
6.5. Acquisitions. Neither the Borrower nor any of its Material
Subsidiaries shall acquire all or a majority of the voting shares or all or a
substantial portion of the assets of any person or entity unless (i) the
consolidated total assets of the Borrower (as would be reported in the
Borrower's financial statements prepared in accordance with FFIEC requirements)
before giving effect to such acquisition would constitute at least 70% of the
consolidated total assets of the Borrower after giving effect to such
acquisition or (ii) the consolidated total assets of the Borrower before giving
effect to such acquisition would constitute less than 70% but at least 50% of
the consolidated total assets of the Borrower and the Borrower is able to
demonstrate to the Bank's reasonable satisfaction that the consolidated total
assets of the Borrower before giving effect to such acquisition would constitute
at least 70% of the consolidated total assets of the Borrower within six months
after giving effect to such acquisition..
6.6. ERISA. Neither the Borrower nor any member of the Controlled Group
shall permit any Plan maintained by it to (i) engage in any "prohibited
transaction" (as defined in Section 4975 of the Code, (ii) incur any
"accumulated funding deficiency" (as defined in Section 302 of ERISA) whether or
not waived, or (iii) terminate any Plan in a manner that could result in the
imposition of a lien or encumbrance on the assets of the Borrower or any of its
Subsidiaries pursuant to Section 4068 of ERISA.
6.7. Double Leverage Ratio. The Borrower shall not permit its Double
Leverage Ratio to be greater than 1.25 to 1.0. As used in this Section 6.6,
"Double Leverage Ratio" means the ratio of (i) the amount of equity Investments
of the Borrower in its Subsidiaries to (ii) the consolidated stockholders'
equity of the Borrower, in each case as reported in the Borrower's financial
statements prepared in accordance with FFIEC requirements.
6.8. Nonperforming Asset Coverage Ratio. The Borrower shall not permit
its Nonperforming Asset Coverage Ratio to be less than 5.0 to 1.0. As used in
this Section 6.7,
-23-
"Nonperforming Asset Coverage Ratio" means the ratio of (i) consolidated
stockholders' equity of the Borrower and its Subsidiaries plus Loan Loss
Reserves to (ii) Nonperforming Assets; "Loan Loss Reserves" means the loan loss
reserves and allocated transfer risk reserves of the Borrower, as shown on the
financial statements of the Borrower prepared in accordance with FFIEC
requirements; and "Nonperforming Assets" means the loans, leases and other
assets of the Borrower that are not accruing interest or are 90 days or more
past due in the payment of principal or interest, plus "other real estate owned"
by the Borrower, in each case as shown on the financial statements of the
Borrower prepared in accordance with FFIEC requirements.
6.9. Adequate Capitalization of Banking Subsidiaries. The Borrower shall
not permit any of its banking Subsidiaries to be less than "Adequately
Capitalized", as such term is defined in Appendix A to Regulation H of the Board
of Governors of the Federal Reserve System, 12 C.F.R. 208, as amended.
6.10. Minimum Tangible Net Worth. The Borrower shall not permit its
Tangible Net Worth to be less than the sum of (i) $635,000,000 plus (ii) 35% of
consolidated net income of the Borrower and its Subsidiaries for each fiscal
quarter ending after June 30, 1995 (without giving effect to any net loss in any
fiscal quarter) plus (iii) 100% of the net cash proceeds received by the
Borrower from the sale of its equity securities after June 30, 1995. As used in
this Section 6.9, "Tangible Net Worth" means the consolidated net worth of the
Borrower and its Subsidiaries minus any amounts attributable to those assets
which are required to be deducted from "tier 1 capital" in accordance with
Section II.B.1 of Appendix A to Regulation Y of the Board of Governors of the
Federal Reserve System, 12 C.F.R. 225, as amended.
SECTION VII
DEFAULTS
7.1. Events of Default. There shall be an Event of Default hereunder if
any of the following events occurs:
(a) the Borrower shall fail to pay when due (i) any amount of principal
of any Loans, or (ii) any amount of interest thereon or any fees or expenses
payable hereunder or under the Note within five days of the due date therefor;
or
(b) The Borrower shall fail to perform any term, covenant or agreement
contained in Sections 5.1(f), 5.5, 6.2, 6.3, 6.5 or 6.7 through 6.10; or
(c) the Borrower shall fail to perform any covenant contained in
Sections 5.1(e), 5.1(g), 5.1(h), 5.2, 6.1, 6.4 or 6.6 and such failure shall
continue for 30 days; or
-24-
(d) the Borrower shall fail to perform any term, covenant or agreement
(other than in respect of subsections 7.1(a) through (c) hereof) contained in
this Agreement and such default shall continue for 30 days after notice thereof
has been sent to the Borrower by the Bank; or
(e) any representation or warranty of the Borrower made in this
Agreement or in the Note or any other documents or agreements executed in
connection with the transactions contemplated by this Agreement or in any
certificate delivered hereunder shall prove to have been false in any material
respect upon the date when made or deemed to have been made; or
(f) there shall occur any material adverse change in the assets,
liabilities, financial condition, business or prospects of the Borrower or the
Borrower and its Subsidiaries, taken as a whole, as determined by the Bank
acting in good faith; or
(g) the Borrower or any of its Material Subsidiaries shall fail to pay
at maturity, or within any applicable period of grace, any indebtedness in
excess of $10,000,000 in the aggregate for borrowed money or for the use of real
or personal property, or fail to observe or perform any term, covenant or
agreement evidencing or securing such indebtedness, or relating to such use of
real or personal property, the result of which failure is to permit the holder
or holders of such obligations to cause such indebtedness to become due prior to
its stated maturity upon delivery of required notice, if any; or
(h) the Borrower or any of its Material Subsidiaries shall (i) apply for
or consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee, liquidator or similar official of itself or of all or a
substantial part of its property, (ii) be generally not paying its debts as such
debts become due, (iii) make a general assignment for the benefit of its
creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code (as
now or hereafter in effect), (v) take any action or commence any case or
proceeding under any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts, or any other law providing for
the relief of debtors, (vi) fail to contest in a timely or appropriate manner,
or acquiesce in writing to, any petition filed against it in an involuntary case
under the Federal Bankruptcy Code or other law, (vii) take any action under the
laws of its jurisdiction of incorporation or organization similar to any of the
foregoing, or (viii) take any corporate action for the purpose of effecting any
of the foregoing; or
(i) a proceeding or case shall be commenced, without the application or
consent of the Borrower or any of its Material Subsidiaries in any court of
competent jurisdiction, seeking (i) the liquidation, reorganization,
dissolution, winding up, or composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of it or
of all or any substantial part of its assets, or (iii) similar relief in respect
of it, under any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts or any other law providing for
the relief of debtors, and such proceeding or case shall continue undismissed,
or unstayed and in effect, for a
-25-
period of 30 days; or an order for relief shall be entered in an involuntary
case under the Federal Bankruptcy Code, against the Borrower or such Subsidiary;
or action under the laws of the jurisdiction of incorporation or organization of
the Borrower or any of its Material Subsidiaries similar to any of the foregoing
shall be taken with respect to the Borrower or such Subsidiary and shall
continue unstayed and in effect for any period of 30 days; or
(j) a judgment or order for the payment of money shall be entered
against the Borrower or any of its Subsidiaries by any court, or a warrant of
attachment or execution or similar process shall be issued or levied against
property of the Borrower or such Subsidiary, that in the aggregate exceeds
$10,000,000 in value and such judgment, order, warrant or process shall continue
undischarged or unstayed for 30 days; or
(k) the Borrower or any member of the Controlled Group shall fail to pay
when due an amount or amounts aggregating in excess of $10,000,000 that it shall
have become liable to pay to the PBGC or to a Plan under Title IV of ERISA; or
notice of intent to terminate a Plan or Plans shall be filed under Title IV of
ERISA by the Borrower, any member of the Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate or to cause a trustee to be
appointed to administer any such Plan or Plans or a proceeding shall be
instituted by a fiduciary of any such Plan or Plans against the Borrower and
such proceedings shall not have been dismissed within 30 days thereafter; or a
condition shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any such Plan or Plans must be terminated; or
(l) any banking Subsidiary shall cease to be insured under the Federal
Deposit Insurance Act and any rules and regulations issued thereunder, as from
time to time supplemented or amended; or a cease and desist order shall be
issued against the Borrower or any banking Subsidiary pursuant to 12 U.S.C.
1818(b) or (c) or any similar applicable provision of state law and any rules
and regulations issued thereunder, as from time to time supplemented or amended;
or
(m) the acquisition by any person or entity, or two or more persons or
entities acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 20% or more of the outstanding shares of voting stock of the
Borrower; provided that this provision shall not apply to acquisitions of
beneficial ownership by any director, officer, employee or employee benefit plan
of the Borrower or any Subsidiary, nor to any of the foregoing who act in
concert with any other person or entity.
7.2. Remedies. Upon the occurrence of an Event of Default described in
subsections 7.1(h) and (i), immediately and automatically, and upon the
occurrence of any other Event of Default, at any time thereafter while such
Event of Default is continuing, at the Bank's option and upon the Bank's
declaration:
-26-
(a) the Bank's commitment to make any further Loans hereunder shall
terminate;
(b) the unpaid principal amount of the Loans together with accrued
interest and all other Obligations hereunder shall become immediately due and
payable without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived; and
(c) the Bank may exercise any and all rights it has under this
Agreement, the Note or any other documents or agreements executed in connection
herewith, or at law or in equity, and proceed to protect and enforce the Bank's
rights by any action at law, in equity or other appropriate proceeding.
SECTION VIII
MISCELLANEOUS
8.1. Notices. Unless otherwise specified herein, all notices hereunder
to any party hereto shall be in writing and shall be deemed to have been given
when (i) delivered by hand, (ii) properly deposited in the mails postage
prepaid, (iii) sent by telex, answerback received, or electronic facsimile
transmission, or (iv) delivered to the telegraph company or overnight courier,
in each case addressed to such party at its address indicated below:
If to the Borrower, at
FIRST EMPIRE STATE CORPORATION
One M&T Plaza
Buffalo, New York 14240
Attention: Xxxx Xxxx, Senior Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Bank, at
THE FIRST NATIONAL BANK OF BOSTON
000 Xxxxxxx Xxxxxx XX 00-00-00
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx, Vice President
Telephone (000) 000-0000
Facsimile: (000) 000-0000
or at any other address specified by such party in writing.
-27-
8.2. Expenses. The Borrower will pay on demand up to $5,000 of
reasonably allocated costs of the Bank's in-house legal counsel in connection
with the preparation of this Agreement, the Note or any other documents or
agreements executed in connection therewith. The Borrower will also pay on
demand the reasonable expenses of the Bank in connection with the waiver or
amendment of this Agreement, the Note or any other documents or agreements
executed in connection therewith, or the administration, default or collection
of the Loans or other Obligations or in connection with the Bank's exercise,
preservation or enforcement of any of its rights, remedies or options
thereunder, including, without limitation, fees and expenses of outside legal
counsel or the allocated costs of in-house legal counsel, accounting,
consulting, brokerage or other similar professional fees or expenses, and any
fees or expenses associated with any travel or other costs relating to any
appraisals or examinations conducted in connection with the Obligations.
8.3. Set-Off. (a) Regardless of the adequacy of any collateral or other
means of obtaining repayment of the Obligations, any deposits, balances or other
sums credited by or due from the head office of the Bank or any of its branch
offices to the Borrower may, to the extent permitted by law, at any time and
from time to time after the occurrence of an Event of Default hereunder, without
notice to the Borrower or compliance with any other condition precedent now or
hereafter imposed by statute, rule of law, or otherwise (all of which are hereby
expressly waived) be set off, appropriated, and applied by the Bank against any
and all Obligations of the Borrower to the Bank in such manner as the head
office of the Bank or any of its branch offices in their sole discretion may
determine, and the Borrower hereby grants the Bank a continuing security
interest in such deposits, balances or other sums for the payment and
performance of all such Obligations.
(b) In the event that the Bank is placed in receivership or enters a
similar proceeding, the Borrower may, to the extent permitted by law, make any
payment due to the Bank hereunder to the extent of finally collected
unrestricted deposits of the Borrower held by the Bank, by giving notice to the
Bank to apply such deposits to such Obligations. If the amount of such deposits
is insufficient to pay such Obligations in full, the Borrower shall pay the
balance of such deficiency in accordance with this Agreement.
8.4. Term of Agreement. This Agreement shall continue in full force and
effect so long as the Bank has any commitment to make Loans hereunder or any
Loan or any Obligation hereunder shall be outstanding.
8.5. No Waivers. No failure or delay by the Bank in exercising any
right, power or privilege hereunder or under the Note or under any other
documents or agreements executed in connection herewith 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
-28-
remedies provided herein and in the Note and such other documents and agreements
are cumulative and not exclusive of any rights or remedies otherwise provided by
agreement or law.
8.6. Governing Law. This Agreement and the Note shall be deemed to be
contracts made under seal and shall be construed in accordance with and governed
by the laws of The Commonwealth of Massachusetts (without giving effect to any
conflicts of laws provisions contained therein).
8.7. Amendments. Neither this Agreement nor the Note nor any provision
hereof or thereof may be amended, waived, discharged or terminated except by a
written instrument signed by the Bank and, in the case of amendments, by the
Borrower.
8.8. Binding Effect of Agreement. This Agreement shall be binding upon
and inure to the benefit of the Borrower and the Bank and their respective
successors and assigns; provided that the Borrower may not assign or transfer
its rights or obligations hereunder. The Bank may sell or transfer its interests
hereunder and under the Note with the prior written consent of the Borrower, or
grant participations therein to participants not previously identified to the
Bank in writing as impermissible transferees, without such consent. In the case
of any such participation, the Borrower agrees that any such participant shall
be entitled to the benefits of Sections 2.8, 2.9, 2.13 and 8.3 to the same
extent as if such transferee or participant were the Bank hereunder, but only if
the Bank would then be entitled to such benefits; provided the Borrower may, for
all purposes of this Agreement, treat the Bank as the person entitled to
exercise all rights hereunder and under the Note and to receive all payments
with respect thereto.
8.9. Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument.
8.10. Partial Invalidity. The invalidity or unenforceability of any one
or more phrases, clauses or sections of this Agreement shall not affect the
validity or enforceability of the remaining portions of it.
8.11. Captions. The captions and headings of the various sections and
subsections of this Agreement are provided for convenience only and shall not be
construed to modify the meaning of such sections or subsections.
8.12. WAIVER OF JURY TRIAL. THE BANK AND THE COMPANY AGREE THAT NEITHER
OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A) SEEK A JURY TRIAL IN ANY
LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER ACTION BASED UPON, OR ARISING OUT
OF, THIS AGREEMENT, THE NOTE, ANY RELATED DOCUMENTS OR AGREEMENTS OR THE
DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG ANY OF
-29-
THEM, OR (B) SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH
A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. NEITHER THE BANK NOR THE COMPANY
HAS AGREED WITH OR REPRESENTED TO THE OTHER THAT THE PROVISIONS OF THIS
PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
8.13. Entire Agreement. This Agreement, the Note and the documents and
agreements executed in connection herewith constitute the final agreement of the
parties hereto and supersede any prior agreement or understanding, written or
oral, with respect to the matters contained herein and therein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
FIRST EMPIRE STATE CORPORATION
By /s/ Xxxx X. Xxxx
--------------------------------
Senior Vice President
THE FIRST NATIONAL BANK OF BOSTON
By /s/ Xxxx X. Xxxxxxxx
--------------------------------
Vice President
EXHIBIT A
FIRST EMPIRE STATE CORPORATION
PROMISSORY NOTE
November 24, 1995
$25,000,000.00 Boston, Massachusetts
For value received, the undersigned hereby promises to pay to THE FIRST
NATIONAL BANK OF BOSTON (the "Bank"), or order, at the head office of the Bank
at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, in lawful money of the
United States of America and in immediately available funds, the principal
amount of TWENTY FIVE MILLION and no/100 DOLLARS ($25,000,000) or such lesser
amount as shall equal the principal amount outstanding on the Termination Date
referred to in the below-mentioned Credit Agreement, and to pay interest on the
unpaid principal balance hereof from time to time outstanding, at said office
and in like money and funds, for the period commencing on the date hereof until
paid in full, at the rates per annum and on the dates provided in the Credit
Agreement. All principal remaining unpaid and any accrued but unpaid interest
shall in any event be due and payable on the Termination Date.
This Note is issued pursuant to, and entitled to the benefits of, and is
subject to, the provisions of a certain Revolving Credit Agreement dated as of
November 24, 1995 by and between the undersigned and the Bank (herein, as the
same may from time to time be amended or extended, referred to as the "Credit
Agreement"), but neither this reference to the Credit Agreement nor any
provision thereof shall affect or impair the absolute and unconditional
obligation of the undersigned maker of this Note to pay the principal of and
interest on this Note as herein provided.
In case an Event of Default (as defined in the Credit Agreement) shall
occur, the aggregate unpaid principal of and accrued interest on this Note shall
become or may be declared to be due and payable in the manner and with the
effect provided in the Credit Agreement.
The undersigned may at its option prepay all or any part of the principal
of this Note before maturity upon the terms provided in the Credit Agreement.
The undersigned maker hereby waives presentment, demand, notice of
dishonor, protest and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note.
(i)
This instrument shall have the effect of an instrument executed under seal
and shall be governed by and construed in accordance with the laws of The
Commonwealth of Massachusetts (without giving effect to any conflicts of laws
provisions contained therein).
FIRST EMPIRE STATE CORPORATION
By: /s/ Xxxx X. Xxxx
--------------------------------
Senior Vice President
(ii)
SCHEDULE I TO PROMISSORY NOTE
TYPE OF LOAN
AMOUNT EURODOLLAR INTEREST INTEREST AMOUNT NOTATION
DATE OF LOAN OR BASE RATE RATE* PERIOD** PAID MADE BY
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(1)
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* For Base Rate Loans, insert "Base Rate"
** For Eurodollar Loans only
(2)
EXHIBIT B
FIRST EMPIRE STATE CORPORATION
The First National Bank of Boston
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention:
Re: Revolving Credit Agreement dated as of November 24, 1995
Gentlemen:
We refer to the Revolving Credit Agreement dated as of November 24, 1995
(the "Credit Agreement") between First Empire State Corporation and The First
National Bank of Boston. Capitalized terms used herein without definition are
used as defined in the Credit Agreement.
Pursuant to Section 2.2 of the Credit Agreement, the undersigned hereby
confirms its request made on _______________, 19__ for a [Base Rate]
[Eurodollar] Loan in the amount of $_____________ on ______________, 199_.
[The Interest Period applicable to said Loan will be [one] [two] [three]
[six] months days.]*
[Said Loan represents a conversion of the [Base Rate] [Eurodollar] Loan in
the same amount made on _________________.]**
Please disburse the proceeds of said Loan in immediately available funds
to Account No. ________ at _____________.
The representations and warranties contained or referred to in Section IV
of the Credit Agreement are true and accurate on and as of the effective date of
the Loan as though made at and as of such date (except to the extent that such
representations and warranties expressly relate to an earlier date); and no
Default has occurred and is continuing or will result from the Loan.
FIRST EMPIRE STATE CORPORATION
-----------------------------------
Title:
--------------------------
Date
--------------------------
* To be inserted in any request for a Eurodollar Loan.
** To be inserted in any request for a conversion.
(1)
EXHIBIT C
FIRST EMPIRE STATE CORPORATION
ENCUMBRANCES
[None]
(1)
EXHIBIT D
FIRST EMPIRE STATE CORPORATION
LITIGATION; ENVIRONMENTAL MATTERS
[None]
(1)
EXHIBIT E
FIRST EMPIRE STATE CORPORATION
MATERIAL SUBSIDIARIES
Manufacturers and Traders Trust Company
M&T Bank, National Association
The East New York Savings Bank
CASH & GO, Inc.
Highland Lease Corporation
M&T Capital Corporation
M&T Credit Corporation
M&T Financial Corporation
M&T Mortgage Corporation
M&T Real Estate, Inc.
M&T Securities, Inc.
(1)
-1-
EXHIBIT F
FIRST EMPIRE STATE CORPORATION
REPORT OF CHIEF FINANCIAL OFFICER
FIRST EMPIRE CORPORATION (the "Borrower") HEREBY CERTIFIES that:
This Report is furnished pursuant to Section 5.1(d) of the Revolving
Credit Agreement dated as of November 24, 1995 the "Credit Agreement") between
the Borrower and THE FIRST NATIONAL BANK OF BOSTON. Unless otherwise defined
herein, the terms used in this Report have the meanings given to them in the
Credit Agreement.
As required by Section 5.1(a) and (b) of the Credit Agreement, the
consolidated financial statements of the Borrower and its Subsidiaries for the
[year/quarter] ended ____________, 19__ (the "Financial Statements"), prepared
in accordance with generally accepted accounting principles consistently
applied, accompany this Report. The Financial Statements present fairly the
consolidated financial position of the Borrower and its Subsidiaries as at the
date thereof and the consolidated results of operations of the Borrower and its
Subsidiaries for the period covered thereby (subject only to normal recurring
year-end adjustments which will not in the aggregate be material in amount).
The figures set forth in Schedule A for determining compliance by the
Borrower with the financial covenants contained in the Credit Agreement are true
and complete as of the date hereof.
The activities of the Borrower and its Subsidiaries during the period
covered by the Financial Statements have been reviewed by the Chief Financial
Officer or by employees or agents under his immediate supervision. Based on such
review, to the best knowledge and belief of the Chief Financial Officer, and as
of the date of this Report, no Default has occurred.*
WITNESS my hand this ____ day of ___________, 19__.
FIRST EMPIRE STATE CORPORATION
By: ________________________________
Chief Financial Officer
-------------------
* If a Default has occurred, this paragraph is to be modified with an
appropriate statement as to the nature thereof, the period of existence
thereof and what action the Borrower has taken, is taking, or proposes to
take with respect thereto.
(1)
SCHEDULE A
to
EXHIBIT F
FINANCIAL COVENANTS
Double Leverage Ratio (Section 6.7)
MAXIMUM PERMITTED: 1.25 : 1.00
==== ====
ACTUAL:
(i) Consolidated equity Investments in $___________
Subsidiaries
(ii) Consolidated stockholders' equity $___________
(iii) Double Leverage Ratio: line (i)
divided by line (ii) : 1.00
==== ====
Nonperforming Asset Coverage Ratio (Section 6.8)
MINIMUM REQUIRED: 5.0 : 1.00
==== ====
ACTUAL:
(i) Consolidated stockholders' equity $___________
(ii) Loan loss reserves $___________
(iii) Non accrual and other past due loans and
leases $___________
(iv) Other real estate owned $___________
(v) Nonperforming assets: line (iii)
plus line (iv) $
===========
(vi) Nonperforming Assets Coverage Ratio:
[line (i) plus line (ii)] divided by line (v) : 1.00
==== ====
- i -
Minimum Tangible Net Worth (Section 6.10)
REQUIRED:
(i) Beginning balance $635,000,000
(ii) Plus: 35% of consolidated net
income after 6/30/95 $___________
(iii) Plus: 100% of net cash proceeds
from sale of equity securities
after 6/30/95 $___________
(iv) Required Amount: line (i) plus line (ii) $
plus line (iii) ===========
ACTUAL:
(i) Consolidated stockholders' equity $___________
(ii) Less: Intangible assets ($___________)
(iii) Total Tangible Net Worth (line (i) minus
line (ii) $
============
WITNESS my hand this _______ day of ______________, 19__.
FIRST EMPIRE STATE CORPORATION
By: ________________________________
Chief Financial Officer
- ii -
EXHIBIT G
FORM OF OPINION OF COUNSEL TO THE COMPANY
November 24, 1995
The First National Bank of Boston
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
RE: Revolving Credit Agreement dated as of November 24, 1995 between
THE FIRST NATIONAL BANK OF BOSTON and FIRST EMPIRE STATE CORPORATION
Ladies and Gentlemen:
I am General Counsel of First Empire State Corporation (the "Borrower")
and have acted as its legal counsel in connection with the preparation,
execution and delivery of the Revolving Credit Agreement dated as of November
24, 1995 (the "Credit Agreement") between The First National Bank of Boston (the
"Bank") and the Borrower pursuant to which the Borrower has executed and
delivered to the Bank its Note in the principal amount of $25,000,000.00. All
terms defined in the Credit Agreement shall have the same meanings herein.
I have examined executed counterparts of the Credit Agreement and the Note
and originals, or copies, the authenticity of which has been established to my
satisfaction, of such other documents, corporate records, agreements and
instruments and certificates of public officials and officers of the Borrower as
I have deemed necessary as the basis for the opinions herein expressed.
Based on the foregoing and having regard for legal considerations as I
have deemed relevant, it is my opinion that:
1. The Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the State of New York, has all requisite
corporate power to own its property and conduct its business as now conducted
and is duly qualified and in good standing as a foreign corporation and duly
authorized to do business in each jurisdiction wherein the nature of its
properties or business requires such qualification, except where the failure to
be so qualified would not have a material adverse effect on its business,
financial condition, assets or properties taken as a whole.
The First National Bank of Boston
November 24, 1995
Page 2
2. The execution and delivery of the Credit Agreement and the Note and
performance by the Borrower of its obligations thereunder and of the
transactions contemplated thereby are within the corporate power and authority
of the Borrower, and have been authorized by proper corporate proceedings and do
not contravene any provision of law of the United States or its political
subdivisions or the Certificate of Incorporation or Bylaws of the Borrower, or,
to the best of my knowledge, contravene any provision of, or constitute an event
of default or event which, with the lapse of time or the giving of notice, or
both, would constitute an event of default under, any other agreement,
instrument or undertaking binding on the Borrower.
3. The Credit Agreement and the Note have been duly executed and delivered
by the Borrower. Although I have made no independent inquiry with respect to the
matter, I know of no reason why the choice of law provisions of the Credit
Agreement and the Note, which set forth Massachusetts law as the governing law,
would not be enforced by the courts of the state of New York, as agreed upon by
the parties. However, if the law of the state of New York is deemed to be the
governing law, in whole or part, the Credit Agreement and the Note and all of
the terms and provisions thereof are the legal, valid and binding obligations of
the Borrower, enforceable in accordance with their respective terms except as
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting enforcement of creditors' rights generally, and except as the remedy
of specific performance or of injunctive relief is subject to the discretion of
the court before which any proceeding therefor may be brought.
4. The execution, delivery and performance of the Credit Agreement and the
Note and the transactions contemplated thereby do not require any approval or
consent of, or filing or registration with, any governmental or other agency or
authority, or any other party.
5. Except as set forth on Exhibit D to the Credit Agreement, there is no
litigation, proceeding or investigation pending, or, to the best of my knowledge
after due inquiry, threatened, against the Borrower or any Subsidiary which, if
adversely determined, could result in a judgment in excess of $10,000,000 which
is not adequately covered by insurance or as to which adequate reserves are not
being maintained or could otherwise have a material adverse effect on the
assets, business or prospects of the Borrower or any Subsidiary.
6. Each Material Subsidiary of the Borrower is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, has all requisite corporate power to own its
property and conduct its businesses as now conducted and is, to the best of my
knowledge, duly qualified and in good standing as a foreign corporation and is
duly authorized to do business in each jurisdiction where the nature of its
properties or businesses requires such qualification, except where the failure
to be so qualified would not have a material adverse effect on its business,
financial condition, assets or properties taken as a whole.
The First National Bank of Boston
November 24, 1995
Page 3
7. As of the date of the Credit Agreement, all the Material Subsidiaries
of the Borrower are listed on Exhibit E thereto. The Borrower is the record
holder of all of the issued and outstanding stock of each of its Material
Subsidiaries. All shares of such stock of Material Subsidiaries have been
validly issued and are fully paid and nonassessable, and no rights to subscribe
to any additional shares have been granted, and no options, warrants or similar
rights are outstanding.
8. Neither the Borrower nor any Material Subsidiary is subject to
regulation under the Investment Company Act of 1940, as amended, the Public
Utility Holding Company Act of 1935, as amended, or any other statute or
regulation that limits its ability to incur indebtedness for borrowed money.
9. I am aware of no state or local recording, franchise, stamp,
documentary or other taxes or governmental charges or assessments required to be
paid in connection with the execution, delivery, filing or recordation of, or as
a condition to the enforcement of, the Credit Agreement and the Note or any of
the transactions contemplated thereby.
Very truly yours,