EXHIBIT 10.7
LETTER OF CREDIT AGREEMENT
dated as of
January 2, 1997
among
▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life Insurance Company,
The Banks listed herein
and
▇▇▇▇▇▇ Guaranty Trust Company of New York,
as Issuing Bank and Agent
TABLE OF CONTENTS/1/
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.............................................. 2
-----------
ARTICLE II
THE LETTER OF CREDIT
SECTION 2.01. Issuance of Letter of Credit............................. 5
----------------------------
SECTION 2.02. Amount Available......................................... 6
----------------
SECTION 2.03. Reimbursement of Payments................................ 6
-------------------------
SECTION 2.04. Reimbursement Obligations Unconditional.................. 7
---------------------------------------
SECTION 2.05. Indemnification.......................................... 8
---------------
SECTION 2.06. Fees and Expenses........................................ 9
-----------------
SECTION 2.07. Increased Cost; Reduced Return; Substitute Bank.......... 10
-----------------------------------------------
SECTION 2.08. General Provisions as to Payments........................ 12
---------------------------------
ARTICLE III
CONDITIONS
SECTION 3.01. Letter of Credit Agreement Closing....................... 12
----------------------------------
SECTION 3.02. Issuance................................................. 13
--------
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Each Party............................................... 14
----------
SECTION 4.02. Issuing Bank............................................. 14
------------
ARTICLE V
_______________
/1/ The Table of Contents is not a part of this Agreement.
1
COVENANTS OF THE COMPANY
SECTION 5.01. First Loss.............................................. 15
----------
SECTION 5.02. Enforcement of Reinsurer's Obligations;
--------------------------------------
Assignment of Coinsurance Obligations................... 15
-------------------------------------
SECTION 5.03. Merger, Consolidation, Etc.............................. 16
--------------------------
ARTICLE VI
THE AGENT
SECTION 6.01. Appointment and Authorization........................... 17
-----------------------------
SECTION 6.02. Agent and Affiliates.................................... 17
--------------------
SECTION 6.03. Action by Agent......................................... 17
---------------
SECTION 6.04. Consultation with Experts............................... 17
-------------------------
SECTION 6.05. Liability of Agent...................................... 18
------------------
SECTION 6.06 Indemnification......................................... 18
---------------
SECTION 6.07 Credit Decision......................................... 18
---------------
SECTION 6.08 Successor Agent......................................... 18
---------------
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Notices................................................. 19
-------
SECTION 7.02. No Waivers.............................................. 19
----------
SECTION 7.03. Expenses................................................ 20
--------
SECTION 7.04. Sharing................................................. 20
-------
SECTION 7.05. Amendments and Waivers.................................. 20
----------------------
SECTION 7.06. Successors and Assigns.................................. 21
----------------------
SECTION 7.07. Governing Law; Submission to Jurisdiction............... 22
-----------------------------------------
SECTION 7.08. Counterparts; Integration; Effectiveness................ 22
----------------------------------------
SECTION 7.09. WAIVER OF JURY TRIAL.................................... 22
--------------------
Commitment Schedule
Exhibit A - Letter of Credit
Exhibit B - Opinion of Counsel for the Company
Exhibit C - Opinion of Counsel for the Issuing Bank
2
LETTER OF CREDIT AGREEMENT
LETTER OF CREDIT AGREEMENT dated as of January 2, 1997 between ▇▇▇▇
▇▇▇▇▇▇▇ MUTUAL LIFE INSURANCE COMPANY, a mutual life insurance company organized
under the laws of Massachusetts (together with its successors, the "Company"),
the BANKS party hereto and ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK, as issuing
bank (together with its successors, the "Issuing Bank"), and agent (together
with its successors in such capacity, the "Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company and WellPoint Health Networks Inc., a California
corporation ("WellPoint") and the indirect parent of Unicare Life & Health
Insurance Company, a stock life insurance company organized under the laws of
Delaware (the "Reinsurer"), have entered into a Purchase and Sale Agreement,
dated as of October 10, 1996 (as amended from time to time in accordance with
the terms thereof and hereof, the "Purchase Agreement"), which provides for the
sale by the Company to WellPoint of the "GBO Included Business" (as defined in
the Purchase Agreement);
WHEREAS, in connection with the Purchase Agreement, the Company and
the Reinsurer propose to enter into a Coinsurance Agreement, substantially in
the form of Annex B to the Purchase Agreement, pursuant to which the Company has
agreed to cede to the Reinsurer, and the Reinsurer has agreed to accept and
indemnity reinsure, on a 100% coinsurance basis, all of the Reserves and
Liabilities (as defined in the Coinsurance Agreement) arising under or with
respect to the Coinsured Policies (as defined in the Coinsurance Agreement) as
contemplated by the Purchase Agreement (as amended from time to time in
accordance with the terms thereof and hereof, the "Coinsurance Agreement");
WHEREAS, the Company has requested the Issuing Bank to agree to issue
a Letter of Credit (as defined below) in order to support payments to be made by
the Company in the event that the Reinsurer fails to make any payment with
respect to the Coinsured Policies pursuant to the Coinsurance Agreement; and
WHEREAS, the Issuing Bank is willing to enter into this Agreement only
if the Company and the Banks enter into this Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have
-----------
the following meanings:
"Agreement" means this Letter of Credit Agreement, as it may be
amended from time to time in accordance with Section 7.05.
"Amount Available" means (i) at any time after the issuance of the
Letter of Credit, the amount available thereunder and (ii) at any time at or
prior to the issuance of the Letter of Credit, the amount determined in
accordance with Section 2.02.
"Bank" means each bank listed in the Commitment Schedule and its
successors.
"Base Rate" means, for any day, a rate per annum equal to the higher
of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City or Wilmington, Delaware are authorized
or required by law to close.
"Coinsured Policies" has the meaning set forth in the Coinsurance
Agreement.
"Commitment Percentage" means as to each Bank the percentage set forth
opposite the name of such Bank in the Commitment Schedule.
"Contractual Obligation" as applied to any Person, means any provision
of any security issued by such Person or of any indenture, mortgage, deed of
trust, contract, undertaking, agreement or other instrument to which such
2
Person is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject.
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 7.08
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (i) if such day is not a Business Day, the
--------
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (ii) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate quoted to the
Agent.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Issuing Bank" has the meaning set forth in the introductory paragraph
hereof.
"Letter of Credit" means a letter of credit, substantially in the form
of Exhibit A hereto and completed in accordance with Section 2.01, issued
pursuant to this Agreement.
"Letter of Credit Agreement Closing Date" has the meaning set forth in
Section 3.01.
"Letter of Credit Liabilities" means, for any Bank and at any time,
such Bank's Commitment Percentage of the sum of (x) the amounts drawn under the
Letter of Credit and not reimbursed by the Company and (y) the amount then
available for drawing under the Letter of Credit.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
"Parent" means, with respect to any bank or trust company, any Person
controlling such bank or trust company.
3
"Participant" has the meaning set forth in Section 7.06(b).
"Permitted Assignee" means any Person into which the Company is merged
or consolidated, or to which all or substantially all of the assets of the
Company are conveyed, in each case in accordance with Section 5.03.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Prime Rate" means the rate of interest publicly announced by the
Agent in New York City from time to time as its Prime Rate.
"Purchase Closing Date" means the date of the closing under the
Purchase Agreement.
"Purchase Closing Deadline Date" has the meaning set forth in Section
2.01.
"Required Banks" means at any time Banks having Commitment Percentages
aggregating at least 66 2/3%.
"Requirement of Law" means, as to any Person, the certificate of
incorporation or equivalent and by-laws of such Person, and any law, treaty,
rule or regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Reserves and Liabilities" has the meaning set forth in the
Coinsurance Agreement.
"Subsidiary" means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by the Company.
"Termination Date" means (i) unless on or prior thereto the Letter of
Credit shall have been issued, the date on which the obligation of the Issuing
Bank to issue the Letter of Credit terminates in accordance with Section 2.01(b)
or Section 2.02(c) and (ii) if the Letter of Credit shall have been issued on or
prior to the date specified in clause (i), the date the Letter of Credit expires
in accordance with its terms.
4
"Transaction Documents" means the Purchase Agreement, the Coinsurance
Agreement and each other agreement entered into by the Company in connection
therewith.
ARTICLE II
THE LETTER OF CREDIT
SECTION 2.01. Issuance of Letter of Credit. (a) From and after the
----------------------------
Letter of Credit Agreement Closing Date, the Issuing Bank agrees, on the terms
and conditions hereinafter set forth, to issue the Letter of Credit to the
Company upon the request of the Company subject to the conditions set forth in
Article III. The Letter of Credit shall be dated its date of issuance, shall
have a stated expiry date of the fifth anniversary of the Purchase Closing Date
and shall be in an initial Amount Available determined pursuant to Section 2.02
as of the date of issuance, reducing thereafter in accordance with the schedule
specified in Section 2.02(a). Simultaneously with the issuance by the Issuing
Bank of the Letter of Credit, the Issuing Bank shall be deemed, as between the
Issuing Bank and each other Bank, without further action by any party hereto, to
have sold to each Bank, and each Bank shall be deemed, as between the Issuing
Bank and each other Bank, without further action by any party hereto, to have
purchased from the Issuing Bank, a participation in the Letter of Credit and the
related Letter of Credit Liabilities in an amount equal to such Bank's
Commitment Percentage of the Amount Available.
(b) The obligation of the Issuing Bank to issue the Letter of Credit
shall terminate on the fifth anniversary of the Purchase Closing Date; provided
--------
that if the Purchase Closing Date shall not have occurred by the Purchase
Closing Deadline Date, such obligation shall terminate on the Purchase Closing
Deadline Date. For this purpose, "Purchase Closing Deadline Date" means (i)
January 31, 1997 or (ii) if on or prior to the Purchase Closing Deadline Date
specified in clause (i) or previously specified pursuant to this clause (ii),
the Company notifies the Agent that the Company and WellPoint have agreed to
postpone the Purchase Closing Date to a date specified in such notice, the date
so specified; provided that in no event shall the Purchase Closing Deadline Date
--------
be later than March 29, 1997. The Company shall immediately notify the Agent,
which shall thereupon notify each Bank, of the occurrence of the Purchase
Closing Date, and such notice from the Agent shall be conclusive and binding on
all parties hereto.
5
SECTION 2.02. Amount Available. (a) The Amount Available shall
----------------
initially be $397,000,000. On each date set forth below prior to the issuance
of the Letter of Credit, unless previously reduced to the same or a lesser
amount pursuant to subsection (b) below, the Amount Available will be
automatically reduced immediately following the close of business on such date,
without requirement of notice or other action by any party, to the amount set
forth opposite such date:
Date Amount Available
---- ----------------
Third Anniversary of the
Purchase Closing Date $272,000,000
Fourth Anniversary of the
Purchase Closing Date $127,000,000
Fifth Anniversary of the
Purchase Closing Date $ 0
(b) Prior to the issuance of the Letter of Credit, upon at least
three Business Days' notice to the Agent, the Company may at any time or from
time to time at its option permanently reduce the Amount Available by a minimum
amount of $20,000,000 or, if the Amount Available is less than $20,000,000, by
such amount. The Agent shall promptly notify the Banks of any such notice
received by it.
(c) In the event the Amount Available is reduced to zero in
accordance with the foregoing provisions of this Section 2.02, the obligation of
the Issuing Bank to issue the Letter of Credit shall terminate on the effective
date of such reduction.
(d) Subsequent to the issuance of the Letter of Credit, the Amount
Available shall be subject to scheduled and optional reductions in accordance
with the terms of the Letter of Credit.
SECTION 2.03. Reimbursement of Payments. (a) Upon receipt of any
-------------------------
drawing under the Letter of Credit, the Issuing Bank shall promptly notify the
Agent and each other Bank as to the amount to be paid as a result of such
drawing and the payment date thereof. Each Bank will pay to the Agent, for the
account of the Issuing Bank, an amount equal to such
6
Bank's Commitment Percentage of the amount of such drawing on the date which is
the later of (i) the date of payment specified in such notice and (ii) the date
of the Issuing Bank's notice of such payment (or, if such notice is given after
12:00 Noon (New York City time) on any date, the next succeeding Business Day).
Any amount not paid by any Bank on the date specified in the preceding sentence
shall bear interest from and including such date to the date of payment by such
Bank of such amount at a rate of interest per annum equal to the Federal Funds
Rate (or, if such amount remains unpaid more than three Business Days, a rate
per annum equal to the Base Rate plus 2%). The Issuing Bank or the Agent, as the
case may be, will pay to each Bank its Commitment Percentage of all amounts
received pursuant to Section 5.02 for application in payment of its
reimbursement obligations in respect of the Letter of Credit, but only to the
extent such Bank has made payment to the Issuing Bank in respect of the Letter
of Credit pursuant hereto.
(b) The Company shall be obligated to reimburse the Issuing Bank for
amounts paid by it in respect of drawings under the Letter of Credit (together
with interest for each day from and including the date of such payment to but
not including the date reimbursement is made in full at a rate per annum equal
to the sum of the Base Rate for such day plus, for each such day more than three
months after the date of the related drawing, 2%) if and to the extent, and only
if and to the extent, the Company collects any amounts owed by the Reinsurer in
connection with its defaulted obligations under the Coinsurance Agreement.
SECTION 2.04. Reimbursement Obligations Unconditional. Subject to
---------------------------------------
and except, as to the Company, as otherwise provided in Section 2.03(b), the
reimbursement obligations of the Company and each Bank under this Agreement
shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement, under all circumstances
whatsoever, including without limitation the following circumstances:
(a) any lack of validity or enforceability of any Transaction
Document, or the loss or destruction of the Letter of Credit;
(b) any claim that any payment under the Letter of Credit was not
made pursuant to a valid or enforceable obligation of the Issuing Bank;
(c) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Transaction Document;
7
(d) the existence of any claim, set-off, defense or other rights that
the Company may have at any time against the Banks (including the Issuing
Bank) or any other Person, whether in connection with this Agreement, any
Transaction Document or any unrelated transactions;
(e) any statement or any other document presented under the Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever,
provided that the determination that documents presented under the Letter
--------
of Credit are not forged, fraudulent or invalid or any statement therein is
not untrue shall not have constituted gross negligence or willful
misconduct of the Issuing Bank;
(f) payment by the Issuing Bank under the Letter of Credit against
presentation of a draft or certificate that does not comply with the terms
of such Letter of Credit, provided that the determination that documents
--------
presented under the Letter of Credit comply with the terms thereof shall
not have constituted gross negligence or willful misconduct of the Issuing
Bank; or
(g) to the extent permitted by applicable law, any other act or
omission to act or delay of any kind by the Company, the Issuing Bank, any
other Bank or any other Person or any other event or circumstance
whatsoever that might, but for the provisions of this Section, constitute a
legal or equitable discharge of the Company's or any Bank's obligations
hereunder.
SECTION 2.05. Indemnification. (a) The Company agrees to indemnify
---------------
and hold harmless each Bank (including the Issuing Bank and the Agent in such
capacities) from and against any and all losses, claims, damages, liabilities,
reasonable costs, charges and expenses whatsoever that such Bank may incur (or
that may be claimed against such Bank by any Person whatsoever) by reason of or
in connection with (i) the existence of any claim, set-off, defense or other
right which the Reinsurer may have at any time against the Company in connection
with any claim by the Company against the Reinsurer seeking to enforce the
obligations of the Reinsurer pursuant to the Coinsurance Agreement (including,
without limitation, the absence of a claim of the Company against the Reinsurer
under the Coinsurance Agreement due to bad faith claims practices, willful
misconduct, fraud or gross negligence of the Company or its affiliates); (ii)
any invalidity or unenforceability relating to any claim of the Company against
the Reinsurer seeking to enforce the obligations of the Reinsurer pursuant to
the Coinsurance
8
Agreement; (iii) any failure by the Company to assert any claim or demand
against the Reinsurer, or to enforce the obligations of the Reinsurer, in
accordance with Section 5.02; (iv) any amendment, waiver or other modification
of the Coinsurance Agreement from the proposed form thereof delivered to each of
the Banks prior to the date of this Agreement, or any amendment, waiver or other
modification of any other Transaction Document to the extent the same adversely
affects the rights or obligations of such Bank hereunder or (v) otherwise in
connection with this Agreement or the Letter of Credit; provided that the
--------
Company shall not be required by virtue of this clause (v) to indemnify any Bank
for any claims, damages, losses, liabilities, reasonable costs or expenses to
the extent, but only to the extent, caused by (x) the willful misconduct or
gross negligence of any Bank, (y) the failure of the Issuing Bank or any other
Bank to perform its obligations hereunder and under the Letter of Credit or (z)
the failure of the Reinsurer to make timely payments under the Coinsurance
Agreement for any reason other than those specified in clauses (i) through (iii)
above.
(b) The parties intend that the Issuing Bank and the other Banks
shall assume, subject to Section 5.01, the credit risk of the Reinsurer, but
that the Company shall assume any risk associated with the legal validity or
enforceability of the payment obligations under the Coinsurance Agreement, and
the obligations of the Company under this Section 2.05 shall be so construed. In
the event of a dispute between the parties with respect to any claim pursuant to
Section 2.05, the parties agree to negotiate in good faith to seek a mutually
satisfactory determination of the extent to which a loss suffered by the Banks
for which indemnity is requested under this Section 2.05 is attributable to a
defect in the legal validity or enforceability of the payment obligations under
the Coinsurance Agreement assumed by the Company or the extent to which it is
attributable to the credit risk of the Reinsurer assumed by the Issuing Bank and
the other Banks.
SECTION 2.06. Fees and Expenses.
-----------------
(a) The Company shall pay to the Agent (i) for the account of each
Bank a letter of credit fee for each day from and including the Purchase Closing
Date to but excluding the Termination Date at the rate of 0.50% per annum on
such Bank's Commitment Percentage of the Amount Available and (ii) for the
account of the Issuing Bank a letter of credit fronting fee for each day from
and including the Purchase Closing Date to but excluding the Termination Date at
the rate per annum heretofore mutually agreed between the Company and the
Issuing Bank on the Amount Available. Accrued fees under this
9
paragraph (a) shall be payable quarterly in arrears on the last day of each
March, June, September and December and on the Termination Date. Such fees shall
be computed on the basis of a year of 360 days and paid for the actual number of
days elapsed.
(b) The Company shall pay to the Agent for the account of each Bank a
commitment fee at the rate of 0.15% per annum, accruing from and including the
Effective Date to but excluding the earlier of (i) the Purchase Closing Date and
(ii) the Termination Date, on such Bank's Commitment Percentage of the Amount
Available. Such commitment fee shall be calculated on the basis of a year of
360 days and paid on the earlier of the Purchase Closing Date and the
Termination Date for the actual number of days then elapsed.
(c) The Company shall pay to the Issuing Bank, with respect to any
amendment to the Letter of Credit and each drawing made thereunder, documentary
and processing charges in accordance with the Issuing Bank's standard schedule
for such charges in effect at the time of such amendment or drawing, as the case
may be, which charges shall be payable on demand as incurred.
SECTION 2.07. Increased Cost; Reduced Return; Substitute Bank.
-----------------------------------------------
(a) If, on or after the date hereof, the adoption of any applicable
law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (including the Issuing Bank) with any request
or directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:
(i) shall subject such Bank to any tax, duty or other charge with
respect to the Letter of Credit, or shall change the basis of taxation of
payments to such Bank in respect of the Letter of Credit or any other
amounts due under this Agreement (except for changes in the rate of tax on
the overall net income of such Bank imposed by the United States, any state
thereof or any local governmental body, agency or authority therein); or
(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve
System) against letters of credit issued by, or assets
10
of, deposits with or for the account of, or credit extended by, the Bank or
shall impose on such Bank any other condition affecting the Letter of
Credit;
and the result of any of the foregoing is to increase the cost to such Bank of
issuing or maintaining the Letter of Credit or making payments thereunder or to
reduce the amount of any sum received or receivable by such Bank under this
Agreement, by an amount deemed by such Bank to be material, then, within 30 days
after demand by such Bank, the Company shall pay to the Agent for the account of
such Bank such additional amount or amounts as will compensate such Bank for
such increased cost or reduction.
(b) Without duplication of any amounts paid under subsection (a)
above, if any Bank (including the Issuing Bank) shall have determined that, on
or after the date hereof, the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on capital
of such Bank (or its Parent) as a consequence of such Bank's obligations under
the Letter of Credit to a level below that which it could have achieved but for
such adoption, change, request or directive (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by such Bank to
be material, then from time to time, within 30 days after demand by such Bank,
the Company shall pay to the Agent for the account of such Bank such additional
amount or amounts as will compensate such Bank (or its Parent) for such
reduction.
(c) Each Bank (including the Issuing Bank) will promptly notify the
Company and the Agent of any event of which it has knowledge, occurring on or
after the date hereof, which will entitle such Bank to compensation pursuant to
this Section and will change the office at which its participation hereunder is
booked if such change will avoid the need for, or reduce the amount of, such
compensation and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. A certificate of such Bank claiming compensation
under this Section and setting forth the additional amount or amounts to be paid
to it hereunder that is signed by an officer of such Bank with knowledge of and
responsibility for such matters and that sets forth such amount or amounts and a
reasonable explanation of the basis therefor shall be conclusive in the absence
of manifest error. In determining
11
such amount, such Bank may use any reasonable averaging and attribution methods.
(d) If any Bank has demanded compensation under this Section, the
Company shall have the right, with the assistance of the Agent, to seek a
mutually satisfactory substitute bank or banks (which may be one or more of the
Banks) to assume the obligations of such Bank under this Agreement.
SECTION 2.08. General Provisions as to Payments. (a) Any payment to
---------------------------------
be made by the Company under any provision of this Agreement shall be made not
later than 12:00 Noon (New York City time) on the date when due, in Federal or
other funds immediately available in New York City, to the Agent at its address
referred to in Section 7.01.
(b) Whenever any payment under this Agreement shall be due on a day
that is not a Business Day, the date for payment thereof shall be extended to
the next succeeding Business Day. If the date for payment of any reimbursement
obligation hereunder is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time at the specified rate.
ARTICLE III
CONDITIONS
SECTION 3.01. Letter of Credit Agreement Closing. The closing
----------------------------------
hereunder shall be subject to the following conditions precedent (the date such
conditions are satisfied, the "Letter of Credit Agreement Closing Date"):
(a) receipt by the Agent of an opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.,
Second Vice President and Counsel of the Company, substantially in the form
of Exhibit B hereto;
(b) receipt by the Agent of all documents the Agent may reasonably
request relating to the existence of the Company, the corporate authority
for and the validity of this Agreement and any other matters relevant
hereto, all in form and substance reasonably satisfactory to the Agent; and
(c) receipt by the Agent for its own account and the respective
accounts of the Banks of payment of all fees and other amounts then payable
by the Company.
12
The Agent shall promptly notify the Company and each Bank of the occurrence of
the Letter of Credit Agreement Closing Date, and such notice shall be conclusive
and binding on all parties hereto. On the Letter of Agreement Closing Date the
Issuing Bank shall deliver to the Company an opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice
President and Assistant General Counsel of the Issuing Bank, substantially in
the form of Exhibit C hereto.
SECTION 3.02. Issuance. (a) The obligation of the Issuing Bank to
--------
issue the Letter of Credit is subject to the conditions that (i) the Letter of
Credit Agreement Closing Date and the Purchase Closing Date shall have occurred
on or prior to the Purchase Closing Deadline Date and (ii) the Agent shall have
received from the Company a certificate signed by a duly authorized officer of
the Company (A) stating that the Company has determined that it is or may be
unable to obtain reinsurance credit for all or any portion of the gross reserves
maintained by it with respect to all of the Reserves and Liabilities ceded by it
to the Reinsurer under the Coinsurance Agreement and (B) identifying the
requested date of issuance of the Letter of Credit, which shall be not less than
five Business Days after the date of delivery of such certificate.
(b) Subject to satisfaction of the conditions set forth in subsection
(a) above, the obligation of the Issuing Bank to issue the Letter of Credit
under this Agreement shall be absolute, unconditional and irrevocable, and shall
be performed strictly in accordance with the terms of this Agreement, under all
circumstances whatsoever, including without limitation the following
circumstances:
(i) any lack of validity or enforceability of any Transaction
Document or this Agreement;
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Transaction Document or this Agreement;
(iii) the existence of any claim, set-off, defense or other rights
that the Issuing Bank or any Bank may have at any time against the Company,
the Banks or any other Person, whether in connection with this Agreement,
any Transaction Document, this Agreement or any unrelated transactions;
(iv) any default by the Company or any Bank in its obligations
hereunder, or any insolvency, receivership or similar proceedings with
respect to the Company, the Agent, the Reinsurer or any Bank; or
13
(v) to the extent permitted by applicable law, any other act or
omission to act or delay of any kind by the Company, the Agent, the
Reinsurer, the Issuing Bank, any Bank or any other Person or any other
event or circumstance whatsoever that might, but for the provisions of this
Section, constitute a legal or equitable discharge of the Issuing Bank's
obligations hereunder or under any Transaction Document.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Each Party. The Company and each Bank hereby severally
----------
represents and warrants solely as to itself, for the benefit of each other party
hereto, that:
(a) Authorization, etc. Such party has all requisite corporate power
------------------
and authority to make, deliver and perform this Agreement and has taken all
necessary corporate action to authorize the execution, delivery and performance
of this Agreement. No consent or authorization of, filing (other than
informational filings) with or other act by or in respect of any Governmental
Authority is required in connection with the execution, delivery, performance,
validity or enforceability of this Agreement. This Agreement has been duly
executed and delivered on behalf of such party and constitutes a legal, valid
and binding agreement of such party, enforceable against such party in
accordance with its terms, except as may be limited by applicable receivership,
insolvency or similar laws affecting the enforcement of creditors' rights
generally and by equitable principles of general applicability.
(b) No Conflicts. The execution, delivery and performance of this
------------
Agreement do not and will not (i) violate any material Requirement of Law or any
material Contractual Obligation of such party, (ii) result in or constitute
(with or without the giving of notice, lapse of time or both) any default or
event of default under any such material Contractual Obligation or (iii) result
in, or require, the creation or imposition of any Lien on any of its or their
respective properties or revenues pursuant to any material Requirement of Law or
material Contractual Obligation.
SECTION 4.02. Issuing Bank. The Issuing Bank hereby represents and
------------
warrants that:
14
(a) Authorization, etc. The Issuing Bank has all requisite corporate
------------------
power and authority to issue the Letter of Credit hereunder and has taken all
necessary corporate action to authorize such issuance on the terms and
conditions of this Agreement. No consent or authorization of, filing with or
other act by or in respect of any Governmental Authority is required in
connection with such issuance. This Agreement has been duly executed and
delivered on behalf of the Issuing Bank and constitutes, and the Letter of
Credit, when executed and delivered pursuant to this Agreement will constitute,
a legal, valid and binding agreement of the Issuing Bank, enforceable against
the Issuing Bank in accordance with its terms, except as may be limited by
applicable receivership, insolvency or similar laws affecting the enforcement of
creditors' rights generally and by equitable principles of general
applicability.
(b) No Conflicts. The issuance of the Letter of Credit hereunder does
------------
not and will not (i) violate any material Requirement of Law or any material
Contractual Obligation of the Issuing Bank, (ii) result in or constitute (with
or without the giving of notice, lapse of time or both) any default or event of
default under any such material Contractual Obligation or (iii) result in, or
require, the creation or imposition of any Lien on any of its properties or
revenues pursuant to any material Requirement of Law or material Contractual
Obligation.
ARTICLE V
COVENANTS OF THE COMPANY
SECTION 5.01. First Loss. The Company covenants and agrees that it
----------
will not make any drawing under the Letter of Credit unless (and then only to
the extent that) at the time of such drawing the aggregate amount then due from
the Reinsurer with respect to the Coinsured Policies under the Coinsurance
Agreement which the Reinsurer has failed to pay exceeds the sum of (i)
$113,000,000 plus (ii) the aggregate unreimbursed amount of any prior drawings
under the Letter of Credit.
SECTION 5.02. Enforcement of Reinsurer's Obligations; Assignment of
-----------------------------------------------------
Coinsurance Obligations. (a) The Company covenants and agrees that in the event
-----------------------
of any drawing under the Letter of Credit, it will, in accordance with
subsection (c) below, enforce the obligations of the Reinsurer under the
Coinsurance Agreement at the expense of and for the account of the Banks ratably
in proportion to their Commitment
15
Percentages in accordance with the reasonable instructions of the Agent (amounts
received through any such enforcement shall be applied: first, to the reasonable
-----
expenses of obtaining the same; second, to accrued but unpaid interest on
------
unreimbursed drawings under the Letter of Credit, calculated in accordance with
Section 2.03; third, to unreimbursed drawings under the Letter of Credit; and
-----
fourth, if all the foregoing amounts have been paid in full, to be retained by
------
the Company).
(b) Upon 10 Business Days' prior written receipt of notice from the
Agent at the request of the Required Banks, the Company will assign, as security
for payment of unreimbursed drawings under the Letter of Credit, its rights to
receive payments under the Coinsurance Agreement to the Agent on behalf of the
Banks for enforcement thereof by the Agent on behalf of the Banks and the
Company in lieu of enforcement thereof by the Company. In such event, the Banks
will, and will instruct the Agent to, enforce the assigned rights in a manner
which is commercially reasonable, and the Agent will enforce such assigned
rights in accordance with such instructions and will promptly remit to the
Company any amounts received through any such enforcement in excess of the
amounts set forth in clauses first through third of subsection (a) above.
----- -----
(c) The following provisions shall apply to the Company in the
performance of its enforcement duties under Section 5.02(a):
(i) The Company shall act or refrain from acting in accordance with
the written instructions of the Agent (and the Company may, as a condition
thereto, require indemnification from the Banks severally against any cost,
expense (including counsel fees and disbursements), claim, demand, action, loss
or liability that the Company may suffer or incur in connection with the
exercise of its duties and rights under this Section 5.02 and, at the Company's
option, require from time to time the deposit by the Banks of adequate funds to
cover such indemnification obligations, all in form and substance reasonably
satisfactory to the Company).
(ii) The Company shall not be obligated to take any action so
instructed if the Company determines on the basis of advice of counsel that such
action would violate a Requirement of Law. The Company may consult with legal
counsel and shall not be liable for any action taken or omitted to be taken by
it in good faith in accordance with the advice of such counsel.
16
(iii) The Company shall not be liable for any action taken or not
taken in accordance with the instructions of the Agent as contemplated by
subsection (a) except for its own gross negligence or willful misconduct.
SECTION 5.03. Merger, Consolidation, Etc. The Company will not (i)
---------------------------
consolidate with or merge with or into any other Person or (ii) sell, assign,
lease, transfer or otherwise dispose of all or substantially all of its assets
to any other Person, unless the Person surviving such merger or consolidation,
if not the Company, or to which all or substantially all of the assets of the
Company are transferred, as the case may be, executes and delivers to the Agent
an instrument reasonably satisfactory to the Agent pursuant to which such Person
assumes all of the Company's obligations under this Agreement.
ARTICLE VI
THE AGENT
SECTION 6.01. Appointment and Authorization. Each Bank irrevocably
-----------------------------
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the Letter of Credit as are
delegated to the Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto.
SECTION 6.02. Agent and Affiliates. ▇▇▇▇▇▇ Guaranty Trust Company of
--------------------
New York shall have the same rights and powers under this Agreement as any other
Bank and may exercise or refrain from exercising the same as though it were not
the Agent, and ▇▇▇▇▇▇ Guaranty Trust Company of New York and its affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Company or affiliate of the Company as if it were not the
Agent hereunder.
SECTION 6.03. Action by Agent. The obligations of the Agent hereunder
---------------
are only those expressly set forth herein. Without limiting the generality of
the foregoing, the Agent shall not be required to take any action with respect
to any Default, except as expressly provided in Article VII.
SECTION 6.04. Consultation with Experts. The Agent may consult with
-------------------------
legal counsel (who may be counsel for the
17
Company), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
SECTION 6.05. Liability of Agent. Neither the Agent nor any of its
------------------
affiliates nor any of their respective directors, officers, agents or employees
shall be liable for any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Banks or (ii) in the
absence of its own gross negligence or willful misconduct. Neither the Agent nor
any of its affiliates nor any of their respective directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire into
or verify (i) any statement, warranty or representation made in connection with
this Agreement or the issuance of the Letter of Credit; (ii) the performance or
observance of any of the covenants or agreements of the Company; (iii) the
satisfaction of any condition specified in Article III, except receipt of items
required to be delivered to the Agent; or (iv) the validity, effectiveness or
genuineness of this Agreement, or any other instrument or writing furnished in
connection herewith. The Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement or other writing
(which may be a bank wire, telex or similar writing) believed by it to be
genuine or to be signed by the proper party or parties.
SECTION 6.06. Indemnification. Each Bank shall, ratably in accordance
---------------
with its Commitment Percentage, indemnify the Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Company) against any cost, expense (including counsel fees and
disbursements), claim, demand, action, loss or liability (except such as result
from such indemnitees' gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with this Agreement or any action
taken or omitted by such indemnitees hereunder.
SECTION 6.07. Credit Decision. Each Bank acknowledges that it has,
---------------
independently and without reliance upon the Agent, the Company or any other
Bank, and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each
Bank also acknowledges that it will, independently and without reliance upon the
Agent, the Company or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking any action under this Agreement.
18
SECTION 6.08. Successor Agent. The Agent may resign at any time, with
---------------
the consent of the Company (which consent shall not be unreasonably withheld),
by giving written notice thereof to the Banks and the Company. Upon any such
resignation, the Required Banks shall have the right, with the consent of the
Company, to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Required Banks, and shall have accepted such appointment,
within 30 days after the retiring Agent gives notice of resignation, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be a commercial bank organized or licensed under the laws of the United
States of America or of any State thereof and having a combined capital and
surplus of at least $50,000,000. Upon the acceptance of its appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent.
SECTION 6.09. Agent's Fees. The Company shall pay to the Agent for its
------------
own account fees in the amounts and at the times previously agreed upon between
the Company and the Agent pursuant to the commitment letter dated as of November
19, 1996 between the Company and the Agent.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Notices. All notices, requests and other communications
-------
hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be given to the Company, the Agent,
the Issuing Bank or any Bank at its address or telex or facsimile number set
forth on the signature pages hereof or such other address or telex or facsimile
number as such party may hereafter specify for the purpose by notice to the
other party. Each such notice, request or other communication shall be effective
(i) if given by telex, when such telex is transmitted to the telex number
specified in this Section and the appropriate answerback is received, (ii) if
given by mail, 72 hours after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid or (iii) if given by any
other means, when received at the address specified in this Section.
19
SECTION 7.02. No Waivers. No failure or delay by the Company, the
----------
Agent, the Issuing Bank or any Bank in exercising any right, power or privilege
under this Agreement 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. Subject to and except as
otherwise provided in Sections 2.03, 2.04 and 3.02(b), the rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 7.03. Expenses. (a) The Company shall pay (i) all reasonable
--------
out-of-pocket expenses of the Agent, including reasonable fees and disbursements
of special counsel for the Agent, in connection with the preparation of the
Agreement and the Letter of Credit, any waiver or consent hereunder or any
amendment hereof and (ii) if the Company defaults hereunder, all reasonable out-
of-pocket expenses incurred by the Agent or any Bank, including reasonable fees
and disbursements of counsel, in connection with such default collection and
other enforcement proceedings resulting therefrom.
(b) Neither Section 2.05 nor this Section 7.03 shall require the
Company to pay the reasonable fees and disbursements of more than one counsel to
act on behalf of the Agent and all Banks (which counsel shall be selected by the
Agent) unless the representation of all such parties by one counsel would not be
appropriate under applicable rules of professional responsibility, in which case
the Company may be required to pay the reasonable fees and disbursements of not
more than one additional counsel.
SECTION 7.04. Sharing. Each Bank agrees that if it shall receive payment
-------
of a proportion of the aggregate amount of principal and interest due with
respect to any Letter of Credit Liabilities which is greater than the proportion
received by any other Bank in respect of the aggregate amount of principal and
interest due with respect to any Letter of Credit Liabilities held by such other
Bank, the Bank receiving such proportionately greater payment shall purchase
such participations in the Letter of Credit Liabilities held by the other Banks,
and such other adjustments shall be made, as may be required so that all such
payments with respect to the Letter of Credit Liabilities held by the Banks
shall be shared by the Banks in proportion to their respective Commitment
Percentages.
SECTION 7.05. Amendments and Waivers. Any provision of this Agreement
----------------------
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed
20
by the Company and the Required Banks (and, if the rights or duties of the Agent
or the Issuing Bank are affected thereby, by the Agent or the Issuing Bank, as
relevant); provided that no such amendment or waiver shall, unless signed by all
--------
the Banks, (i) increase the Amount Available, increase or decrease the
Commitment Percentage of any Bank or subject any Bank to any additional
obligation, (ii) reduce the amount to be reimbursed in respect of the Letter of
Credit or interest thereon or any fees hereunder, (iii) postpone the date fixed
for any payment of the amount to be reimbursed in respect of the Letter of
Credit or interest thereon or any fees hereunder, or the Purchase Closing
Deadline Date or the Termination Date, (iv) change Section 2.05 or (v) change
the definition of Required Banks or the provisions of this Section.
SECTION 7.06. Successors and Assigns. The provisions of this Agreement
----------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, but only to the extent permitted by the
following provisions of this Section:
(a) The Company may assign its rights under this Agreement to a
Permitted Assignee; provided that such assignment shall in no way affect any of
--------
the Company's obligations under this Agreement.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in any or all of its
Letter of Credit Liabilities. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Company, the Agent and the Issuing Bank, such Bank shall remain responsible for
the performance of its obligations hereunder and under the Letter of Credit, and
the Company, the Agent and the Issuing Bank shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under this Agreement. Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall retain the sole right
and responsibility to enforce the obligations of the Company hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that such participation
--------
agreement may provide that such Bank will not agree to any modification,
amendment or waiver of this Agreement described in clause (i), (ii) or (iii) of
Section 7.05 without the consent of the Participant.
(c) Any Bank may assign to one or more banks or other institutions
(each an "Assignee") all, or a
21
proportionate part (equivalent to a Commitment Percentage of 3% or greater) of
all, of its rights and obligations under this Agreement and the Letter of
Credit, with (and subject to) the subscribed consent of the Company, which shall
not be unreasonably withheld, and the Agent; provided that the foregoing shall
--------
not be applicable in the case of, and this subsection (c) shall not restrict, an
assignment or other transfer by any Bank to an affiliate of such Bank or to
another Bank. Upon execution and delivery of an instrument of assignment and
payment by such Assignee to such transferor Bank of an amount equal to the
purchase price agreed between such transferor Bank and such Assignee, such
Assignee shall be a Bank party to this Agreement and shall have all the rights
and obligations of a Bank with a Commitment Percentage as set forth in such
instrument of assumption, and the transferor Bank shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required.
SECTION 7.07. Governing Law; Submission to Jurisdiction. This
-----------------------------------------
Agreement shall be governed by and construed in accordance with the laws of the
State of New York. Each of the Company, the Banks, the Issuing Bank and the
Agent hereby submit to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and of any New York State
court sitting in New York City for purposes of all legal proceedings arising out
of or relating to this Agreement or the transactions contemplated hereby. The
Company, the Banks, the Issuing Bank and the Agent irrevocably waive, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.
SECTION 7.08. Counterparts; Integration; Effectiveness. This
----------------------------------------
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof, subject to Section 6.09. This Agreement shall become effective on the
date of receipt by the Agent of a counterpart hereof signed by each of the
parties hereto (or, in the case of any party as to which an executed counterpart
shall not have been received, receipt by the Agent in form satisfactory to it of
facsimile or other written confirmation from such party of execution of a
counterpart hereof by such party).
22
SECTION 7.09. WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE ISSUING
--------------------
BANK, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
23
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
▇▇▇▇ ▇▇▇▇▇▇▇ MUTUAL LIFE INSURANCE
COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President & Treasurer
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
Copies of notices to:
▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life
Insurance Company
Investment Law Floor T-50
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, Esq.
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, as Bank,
Issuing Bank and Agent
By /s/ ▇▇▇ ▇. ▇▇▇▇▇
----------------------
Title: Vice President
For Business and Credit Matters:
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇
Vice President
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
For Administrative Matters:
c/o ▇.▇. ▇▇▇▇▇▇ Services, Inc.
Loan Operations-3rd Floor/OPS2
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Associate Credit
Administrator
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇/1094
Backup Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Associate Credit
Administrator
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile Number: ▇▇▇-▇▇▇-▇▇▇▇/1094
THE FIRST NATIONAL BANK OF BOSTON
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
Title: Managing Director
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇-▇▇-▇▇-▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Managing Director
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
FLEET NATIONAL BANK
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Title: Assistant Vice President
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Vice President
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
THE FUJI BANK, LIMITED
LOS ANGELES AGENCY
By /s/ Hiro - ▇▇▇▇▇ ▇▇▇▇▇
-----------------------
Title: Joint General Manager
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
THE SANWA BANK, LIMITED
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------
Title: Senior Vice President
For Credit Matters:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
For Administrative Matters:
Park Avenue Plaza
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ Hara
Vice President
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile number: 212-754-2368
WACHOVIA BANK OF GEORGIA, N.A.
By /s/ M. ▇▇▇▇▇▇ ▇▇▇▇, III
------------------------
Title: Vice President
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: U.S. Corporate Banking
▇▇▇▇ ▇. Eagle
Vice President
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
STATE STREET BANK AND TRUST COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------
Title: Vice President
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile Number: ▇▇▇-▇▇▇-▇▇▇▇
BANQUE NATIONALE DE PARIS
LOS ANGELES BRANCH
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------
Title: Senior Vice President & Manager
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------
Title: Vice President
For Credit Matters:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
For Administrative Matters:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Treasury Department
▇▇▇ ▇▇▇▇
Vice President
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
THE SUMITOMO BANK, LIMITED
NEW YORK BRANCH
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------
Title: Joint General Manager
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Yukimi Konno
Assistant Vice President
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile number: 224-5188
THE BANK OF NOVA SCOTIA
By /s/ ▇▇▇▇▇ ▇. York
----------------------
Title: Vice President
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. York
Office Head
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
Commitment Schedule
Bank Commitment Amount Commitment Percentage
---- ----------------- ---------------------
▇▇▇▇▇▇ Guaranty $152,000,000.00 38.28%
Trust Company
of New York
The First National $ 50,000,000.00 12.58%
Bank of Boston
Banque Nationale $ 30,000,000.00 7.56%
de Paris
Los Angeles Branch
Fleet National $ 30,000,000.00 7.56%
Bank
The Fuji Bank, $ 30,000,000.00 7.56%
Limited
The Sanwa Bank, $ 30,000,000.00 7.56%
Limited
Wachovia Bank $ 30,000,000.00 7.56%
of Georgia, N.A.
State Street Bank $ 20,000,000.00 5.04%
and Trust Company
The Sumitomo Bank, $ 15,000,000.00 3.78%
Limited
New York Branch
The Bank of Nova $ 10,000,000.00 2.52%
Scotia
----------------- ---------------------
$397,000,000.00 100.00%
EXHIBIT A
LETTER OF CREDIT
Issuance Date: ,____
Letter of Credit No. ____________
Amount: USD $
Beneficiary:
▇▇▇▇ ▇▇▇▇▇▇▇ MUTUAL LIFE INSURANCE COMPANY
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Amount in Words:
Ladies and Gentlemen:
We hereby open in your favor, effective , , our
Irrevocable Standby Letter of Credit for an amount of U.S. Dollars $
([amount in words] U.S. Dollars). To the extent not theretofore reduced to the
same or a lesser amount pursuant to the second following paragraph of this
Letter of Credit, the amount available hereunder will be automatically reduced,
without requirement of notice or other action by any party, on each date set
forth below to the amount set forth opposite such date:
Date Amount Available
---- ----------------
The amount available hereunder at any time, determined in accordance with this
paragraph and the second following paragraph, is hereinafter referred to as the
"Amount Available". This Letter of Credit will expire on the earlier of (i)
[stated expiry date], or if such date is not a Business Day, the next succeeding
Business Day, and (ii) the date on which the Amount Available is reduced to
zero.
You are authorized to draw on us from time to time on or after the
date hereof by your draft at sight in substantially the form attached hereto as
Annex I.
Upon our honoring of any draft presented by you hereunder, the Amount
Available under this Letter of Credit shall be automatically and permanently
reduced by the amount drawn under such draft. Additionally, the Amount Available
shall be reduced upon our receipt of written notification
purportedly from your authorized officer instructing us to permanently reduce
the Amount Available and indicating the amount of such reduction.
Each draft presented hereunder shall be dated the date of its
presentation and each such draft shall be presented on a business day. A draft
may be presented by mail, by facsimile transmission or by physical or courier
delivery. Drafts and documents presented by mail or facsimile transmission
should be sent to ▇▇▇▇▇▇ Guaranty Trust Company of New York, c/o ▇.▇. ▇▇▇▇▇▇
Services, Inc., ▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇, Attention:
International Trade Services (Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇/39). Courier or
physical deliveries should be addressed to ▇▇▇▇▇▇ Guaranty Trust Company of New
York, c/o ▇.▇. ▇▇▇▇▇▇ Services, Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇, Attention: International Trade Services. Although we
prefer physical presentations be made to our Newark, Delaware location, our ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ location is also available for your
physical presentations. Should you use our ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ location for physical
presentations, letters of credit/documents must be directed to, the Brokers Loan
Unit, Basement A, Attention: International Trade Services.
If we receive any draft at the appropriate office specified above, all
in strict conformity with the terms and conditions of this Letter of Credit, not
later than 12:00 noon (New York time) on a business day on or prior to the
termination hereof, we will honor the same by initiating the wiring of funds by
2:00 p.m. (New York time) on the same day in accordance with your payment
instructions. If we receive any draft at such office, all in strict conformity
with the terms and conditions of this Letter of Credit, after 12:00 noon (New
York time) on a business day prior to the termination hereof, we will honor the
same by 12:00 noon (New York time) on the next succeeding business day in
accordance with your payment instructions. As used herein, "business day" means
a day other than a Saturday, Sunday or other day on which banks in New York City
or Wilmington, Delaware are authorized or required by law to close.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein. Except as
otherwise provided herein, this Letter of Credit shall be governed by and
construed in accordance with the Uniform Customs and Practice for Documentary
Credits (1993 revisions), International Chamber of Commerce Publication No. 500
and, to the extent not inconsistent therewith, the laws of the State
of New York. Communications with respect to this Letter of Credit other than
presentations of drafts hereunder shall be in writing and shall be addressed to
us at our address for mail presentation set forth above, specifically referring
to the number of this Letter of Credit.
This Letter of Credit is transferable in its entirety (but not in
part) to any "Permitted Assignee" under the Letter of Credit Agreement dated as
of January 2, 1997 (as such agreement may heretofore have been or hereafter be
amended, supplemented or otherwise modified from time to time) among you, the
Banks party thereto and the undersigned and such transferred Letter of Credit
may be successively transferred. Transfer of this Letter of Credit to such
transferee shall be effected upon the presentation to us of this Letter of
Credit accompanied by the transfer form attached hereto as Annex II.
Very truly yours,
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK
By:___________________________
ANNEX I TO
LETTER OF CREDIT
----------------
[FORM OF DRAFT]
__________, 19__
$ [aggregate amount]
--------------------
At sight of this Draft
To ▇▇▇▇▇▇ Guaranty Trust Company of New York
Pay to the order of the undersigned, as beneficiary under the Letter
of Credit referred to below, the amount $_____ ([INSERT AMOUNT IN WORDS]
Dollars).
Drawn under Irrevocable Letter of Credit No. __________.
▇▇▇▇ ▇▇▇▇▇▇▇ MUTUAL LIFE
INSURANCE COMPANY
By:_______________________
Name:
Title:
By:_______________________
Name:
Title:
ANNEX II TO
LETTER OF CREDIT
▇▇▇▇▇▇ Guaranty Trust Company of New York
c/o ▇. ▇. ▇▇▇▇▇▇ Services, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: International Trade Services
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
(Name of Transferee)
(Address)
all rights of the undersigned beneficiary under the above Letter of Credit. Said
transferee is a "Permitted Assignee" under the Letter of Credit Agreement (as
such agreement may heretofore have been or hereafter be amended, supplemented or
otherwise modified from time to time) dated as of January 2, 1997 among you, the
Banks party thereto and the undersigned.
By this transfer, all rights of the undersigned beneficiary in such
Letter of Credit are transferred to the transferee and the transferee shall have
the sole rights as beneficiary thereof, including sole rights relating to any
amendments whether increases or extensions or other amendments and whether now
existing or hereafter made. All amendments are to be advised direct to the
transferee without necessity of any consent of or notice to the undersigned
beneficiary.
The Letter of Credit is returned herewith, and we ask you to endorse
the transfer on the reverse thereof, and forward it direct to the transferee
with your customary notice of transfer.
Yours very truly,
SIGNATURE AUTHENTICATED
_______________________ ___________________________
(Bank) Signature of Beneficiary
_______________________
(Authorized Signature)
EXHIBIT B
OPINION OF
COUNSEL FOR THE COMPANY
-----------------------
[LETTER OF CREDIT AGREEMENT CLOSING DATE]
To the Banks and the Agent
Referred to Below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company
of New York
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I am Second Vice President and Counsel of ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life
Insurance Company, a mutual life insurance company (the "Company"), and am
delivering this opinion in connection with the Letter of Credit Agreement (the
"Agreement") dated as of January 2, 1997 among the Company, the banks party
thereto (the "Banks") and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Issuing
Bank and Agent. Terms defined in the Agreement are used herein as therein
defined.
In connection with the opinions expressed below, I or attorneys under
my general supervision have examined originals or copies, certified or otherwise
identified to my or their satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as I have deemed necessary or advisable for
purposes of this opinion. In such examinations and investigations, I have
assumed the genuineness of all signatures (other than signatures of officers of
the Company), the authenticity of all documents submitted to me as originals,
the conformity to original documents of all documents submitted to me as
certified or photostatic copies, and the authenticity of the originals of such
documents. As to any facts material to such opinions, I have, to the extent that
the relevant facts were not independently established by me, relied upon
certificates of public officials and certificates, representations and
declarations of officers or other representatives of the Company.
In giving the opinions expressed below, I have assumed (i) the due
authorization, execution and delivery by all parties, other than the Company, of
all documents to which
they are a party, (ii) the legal right and power of all parties, other than the
Company, under all applicable laws and regulations to enter into, execute,
deliver and perform their respective obligations under the documents to which
they are a party, and (iii) that all documents entered into, executed and
delivered by parties other than the Company, are legal, valid, binding and
enforceable against all such parties in accordance with their respective terms.
Based upon and subject to the foregoing and subject to the
qualifications discussed below, I am of the following opinion:
1. The Company is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
incorporation, and has the corporate power and authority to own
and operate its property and to conduct the business in which it
is currently engaged.
2. The execution, delivery and performance by the Company of the
Agreement are within the Company's corporate powers, have been
duly authorized by all necessary corporate action, require no
consent or authorization of, action by or in respect of, or
filing (other than informational filings) with, any federal or
state Governmental Authority and to my knowledge after due
inquiry, do not (i) violate any material Requirement of Law or
any material Contractual Obligation of the Company; (ii) result
in or constitute (with or without the giving of notice, lapse of
time or both) any default or event of default under any such
material Contractual Obligation, or (iii) result in, or require,
the creation or imposition of any Lien (other than Liens created
or to be created in the future pursuant to the Agreement) on any
of its or their respective properties or revenues pursuant to any
material Requirement of Law or material Contractual Obligation.
3. The Agreement constitutes a legal, valid and binding agreement of
the Company, enforceable against the Company in accordance with
its terms, except as may be limited by applicable receivership,
liquidation, rehabilitation, moratorium, fraudulent conveyance,
insolvency or similar laws affecting the enforcement of
creditors' rights generally and by equitable principles of
general applicability (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
4. The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
The opinions expressed above are subject to the following
qualifications:
(a) I am a member of the Bar of the Commonwealth of Massachusetts. I
express no opinion as to any laws other than the laws of the
Commonwealth of Massachusetts and the federal laws of the United
States of America. For purposes of this opinion, I have assumed that
the Agreement is governed by and construed in accordance with the
internal laws of the Commonwealth of Massachusetts, notwithstanding
any provision of the Agreement to the contrary.
(b) Whenever any opinion expressed herein is based upon "my knowledge
after due inquiry", such knowledge is limited to information obtained
by me from a general inquiry of the members of the Law Sector of ▇▇▇▇
▇▇▇▇▇▇▇ which inquiry only inquired as to the actual knowledge of such
members of the Law Sector without further investigation or inquiry and
I have not conducted any investigation, nor do I intend to undertake
for purposes of this opinion any investigation, of any facts that may
be ascertained by the examination of any files or third parties. Such
level of inquiry in my opinion is reasonable in its scope under the
circumstances.
(c) I express no opinion as to the effect of the opinions herein stated of
(i) compliance or non-compliance by any party, other than the Company,
with any Requirement of Law applicable to any such party or (ii) the
legal or regulatory status or the nature of the business of any such
party.
(d) I express no opinion herein as to whether a federal or state court
outside the State of New York would give effect to the choice of New
York law provided for the Agreement.
(e) The opinions expressed herein are qualified to the extent that the
validity, binding nature and enforceability against the Company of the
Agreement may be limited or otherwise affected by the unenforceability
under certain circumstances of (i) provisions indemnifying, or
prospectively releasing, a party where a release or indemnification
provision is contrary to public policy, and (ii) provisions expressly
or by implication waiving broadly or vaguely stated rights, unknown
future rights, defenses to obligations or rights granted by law, where
such waivers are contrary to public policy.
I am delivering this opinion to you for your benefit. No Person other
than you is entitled to rely on this opinion without my prior written consent.
This opinion does not address facts and circumstances or changes in applicable
laws or regulations arising after the date hereof and I assume no responsibility
to inform you of any such changes which may come to my attention.
Very truly yours,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Second Vice President
and Counsel
EXHIBIT C
[LETTER OF CREDIT AGREEMENT
CLOSING DATE]
OPINION OF COUNSEL FOR THE ISSUING BANK
---------------------------------------
To: ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life
Insurance Company
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
This opinion is furnished to you in connection with the Letter of
Credit Agreement dated as of January 2, 1997 among ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life
Insurance Company, the Banks listed therein and ▇▇▇▇▇▇ Guaranty Trust Company of
New York (the "Bank"), as Agent (the "Agreement"). Terms defined in the
Agreement and used but not defined herein have the meanings given to them in the
Agreement.
I am Vice President and Assistant General Counsel of the Bank. In
connection with the delivery of this opinion, I have examined (a) a copy of the
Agreement and the form of Letter of Credit attached thereto as Exhibit A (the
"Letter of Credit") and (b) copies, certified or otherwise identified to my
satisfaction, of such documents, corporate records, certificates of public
officials and other instruments, and have conducted such investigation of fact
and law, as I have deemed necessary or appropriate for the opinions expressed
herein.
In rendering the opinions expressed below, I have assumed and have not
verified that the signatures (other than signatures of officers of the Bank) on
all documents that I have examined are genuine.
Based on the foregoing, I am of the opinion that:
(1) the Bank is a corporation, duly organized, validly existing and
in good standing under the laws of the State of New York.
(2) the Bank has full corporate power and authority to execute and
deliver the Agreement and the Letter of Credit and to perform its obligations
thereunder, the Agreement and the Letter of Credit have been duly authorized by
the Bank and the Agreement has been duly executed and delivered by the Bank.
(3) No consents, authorizations or approvals are required for the
execution and delivery by the Bank of the Agreement and the Letter of Credit and
the performance of its obligations thereunder, and no other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for such execution, delivery or performance.
(4) The execution, delivery and performance by the Bank of the
Agreement and the Letter of Credit do not and will not contravene any law or
governmental regulation or order presently binding on the Bank or its articles
of incorporation or bylaws or contravene any provision of or constitute a
default under any indenture, contract or other instrument to which the Bank is a
party or by which the Bank is bound.
(5) The Agreement constitutes, and the Letter of Credit if and when
issued in accordance with the Agreement will constitute, the legal, valid and
binding obligation of the Bank enforceable in accordance with its terms (except
as enforcement thereof may be limited by bankruptcy, reorganization, insolvency,
moratorium or other laws affecting the enforcement of creditors' rights
generally).
The opinions expressed above are subject to the following
qualifications:
(a) I express no opinion as to the effect on the opinions herein
stated of (i) compliance or non-compliance by any party, other than
the Bank, with any Requirement of Law applicable to any such party or
(ii) the legal or regulatory status or the nature of the business of
any such party.
(b) I express no opinion herein as to whether a federal or state
court outside the State of New York would give effect to the choice of
New York law provided for the Agreement.
(c) The opinions expressed herein are qualified to the extent
that the validity, binding nature and enforceability against the Bank
of the Agreement may be limited or otherwise affected by the
unenforceability under certain circumstances of (i) provisions
indemnifying, or prospectively releasing, a party where a release or
indemnification provision is contrary to public policy, and (ii)
provisions expressly or by implication waiving broadly or vaguely
stated rights, unknown future rights, defenses to obligations or
rights granted by law, where such waivers are contrary to public
policy.
I am a member of the bar of the State of New York and the opinions
expressed herein are limited to the laws of the State of New York and the
federal laws of the United States of America.
I am furnishing this letter to you in my capacity as Counsel for the
Bank and this opinion may not be relied upon by any other person without my
prior written consent.
Very truly yours,
