EXHIBIT 4.4
Composite Conformed Copy
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AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
July 29, 1997
among
THE FIRST AMERICAN FINANCIAL CORPORATION
The Lenders Party Hereto
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
_________________________
CHASE SECURITIES INC.,
as Arranger
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Table of Contents
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Section 1. Definitions and Accounting Matters.......................... 1
1.01 Certain Defined Terms................................. 1
1.02 Accounting Terms and Determinations................... 19
1.03 Types of Loans........................................ 20
Section 2. Revolving Credit Commitments, Loans, Notes and Prepayments.. 20
2.01 Loans................................................. 20
2.02 Borrowings............................................ 21
2.03 Changes of Revolving Credit Commitments............... 21
2.04 Commitment Fee........................................ 22
2.05 Lending Offices....................................... 22
2.06 Several Obligations; Remedies Independent............. 22
2.07 Notes................................................. 22
2.08 Optional Prepayments and Conversions or Continuations
of Revolving Credit Loans............................. 23
Section 3. Payments of Principal and Interest.......................... 24
3.01 Repayment of Loans.................................... 24
3.02 Interest.............................................. 24
Section 4. Payments; Pro Rata Treatment; Computations; Etc............. 25
4.01 Payments.............................................. 25
4.02 Pro Rata Treatment.................................... 26
4.03 Computations.......................................... 26
4.04 Minimum Amounts....................................... 26
4.05 Certain Notices....................................... 27
4.06 Non-Receipt of Funds by the Administrative Agent...... 27
4.07 Sharing of Payments, Etc.............................. 28
Section 5. Yield Protection, Etc....................................... 29
5.01 Additional Costs...................................... 29
5.02 Limitation on Types of Revolving Credit Loans......... 32
5.03 Illegality............................................ 32
5.04 Treatment of Affected Loans........................... 33
5.05 Compensation.......................................... 33
5.06 U.S. Taxes............................................ 34
5.07 Replacement of a Lender............................... 35
Section 6. Conditions Precedent........................................ 35
(i)
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Section 7. Representations and Warranties......................... 37
7.01 Corporate Existence.............................. 37
7.02 Financial Condition.............................. 37
7.03 Litigation....................................... 38
7.04 No Breach........................................ 38
7.05 Action........................................... 39
7.06 Approvals........................................ 39
7.07 Use of Credit.................................... 39
7.08 ERISA............................................ 39
7.09 Taxes, Etc....................................... 39
7.10 Investment Company Act........................... 40
7.11 Public Utility Holding Company Act............... 40
7.12 Environmental Matters............................ 40
7.13 Title to Assets.................................. 41
7.14 True and Complete Disclosure..................... 41
Section 8. Covenants of the Company............................... 41
8.01 Financial Statements, Etc........................ 41
8.02 Litigation....................................... 45
8.03 Existence, Etc................................... 45
8.04 Insurance........................................ 46
8.05 Fundamental Changes.............................. 46
8.06 Limitation on Liens.............................. 46
8.07 Indebtedness..................................... 48
8.08 Total Stockholders' Equity....................... 49
8.09 Total Debt to Total Capitalization............... 49
8.10 Minimum Combined Earnings........................ 49
8.11 Lines of Business................................ 50
8.12 Transactions with Affiliates..................... 50
8.13 Use of Proceeds, Etc............................. 50
8.14 Foreclosure; Etc................................. 50
8.15 Communication with Accountants................... 51
8.16 Sale/Leaseback Transactions...................... 51
Section 9. Events of Default...................................... 51
Section 10. The Administrative Agent............................... 55
10.01 Appointment, Powers and Immunities............... 55
10.02 Reliance by Administrative Agent................. 55
10.03 Defaults......................................... 56
10.04 Rights as a Lender............................... 56
(ii)
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10.05 Indemnification......................................... 56
10.06 Non-Reliance on Administrative Agent and Other Lenders.. 57
10.07 Failure to Act.......................................... 57
10.08 Resignation or Removal of Administrative Agent.......... 57
10.09 Consents under Basic Documents.......................... 58
Section 11. Miscellaneous.................................................. 58
11.01 Waiver.................................................. 58
11.02 Notices................................................. 58
11.03 Expenses, Etc........................................... 58
11.04 Amendments, Etc......................................... 60
11.05 Successors and Assigns.................................. 60
11.06 Assignments and Participations.......................... 60
11.07 Survival................................................ 62
11.08 Captions................................................ 62
11.09 Counterparts............................................ 62
11.10 Governing Law; Submission to Jurisdiction............... 62
11.11 Waiver of Jury Trial.................................... 62
11.12 Treatment of Certain Information; Confidentiality....... 63
11.13 Amendment Fees.......................................... 63
11.14 Pledge Agreement........................................ 64
SCHEDULE I - Hazardous Materials
SCHEDULE II - Liens
SCHEDULE III - Indebtedness
EXHIBIT A - Form of Revolving Credit Note
EXHIBIT B - Form of Opinion of Counsel to the Company
EXHIBIT C - Form of Confidentiality Agreement
(iii)
AMENDED AND RESTATED CREDIT AGREEMENT dated as of July 29, 1997 among
THE FIRST AMERICAN FINANCIAL CORPORATION, the LENDERS party hereto, and THE
CHASE MANHATTAN BANK, as Administrative Agent.
The Company (as defined below), the Lenders (as defined below), and
the Administrative Agent are parties to an Amended and Restated Credit Agreement
dated as of April 28, 1993 (as heretofore amended by Amendment No. 1 dated as of
March 31, 1994, Amendment No. 2 dated as of November 22, 1994, Amendment No. 3
dated as of March 31, 1995, Amendment No. 4 dated as of June 1, 1995, Amendment
No. 5 dated as of February 16, 1996, and Amendment No. 6 dated as of April 1,
1997 (which Amended and Restated Credit Agreement amended and restated the First
Credit Agreement, as defined below) and, as supplemented and in effect on the
date hereof, the "Existing Credit Agreement"), pursuant to which certain term
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loans and a revolving credit facility were continued and/or made available to
the Company. As of the date hereof, the aggregate outstanding principal amount
of such term loans is $6,140,000 and the revolving credit commitments are equal
to $30,000,000. The parties hereto desire to amend and restate the Existing
Credit Agreement to provide, among other things, for the continuation of the
"Fixed Rate Loan" (as defined in the Existing Credit Agreement), for the
increase of the revolving credit commitments to $75,000,000 and for the
extension of the availability of the Revolving Credit Availability Period, as
hereinafter set forth. Effective as of the Effective Date (as defined below),
the Existing Credit Agreement shall be amended and restated to read in its
entirety as follows, provided that this Amended and Restated Credit Agreement
shall terminate and be of no further force or effect (except for the provisions
of this Amended and Restated Credit Agreement referred to in Sections 11.03 and
11.07 and the definitions ancillary thereto) and the Existing Credit Agreement
shall not be so amended and restated unless the Effective Date shall occur
before August 5, 1997.
Accordingly, the parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
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1.01 Certain Defined Terms. As used herein, the following terms
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shall have the following meanings (all terms defined in this Section 1.01 or in
other provisions of this Agreement in the singular to have the same meanings
when used in the plural and vice versa):
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"Affiliate" shall mean any Person that directly or indirectly
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controls, or is under common control with, or is controlled by, the Company and,
if such Person is an individual, any member of the immediate family (including
parents, spouse, children and siblings) of such individual and any trust whose
principal beneficiary is such individual or one or more members of such
immediate family and any Person who is controlled by any such member or trust.
As used in this definition, "control" (including, with its correlative meanings,
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"controlled by" and "under common control with") shall mean possession, directly
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or indirectly, of power to direct
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or cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise), provided that, in any event, any Person that owns directly or
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indirectly securities having 5% or more of the voting power for the election of
directors or other governing body of a corporation or 5% or more of the
partnership or other ownership interests of any other Person (other than as a
limited partner of such other Person) will be deemed to control such corporation
or other Person. Without limiting the generality of the foregoing, each of the
following Persons shall, at all times, be Affiliates of the Company: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, any member of their immediate families (including
parents, spouses, children and siblings), any trust whose principal beneficiary
is ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or one of more members of their
immediate families and any Person who is controlled by such member or trust.
Notwithstanding the foregoing, (a) no individual (other than any Person
specified in the preceding sentence) shall be an Affiliate solely by reason of
his or her being a director, officer or employee of the Company or any of its
Subsidiaries and (b) none of the Subsidiaries of the Company shall be
Affiliates.
This "Agreement" shall mean the Existing Credit Agreement as amended
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and restated by this Amendment and Restatement and as the same shall be further
amended and modified and in effect from time to time.
"Applicable Bank Regulatory Authority" shall mean, for any Bank
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Subsidiary, the Federal Deposit Insurance Corporation and all other relevant
bank or thrift regulatory authorities (including, without limitation, relevant
state bank or thrift regulatory authorities) having jurisdiction over such Bank
Subsidiary.
"Applicable Insurance Regulatory Authority" shall mean, for any
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Insurance Company, the insurance commission or similar administrative authority
or agency of the State in which such Insurance Company is domiciled.
"Applicable Lending Office" shall mean, for each Lender and for each
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Type of Loan made by such Lender, the "Lending Office" of such Lender (or of an
affiliate of such Lender) designated for such Type of Loan on the signature
pages hereof or such other office of such Lender (or of an affiliate of such
Lender) as such Lender may from time to time specify to the Administrative Agent
and the Company as the office by which its Loans of such Type are to be made and
maintained.
"Applicable Margin" shall mean, for any day, with respect to any Base
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Rate Loan or Eurodollar Loan, or with respect to the commitment fees payable
hereunder, as the case may be, the applicable rate per annum set forth below
under the caption "Base Rate Spread", "Eurodollar Spread" or "Commitment Fee
Rate", as the case may be, corresponding to the ratings by ▇▇▇▇▇'▇ and S&P,
respectively, as provided for in the definitions of "Category 1", "Category 2",
"Category 3", "Category 4", and "Category 5" in this Section 1.01.
Credit Agreement
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Index Debt Base Rate Eurodollar Committment
Ratings: Spread Spread Fee
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Category 1 0.0000% 0.3000% 0.1000%
Category 2 0.0000% 0.3500% 0.1250%
Category 3 0.0000% 0.4000% 0.1500%
Category 4 0.0000% 0.5000% 0.2000%
Category 5 0.0000% 0.7500% 0.2500%
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For purposes of the foregoing, (i) if either ▇▇▇▇▇'▇ or S&P shall not
have in effect a rating for the Index Debt (other than by reason of the
circumstances referred to in the last sentence of this definition), then such
rating agency shall be deemed to have established a rating equivalent to the
rating provided by the rating agency then having a rating in effect; (ii) if the
▇▇▇▇▇'▇ Rating or the S&P Rating established or deemed to have been established
shall fall within different Categories, the Applicable Margin shall be based on
the higher of the ▇▇▇▇▇'▇ Rating or the S&P Rating unless one of the ▇▇▇▇▇'▇
Rating or the S&P Rating is two or more Categories lower than the other, in
which case the Applicable Margin shall be determined by reference to the
Category next below that of the higher of the ▇▇▇▇▇'▇ Rating or the S&P Rating;
and (iii) if the ▇▇▇▇▇'▇ Rating or the S&P Rating established or deemed to have
been established shall be changed (other than as a result of a change in the
rating system of ▇▇▇▇▇'▇ or S&P), such change shall be effective as of the date
on which it is first announced by the applicable rating agency. Each change in
the Applicable Margin shall apply during the period commencing on the effective
date of such change and ending on the date immediately preceding the effective
date of the next such change. If the rating system of ▇▇▇▇▇'▇ or S&P shall
change, or if either such rating agency shall cease to be in the business of
rating corporate debt obligations, the Company and the Lenders shall negotiate
in good faith to amend this definition to reflect such changed rating system or
the unavailability of ratings from such rating agency and, pending the
effectiveness of any such amendment, the Applicable Margin shall be determined
by reference to the rating most recently in effect prior to such change or
cessation.
"Arbitrage Loans" shall mean loans made by any financial institution
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(a "lender") which is, at the time of the making of such loan, a depository of
the Company or any Subsidiary of the Company, to the Company or any such
Subsidiary in an amount not exceeding the amount of the deposits of the Company
or any such Subsidiary held by such depository, the proceeds of which are
invested in U.S. Government securities and/or
Credit Agreement
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certificates of deposit rated A-1 or P-1 and having a term not exceeding the
maturity date of such loan (but in no event longer than 92 days), provided that
(i) the relevant borrower shall have a right of offset against such investment
(in the case of certificates of deposit) and (ii) all such loans must be off the
balance sheet of the Company and its Subsidiaries at the last day of any
quarterly fiscal period.
"Bank Subsidiary" shall mean First Security Thrift, First American
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Trust and any other Subsidiary of the Company which is a federally- or state-
chartered thrift, bank or trust company.
"Bankruptcy Code" shall mean the Federal Bankruptcy Code of 1978, as
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amended from time to time.
"Base Rate" shall mean, for any day, a rate per annum equal to the
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higher of (a) the Federal Funds Rate for such day plus 1/2 of 1% and (b) the
Prime Rate for such day. Each change in any interest rate provided for herein
based upon the Base Rate resulting from a change in the Base Rate shall take
effect at the time of such change in the Base Rate.
"Basic Documents" shall mean, collectively, this Agreement, the Notes
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and the Pledge Agreement.
"Business Day" shall mean (a) any day (other than a Saturday or a
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Sunday) on which commercial banks are not authorized or required to close in New
York City and (b) if such day relates to a payment or prepayment of principal of
or interest on, a Conversion of or into, or an Interest Period for, a Eurodollar
Loan or a notice by the Company with respect to any such payment, prepayment,
Conversion or Interest Period, any day (other than a Saturday or a Sunday) on
which dealings in Dollar deposits are carried out in the London interbank
market.
"Capital Lease Obligations" shall mean, for any Person, all
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obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards Board), and,
for purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP (including such
Statement No. 13).
"Capital Securities" shall mean preferred securities issued by a
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Subsidiary of the Company organized as a Delaware business trust that are
redeemable, at the option of such issuer, ten years or more after the issuance
thereof, which securities are guaranteed by the
Credit Agreement
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Company and the proceeds of which are invested in junior subordinated securities
of the Company.
"Category 1" shall mean a period when the ▇▇▇▇▇'▇ Rating is at or
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above A2 and the S&P Rating is at or above A; "Category 2" shall mean a period
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when the ▇▇▇▇▇'▇ Rating is at or above Baa1 and the S&P Rating is at or above
BBB+; "Category 3" shall mean a period when the ▇▇▇▇▇'▇ Rating is at or above
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Baa2 and the S&P Rating is at or above BBB; "Category 4" shall mean a period
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when the ▇▇▇▇▇'▇ Rating is at or above Baa3 and the S&P Rating is at
or above BBB-; "Category 5" shall mean a period when the ▇▇▇▇▇'▇ Rating is below
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Baa3 and the S&P Rating is below BBB-.
"Chase" shall mean The Chase Manhattan Bank.
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"Code" shall mean the Internal Revenue Code of 1986, as amended from
----
time to time.
"Combined Earnings" shall mean, for any period, the sum of the
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following: (a) consolidated earnings (calculated before income taxes, Interest
Expense and minority interest expense) of the Company and its Consolidated
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP) for such period plus depreciation and amortization (to the
----
extent deducted in determining such consolidated earnings) for such period plus
----
(b) Deferred Revenues (or, in the case of a Deferred Revenue deficit, minus an
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amount equal to such deficit) for such period.
"Company" shall mean The First American Financial Corporation, a
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California corporation.
"Consolidated Subsidiary" shall mean, for any Person, each Subsidiary
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of such Person (whether now existing or hereafter created or acquired) the
financial statements of which shall be (or should have been) consolidated with
the financial statements of such Person in accordance with GAAP.
"Continue", "Continuation" and "Continued" shall refer to the
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continuation pursuant to Section 2.08 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
"Convert", "Conversion" and "Converted" shall refer to a conversion
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pursuant to Section 2.08 hereof of one Type of Revolving Credit Loans into the
other Type of Revolving Credit Loans, which may be accompanied by the transfer
by a Revolving Credit
Credit Agreement
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Lender (at its sole discretion) of a Revolving Credit Loan from one Applicable
Lending Office to another.
"Default" shall mean an Event of Default or an event that with notice
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or lapse of time or both would become an Event of Default.
"Deferred Revenues" shall mean, with respect to the Company and its
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Consolidated Subsidiaries, for any fiscal period, the amount of revenue received
but not recognized (in accordance with GAAP) during such fiscal period minus the
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amount of revenue recognized (in accordance with GAAP) but not received during
such fiscal period.
"Dollars" and "$" shall mean lawful money of the United States of
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America.
"Effective Date" shall mean the date on which the conditions specified
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in Section 6 are satisfied (or waived in accordance with Section 11.04 hereof).
"Environmental Claim" shall mean, with respect to any Person, (a) any
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written notice, claim, demand or other written communication (collectively, a
"claim") by any other Person alleging or asserting such Person's liability for
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investigatory costs, cleanup costs, governmental response costs, damages to
natural resources or other Property, personal injuries, fines or penalties
arising out of, based on or resulting from (i) the presence, or Release into the
environment, of any Hazardous Material at any location, whether or not owned by
such Person, or (ii) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law. The term "Environmental Claim"
shall include, without limitation, any claim by any governmental authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and any claim by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence of Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.
"Environmental Laws" shall mean any and all present and future
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Federal, state, local and foreign laws, rules or regulations, and any orders or
decrees, in each case as now or hereafter in effect, relating to the regulation
or protection of human health, safety or the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals or toxic or hazardous substances or wastes into the indoor or outdoor
environment, including, without limitation, ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or toxic or
hazardous substances or wastes.
Credit Agreement
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"Equity Issuance" shall mean (a) any issuance or sale by the Company
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of (i) any capital stock, (ii) any warrants or options exercisable in respect of
capital stock (other than any warrants or options issued to directors, officers
or employees of the Company or any of its Subsidiaries in their capacity as such
and any capital stock of the Company issued upon the exercise of such warrants)
or (iii) any other security or instrument representing an equity interest (or
the right to obtain any equity interest) in the Company or (b) the receipt by
the Company of any contribution to its capital (whether or not evidenced by any
equity security).
"ERISA" shall mean the Employee Retirement Income Security Act of
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1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business that
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is a member of any group of organizations (i) described in Section 414(b) or (c)
of the Code of which the Company is a member and (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which the Company
is a member.
"ERISA Event" shall mean (a) any "reportable event", as defined in
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Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Company or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Company or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Company or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Company or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Company or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar Base Rate" shall mean, with respect to any Eurodollar Loan
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for any Interest Period therefor, the arithmetic mean (rounded upwards, if
necessary, to the nearest 1/16 of 1%) of the respective rates per annum quoted
by each Reference Bank at approximately 11:00 a.m. London time (or as soon
thereafter as practicable) on the date two Business Days prior to the first day
of such Interest Period for the offering by such Reference Bank to leading banks
in the London interbank market of Dollar deposits having a term comparable to
such
Credit Agreement
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Interest Period and in an amount comparable to the principal amount of the
Eurodollar Loan to be made by such Reference Bank for such Interest Period. If
any Reference Bank is not participating in any Eurodollar Loan during any
Interest Period therefor, the Eurodollar Base Rate for such Loan for such
Interest Period shall be determined by reference to the amount of the Loan that
such Reference Bank would have had outstanding had it been participating in such
Loan during such Interest Period.
"Eurodollar Loans" shall mean Revolving Credit Loans the interest
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rates on which are determined on the basis of rates referred to in the
definition of "Eurodollar Base Rate" in this Section 1.01.
"Eurodollar Rate" shall mean, for any Eurodollar Loan for any Interest
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Period therefor, a rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined by the Administrative Agent to be equal to the
Eurodollar Base Rate for such Loan for such Interest Period divided by 1 minus
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the Reserve Requirement for such Loan for such Interest Period.
"Event of Default" shall have the meaning assigned to such term in
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Section 9 hereof.
"Existing Lender" shall mean each Lender party to the Existing Credit
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Agreement.
"Existing Credit Agreement" has the meaning given to such term in the
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recitals to this Agreement.
"FAREISI" shall mean First American Real Estate Information Services,
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Inc., a California corporation and a Wholly Owned Subsidiary of the Company.
"FATICO" shall mean First American Title Insurance Company, a
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California corporation and a Wholly Owned Subsidiary of the Company.
"Federal Funds Rate" shall mean, for any day, the rate per annum
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(rounded upwards, if necessary, to the nearest 1/100 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 (a) if the day for which such rate is to
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be determined 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 (b) if such rate is not so
published for any Business Day, the
Credit Agreement
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Federal Funds Rate for such Business Day shall be the average rate charged to
Chase on such Business Day on such transactions as determined by the
Administrative Agent.
"First American Title & Trust Company" shall mean First American Title
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& Trust Company, an Oklahoma corporation and a Subsidiary of the Company.
"First American Trust" shall mean First American Trust Company, a
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California corporation and a Wholly Owned Subsidiary of the Company.
"First Credit Agreement" shall mean the Credit Agreement between the
----------------------
Company, the Lenders, and the Administrative Agent dated as of April 21, 1992
(as amended by Amendment No. 1 dated as of June 30, 1992, Amendment No. 2 dated
as of September 25, 1992 and Amendment No. 3 dated as of October 29, 1992),
pursuant to which term loans were made to the Company by the Lenders in the
aggregate principal amount of $65,000,000, which such Credit Agreement was
amended and restated by the Existing Credit Agreement.
"First Security Thrift" shall mean First Security Thrift Company, a
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California corporation and an indirect Subsidiary of FATICO.
"Fixed Rate" shall mean a rate per annum equal to 9.38%.
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"Fixed Rate Lender" shall mean any Lender from time to time holding
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the Fixed Rate Loan, including after giving effect to any assignment permitted
by Section 11.06 hereof.
"Fixed Rate Loan" shall mean the Loan made by the Fixed Rate Lender
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pursuant to the First Credit Agreement (as more fully described in Section
2.01(b)).
"Fixed Rate Note" shall mean the promissory note provided for by
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Section 2.07(b) hereof or any promissory note delivered in substitution or
exchange therefor, in each case as the same shall be modified and supplemented
and in effect from time to time.
"Funded Debt" shall mean, for any Person: (a) all Indebtedness for
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such Person that should be reflected on a balance sheet of such Person in
accordance with GAAP, (b) all Indebtedness of any other Person that should be
reflected on a balance sheet of such other Person in accordance with GAAP and
that is secured by a Lien on the Property of such Person, is supported by a
letter of credit issued for account of, or is Guaranteed by, such Person and (c)
all Capital Lease Obligations of such Person; provided that, Funded Debt shall
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include (i) the aggregate liquidation preference of all preferred securities
that are mandatorily redeemable, exchangeable or convertible into debt at the
option of the holder or redeemable at the option of the holder, less than ten
years after issue and (ii) the aggregate liquidation preference of all
Credit Agreement
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Capital Securities but only that portion of such aggregate liquidation
preference that is on such date equal to, or in excess of, 15% of Total
Capitalization on such date.
"GAAP" shall mean generally accepted accounting principles applied on
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a basis consistent with those which, in accordance with the last sentence of
Section 1.02(a) hereof, are to be used in making the calculations for purposes
of determining compliance with this Agreement.
"Governmental Authority" shall mean the government of the United
----------------------
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" shall mean a guarantee, an endorsement, a contingent
---------
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other distributions upon
the stock or equity interests of any Person, or an agreement to purchase, sell
or lease (as lessee or lessor) Property, products, materials, supplies or
services primarily for the purpose of enabling a debtor to make payment of such
debtor's obligations or an agreement to assure a creditor against loss,
including, without limitation, causing a bank or other financial institution to
issue a letter of credit or other similar instrument for the benefit of another
Person, but excluding endorsements for collection or deposit in the ordinary
course of business. The terms "Guarantee" and "Guaranteed" used as a verb shall
--------- ----------
have a correlative meaning. Notwithstanding the foregoing, the issuance by an
Insurance Company of title insurance shall not be deemed to be a "Guarantee".
"Hazardous Material" shall mean, collectively, (a) any petroleum or
------------------
petroleum products, flammable explosives, radioactive materials, asbestos in any
form that is or could become friable, urea formaldehyde foam insulation, and
transformers or other equipment that contain dielectric fluid containing
polychlorinated biphenyls (PCB's) in amounts exceeding 50 parts per million, (b)
any chemicals or other materials or substances which are now or hereafter become
defined as or included in the definition of "hazardous substances", "hazardous
wastes", "hazardous materials", "extremely hazardous wastes", "restricted
hazardous wastes", "toxic substances", "toxic pollutants", "contaminants",
"pollutants" or words of similar import under any Environmental Law and (c) any
other chemical or other material or substance, exposure to which is now or
hereafter prohibited, limited or regulated under any Environmental Law.
Credit Agreement
----------------
-11-
"Indebtedness" shall mean, for any Person: (a) obligations created,
------------
issued, assumed or incurred by such Person for borrowed money (whether by loan,
the issuance and sale of debt securities (including surplus debentures or notes
whether or not characterized as liabilities for the purposes of GAAP or SAP and
non-perpetual preferred stock requiring redemption or repurchase and any option
exercisable in respect thereof to the extent of such redemption or repurchase)
or the sale of Property to another Person subject to an understanding or
agreement, contingent or otherwise, to repurchase such Property from such
Person); (b) obligations of such Person to pay the deferred purchase or
acquisition price of Property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the
ordinary course of business so long as such trade accounts payable are payable
within 90 days of the date the respective goods are delivered or the respective
services are rendered; (c) Indebtedness of others secured by a Lien on the
Property of such Person, whether or not the respective indebtedness so secured
has been assumed by such Person; (d) obligations of such Person in respect of
letters of credit or similar instruments issued or accepted by banks and other
financial institutions for account of such Person; (e) Capital Lease Obligations
of such Person; and (f) Indebtedness of others Guaranteed by such Person.
"Index Debt" shall mean senior, unsecured, long-term indebtedness for
----------
borrowed money of the Company that is not guaranteed by any other Person or
subject to any other credit enhancement; provided that if such indebtedness is
--------
not rated by Moody's or S&P, "Index Debt" shall mean indebtedness in respect of
Capital Securities.
"Insurance Company" shall mean FATICO, First American Home Buyers
-----------------
Protection Corporation and any other Subsidiary of the Company which is a
licensed insurance company or a licensed underwritten title company.
"Interest Expense" shall mean, for any period, the sum, for the
----------------
Company and its Consolidated Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP), of the following: (a) all
interest in respect of Indebtedness accrued or capitalized during such period
(whether or not actually paid during such period) plus (b) the net amounts
----
payable (or minus the net amounts receivable) under Interest Rate Protection
-----
Agreements accrued during such period (whether or not actually paid or received
during such period).
"Interest Period" shall mean, with respect to any Eurodollar Loan,
---------------
each period commencing on the date such Eurodollar Loan is Converted from a Base
Rate Loan or the last day of the next preceding Interest Period for such Loan
and ending on the numerically corresponding day in the first, second, third or
sixth calendar month thereafter, as the Company may select as provided in
Section 4.05 hereof, except that each Interest Period that commences on the last
Business Day of a calendar month (or on any day for which there is no
Credit Agreement
----------------
-12-
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) no Interest Period may end after the
Revolving Credit Commitment Termination Date; (ii) each Interest Period that
would otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day (or, if such next succeeding Business Day falls in the
next succeeding calendar month, on the next preceding Business Day); and (iii)
no Interest Period shall have a duration of less than one month and, if the
Interest Period for any Eurodollar Loan would otherwise be a shorter period,
such Loan shall not be available hereunder for such period.
"Interest Rate Protection Agreement" shall mean, for any Person, an
----------------------------------
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more financial institutions providing for the transfer or
mitigation of interest risks either generally or under specific contingencies.
For purposes hereof, the "credit exposure" at any time of any Person under an
---------------
Interest Rate Protection Agreement to which such Person is a party shall be
determined at such time in accordance with the standard methods of calculating
credit exposure under similar arrangements as prescribed from time to time by
the Administrative Agent, taking into account potential interest rate movements
and the respective termination provisions and notional principal amount and term
of such Interest Rate Protection Agreement.
"Lenders" shall mean the Revolving Credit Lenders and the Fixed Rate
-------
Lender.
"Licenses" shall mean any licenses or certificates of authority from
--------
any Applicable Insurance Regulatory Authority, or permits or authorizations to
transact title insurance business.
"Lien" shall mean, with respect to any Property, any mortgage, lien,
----
pledge, charge, security interest or encumbrance of any kind in respect of such
Property. For purposes of this Agreement and the other Basic Documents, a
Person shall be deemed to own subject to a Lien any Property that it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
(other than an operating lease) relating to such Property.
"Loans" shall mean the Revolving Credit Loans and the Fixed Rate Loan.
-----
"Majority Revolving Credit Lenders" shall mean Revolving Credit
---------------------------------
Lenders holding at least 66-2/3% of the aggregate unpaid principal amount of the
Revolving Credit Loans and the unused Revolving Credit Commitments.
Credit Agreement
----------------
-13-
"Majority Lenders" shall mean (a) Lenders holding at least 66-2/3% of
----------------
the aggregate unpaid principal amount of the Fixed Rate Loan, Revolving Credit
Loans and the unused Revolving Credit Commitments; provided that, at any time
--------
that both the Revolving Credit Loans and the Fixed Rate Loan are outstanding,
then "Majority Lenders" under this clause (a) shall also require no fewer than
three Lenders or (b) for purposes of administering the Pledge Agreement pursuant
to Section 10 hereof if the Loans have been paid in full, Lenders holding at
least 66-2/3% of the aggregate Secured Obligations.
"Make-Whole Amount" shall mean, in connection with any acceleration of
-----------------
the Fixed Rate Loan pursuant to the last paragraph of Section 9 hereof, the
amount (but not less than zero) equal to the excess, if any, of
(a) the sum of the Present Values (as hereinafter defined) of (i) the
outstanding principal amount of the Fixed Rate Loan on the date of such
acceleration (assuming such principal amount will be paid on the originally
scheduled due date therefor) and (ii) the amount of interest that would
have been payable on each Quarterly Date on or after the date of such
acceleration on the principal amount of the Fixed Rate Loan (assuming such
principal amount and interest thereon are paid on the originally scheduled
due date therefor), over
----
(b) the outstanding principal amount of the Fixed Rate Loan on the
date of such acceleration.
For the purposes of this definition, "Present Value" shall be determined in
-------------
accordance with generally accepted financial practice on a quarterly basis at a
discount rate equal to the sum of the applicable Treasury Yield plus 1/2 of 1%;
----
and the "Treasury Yield" for such purposes shall be the yield of actively traded
--------------
United States Treasury securities having a maturity equal to the then-remaining
weighted average life to maturity (determined in accordance with generally
accepted financial practice) of the Fixed Rate Loan as determined by reference
to the most recent Federal Reserve Statistical Release H.15(519) (or, if such
Statistical Release is no longer published, any publicly available source of
similar market data) that became publicly available at least one Business Day
prior to the date of such acceleration; provided that if such weighted average
--------
life to maturity is not equal to the maturity of any actively traded United
States Treasury securities as set forth in said Statistical Release (or said
substitute source of market data), such yield shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the yields
of actively traded United States Treasury securities set forth in said
Statistical Release (or said substitute source of market data) having a maturity
closest to such weighted average life to maturity.
"Margin Stock" shall mean "margin stock" within the meaning of
------------
Regulation U and Regulation X.
Credit Agreement
----------------
-14-
"Material Adverse Effect" shall mean a material adverse effect on (a)
-----------------------
the Property, business, operations, financial condition, prospects, liabilities
or capitalization of the Company and its Subsidiaries taken as a whole, (b) the
ability of the Company to perform its obligations under any of the Basic
Documents, (c) the validity or enforceability of any of the Basic Documents, (d)
the rights and remedies of the Lenders and the Administrative Agent under any of
the Basic Documents or (e) the timely payment of the principal of or interest on
the Loans or other amounts payable in connection therewith.
"Material Subsidiary" shall mean, at any date: (a) each of the
-------------------
following: FATICO, First American Trust, First Security Thrift and FAREISI; and
(b) any other Subsidiary of the Company with (i) assets at such date with a net
book value in excess of $5,000,000 and (ii) total assets at such date in excess
of $10,000,000.
"Minority Stockholders Put Documents" shall mean (a) the Stock
-----------------------------------
Restriction Agreement dated May 3, 1983 among First American Title Guaranty
Holding Company, FATICO and the management-shareholders and outside-shareholders
named therein, (b) the letter agreement dated March 2, 1988 among ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. Wool,
First American Home Buyers Protection Corporation and FATICO, (c) the Financing
Agreement dated as of June 28, 1984 among FATICO, First American Home Buyers
Protection Corporation and each of the persons listed on Exhibit A thereto as
modified by the Amendment to Financing Agreement, dated as of March 29, 1985,
and (d) the stock purchase agreements entered into by First American Home Buyers
Protection Corporation, FATICO and certain employees of First American Home
Buyers Protection Corporation who are parties to stock option agreements entered
into pursuant to the First American Home Buyers Protection Corporation 1988 Non-
Qualified Stock Option Plan.
"Minority Stockholders Put Obligations" shall mean the respective
-------------------------------------
obligations of FATICO, First American Title Guaranty Holding Company and First
American Home Buyers Protection Corporation to buy back shares of capital stock
(whether for cash, Property, through issuance of a note or otherwise) from
minority stockholders of First American Title Guaranty Holding Company and First
American Home Buyers Protection Corporation, as the case may be, pursuant to
exercise by such minority stockholders of put options, all as provided in the
Minority Stockholders Put Documents in effect on the date hereof.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
-------
"▇▇▇▇▇'▇ Rating" shall mean the ▇▇▇▇▇'▇ rating in respect of the Index
--------------
Debt, provided that if such rating is in respect of Index Debt consisting of
--------
Capital Securities, "▇▇▇▇▇'▇ Rating" shall mean the rating that is one grade
higher than the rating of the Index Debt.
Credit Agreement
----------------
-15-
"Multiemployer Plan" shall mean a multiemployer plan defined as such
------------------
in Section 3(37) of ERISA to which contributions have been made by the Company
or any ERISA Affiliate at any time during the six calendar years immediately
preceding April 21, 1992 and which is covered by Title IV of ERISA.
"NAIC" shall mean the National Association of Insurance Commissioners.
----
"New Lender" shall mean each Lender which is party to this Agreement
----------
but is not party to the Existing Credit Agreement.
"Notes" shall mean the Revolving Credit Notes and the and the Fixed
-----
Rate Note, and any replacement or substitute notes received in exchange
therefore.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
----
entity succeeding to any or all of its functions under ERISA.
"Person" shall mean any individual, corporation, company, voluntary
------
association, partnership, joint venture, trust, unincorporated organization or
government (or any agency, instrumentality or political subdivision thereof).
"Plan" shall mean an employee benefit or other plan established or
----
maintained by the Company or any ERISA Affiliate and that is covered by Title IV
of ERISA, other than a Multiemployer Plan.
"Pledge Agreement" shall mean the Pledge Agreement dated as of April
----------------
27, 1992 between the Company and the Administrative Agent, as the same shall be
modified and supplemented and in effect from time to time.
"Post-Default Rate" shall mean, in respect of any principal of any
-----------------
Loan or any other amount under this Agreement, any Note or the Pledge Agreement
that is not paid when due (whether at stated maturity, by acceleration or
otherwise), a rate per annum during the period from and including the due date
to but excluding the date on which such amount is paid in full equal to 2% plus
----
the Base Rate as in effect from time to time plus the Applicable Margin for Base
----
Rate Loans; provided that, if the amount so in default is the principal of a
--------
Eurodollar Loan and the due date thereof is a day other than the last day of the
Interest Period therefor, the "Post-Default Rate" for such principal shall be,
for the period from and including such due date to but excluding the last day of
the Interest Period, 2% plus the interest rate for such Loan as provided in
----
Section 3.02(b) hereof and, thereafter, the rate provided for above in this
definition; and provided further that, with respect to the principal of the
-------- -------
Fixed Rate Loan or any other amount payable in connection with the Fixed Rate
Loan under this Agreement or under
Credit Agreement
----------------
-16-
the Fixed Rate Note, the "Post-Default Rate" shall be a rate equal to 2% plus
----
the Fixed Rate.
"Prime Rate" shall mean the rate of interest from time to time
----------
announced by Chase at the Principal Office as its prime commercial lending rate.
"Principal Office" shall mean the principal office of Chase, in New
----------------
York, New York, as is designated as such by Chase from time to time.
"Principal Payment Dates" shall mean the Principal Payment Dates as
-----------------------
provided for by Section 3.01.
"Property" shall mean any right or interest in or to property of any
--------
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Quarterly Dates" shall mean the 21st day of each January, April, July
---------------
and October, commencing with July 21, 1992; provided that if any such day is not
--------
a Business Day, then such Quarterly Date shall be the next succeeding Business
Day (unless such Business Day falls in a subsequent calendar month, in which
event such Quarterly Date shall be the next preceding Business Day).
"Reference Banks" shall mean Chase and Sanwa Bank California (or their
---------------
respective Applicable Lending Offices, as the case may be).
"Regulation A", "Regulation D", "Regulation U" and "Regulation X"
------------ ------------ ------------ ------------
shall mean, respectively, Regulation A, Regulation D, Regulation U and
Regulation X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in effect from time
to time.
"Regulatory Change" shall mean, with respect to any Lender, any change
-----------------
(in the case of a change affecting Eurodollar Loans, after the date hereof and,
in all other cases, after April 21, 1992) in Federal, state or foreign law or
regulations or the adoption or making (after such date) of any interpretation,
directive or request applying to a class of lenders including such Lender of or
under any Federal, state or foreign law or regulations (whether or not having
the force of law and whether or not failure to comply therewith would be
unlawful) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"Release" shall mean any release, spill, emission, leaking, pumping,
-------
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor
Credit Agreement
----------------
-17-
environment, including, without limitation, the movement of Hazardous Materials
through ambient air, soil, surface water, ground water, wetlands, land or
subsurface strata.
"Relevant 8-K Report" shall mean the Current Report filed with the
-------------------
Securities and Exchange Commission and the National Association of Securities
Dealers Automated Quotation System on Form 8-K as a result of the execution and
delivery of the Pledge Agreement.
"Reserve Requirement" shall mean, for any Interest Period for any
-------------------
Eurodollar Loan, the average maximum rate at which reserves (including, without
limitation, any marginal, supplemental or emergency reserves) are required to be
maintained during such Interest Period under Regulation D by member banks of the
Federal Reserve System in New York City with deposits exceeding one billion
Dollars against "Eurocurrency liabilities" (as such term is used in Regulation
D). Without limiting the effect of the foregoing, the Reserve Requirement shall
include any other reserves required to be maintained by such member banks by
reason of any Regulatory Change with respect to (i) any category of liabilities
that includes deposits by reference to which the Eurodollar Base Rate is to be
determined as provided in the definition of "Eurodollar Base Rate" in this
Section 1.01 or (ii) any category of extensions of credit or other assets that
includes Eurodollar Loans.
"Reserves" shall mean, for any Insurance Company, as at any date, the
--------
aggregate reserves for undetermined title losses of such Insurance Company
(which amount is shown at the date hereof on the most recent annual Statutory
Statement of such Insurance Company at page 3, line 1(b), column 1) as at the
last day of the fiscal year of such Insurance Company ending on or most recently
ended prior to such date.
"Revolving Credit Availability Period" shall mean the period from and
------------------------------------
including the Effective Date to but excluding the earlier of the Revolving
Credit Commitment Termination Date and the date of termination of the Revolving
Credit Commitments.
"Revolving Credit Commitment" shall mean, for each Revolving Credit
---------------------------
Lender, the obligation of such Lender to make Revolving Credit Loans in an
aggregate principal amount at any one time outstanding up to but not exceeding
the amount set forth opposite the name of such Lender on the signature pages
hereof under the caption "Revolving Credit Commitment" (as the same may be
reduced from time to time pursuant to Section 2.05 hereof). The aggregate
amount of the Revolving Credit Commitments is $75,000,000.
"Revolving Credit Commitment Termination Date" shall mean the fifth
--------------------------------------------
anniversary of the Effective Date, and if such date is not a Business Day, the
next preceding Business Day.
Credit Agreement
----------------
-18-
"Revolving Credit Lenders" shall mean the Lenders from time to time
------------------------
holding Revolving Credit Loans or unused Revolving Credit Commitments after
giving effect to any assignments thereof permitted by Section 11.06 hereof.
"Revolving Credit Loans" shall mean Loans made by the Revolving Credit
----------------------
Lenders, as more fully described in Section 2.01(a) hereto.
"Revolving Credit Notes" shall mean the promissory notes provided for
----------------------
by the second sentence of Section 2.07(a) hereof and all promissory notes
delivered in substitution or exchange therefor, in each case as the same shall
be modified and supplemented and in effect from time to time.
"S&P" shall mean Standard & Poor's.
---
"S&P Rating" shall mean the S&P rating in respect of the Index Debt,
----------
provided that if such rating is in respect of Index Debt consisting of Capital
--------
Securities, "S&P Rating" shall mean the rating that is one grade higher than the
rating of the Index Debt.
"Sale/Leaseback Transactions" shall have the meaning assigned to such
---------------------------
term in Section 8.16.
"SAP" shall mean, for any Insurance Company, the statutory accounting
---
procedures or practices required by the Applicable Insurance Regulatory
Authority applied on a basis consistent with those which, in accordance with the
last sentence of Section 1.02(a) hereof, are to be used in making the
calculations for purposes of determining compliance with certain terms of this
Agreement.
"Secured Obligations" shall have the meaning assigned to such term in
-------------------
the Pledge Agreement.
"Statutory Statement" shall mean, for any Insurance Company, for any
-------------------
fiscal year of such Insurance Company, the most recent annual statement required
to be filed with the Applicable Insurance Regulatory Authority and, for any
fiscal quarter of such Insurance Company, the quarterly statement required to be
filed with the Applicable Insurance Regulatory Authority, which annual and
quarterly statements shall be prepared in accordance with statutory accounting
practices or generally accepted accounting principles as specified by the
Applicable Insurance Regulatory Authority.
"Subsidiary" shall mean, for any Person, any corporation, partnership
----------
or other entity of which at least a majority of the securities or other
ownership interests having by the terms thereof ordinary voting power to elect a
majority of the board of directors or other
Credit Agreement
----------------
-19-
persons performing similar functions of such corporation, partnership or other
entity (irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, partnership or
other entity shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
such Person or one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person. "Wholly Owned Subsidiary" shall mean any
-----------------------
such corporation, partnership or other entity of which all of the equity
securities or other ownership interests (other than, in the case of a
corporation, directors' qualifying shares) are so owned or controlled.
"Tax Sharing Agreements" shall have the meaning assigned to such term
----------------------
in Section 7.09(b) hereof.
"Total Capitalization" shall mean, at any date, the sum of Total Debt
--------------------
plus Total Stockholders' Equity.
----
"Total Debt" shall mean, as at any date, the sum for the Company and
----------
its Consolidated Subsidiaries of all Funded Debt.
"Total Stockholders' Equity" shall mean at any date the aggregate
--------------------------
stockholders' equity (including minority interests in subsidiaries) for the
Company and its Consolidated Subsidiaries; provided that, the aggregate
--------
liquidation preference of Capital Securities shall be included in the
calculation of Total Stockholders' Equity only with respect to that portion of
such aggregate liquidation preference that is less than 15% of Total
Capitalization on such date; provided further that, for purposes of
----------------
determining compliance with Section 8.08, the definition of "Total Stockholders'
Equity" shall not include any amount with respect to Capital Securities.
"Type" shall have the meaning assigned to such term in Section 1.03
----
hereof.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as
--------------------
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
1.02 Accounting Terms and Determinations.
-----------------------------------
(a) Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to the
Lenders hereunder shall (unless otherwise disclosed to the Lenders in writing at
the time of delivery thereof in the manner described in subsection (b) below) be
prepared, in accordance with (in the case of the Company and its
Credit Agreement
----------------
-20-
Subsidiaries on a consolidated basis) generally accepted accounting principles
or (in the case of certain of the Insurance Companies) statutory accounting
practices, as the case may be, applied on a basis consistent with those used in
the preparation of the latest financial statements furnished to the Lenders
hereunder (which, prior to the delivery of the first financial statements (after
the date hereof) under Section 8.01 hereof, shall mean the financial statements
as at December 31, 1996 referred to in Section 7.02 hereof). All calculations
made for the purposes of determining compliance with this Agreement shall
(except as otherwise expressly provided herein) be made by application of (in
the case of the Company and its Subsidiaries on a consolidated basis) generally
accepted accounting principles or (in the case of certain of the Insurance
Companies) statutory accounting practices, as the case may be, applied on a
basis consistent with those used in the preparation of the latest annual or
quarterly financial statements furnished to the Lenders pursuant to Section 8.01
hereof (or, prior to the delivery of the first financial statements (after the
date hereof) under Section 8.01 hereof, used in the preparation of the financial
statements as at December 31, 1996 referred to in Section 7.02 hereof) unless
(i) the Company shall have objected to determining such compliance on such basis
at the time of delivery of such financial statements or (ii) the Majority
Lenders shall so object within 30 days after delivery of such financial
statements, in either of which events such calculations shall be made on a basis
consistent with those used in the preparation of the latest financial statements
as to which such objection shall not have been made (which, if objection is made
in respect of the first financial statements delivered under Section 8.01
hereof, shall mean the financial statements referred to in Section 7.02 hereof).
(b) The Company shall deliver to the Lenders at the same time as the
delivery of any annual or quarterly financial statement under Section 8.01
hereof (i) a description in reasonable detail of any material variation between
the application of accounting principles or practices employed in the
preparation of such statement and the application of accounting principles or
practices employed in the preparation of the next preceding annual or quarterly
financial statements as to which no objection has been made in accordance with
the last sentence of subsection (a) above and (ii) reasonable estimates of the
difference between such statements arising as a consequence thereof.
(c) The Company will not change the last day of its fiscal year from
December 31 of each year, or the last days of the first three fiscal quarters in
each of its fiscal years from March 31, June 30 and September 30 of each year,
respectively.
1.03 Types of Loans. Loans hereunder are distinguished by "Type".
--------------
The "Type" of a Loan refers to whether such Loan is a Base Rate Loan or a
Eurodollar Loan or a Fixed Rate Loan, each of which constitutes a Type.
Section 2. Revolving Credit Commitments, Loans, Notes and
----------------------------------------------
Prepayments.
-----------
Credit Agreement
----------------
-21-
2.01 Loans.
-----
(a) Revolving Credit Commitments. On the Effective Date, (i) the
----------------------------
"Revolving Credit Loans" (as defined in the Existing Credit Agreement) held by
the Existing Lenders under the Existing Credit Agreement shall automatically,
and without any action on the part of any Person, be designated as Revolving
Loans hereunder and each of the New Lenders (and each Existing Lender, if any,
whose relative proportion of Revolving Credit Commitments hereunder is
increasing over its relative proportion of "Revolving Credit Commitments" held
by it under the Existing Credit Agreement (each an "Increasing Existing
-------------------
Revolving Credit Lender")) shall, by assignments from the Existing Lenders, if
-----------------------
any, whose relative proportion of the Revolving Credit Commitments hereunder is
decreasing from its relative proportion of "Revolving Credit Commitments" held
by it under the Existing Credit Agreement (which assignments shall be deemed to
occur automatically on the Effective Date), acquire a portion of the Revolving
Credit Loans and Revolving Credit Commitments of the Existing Lenders so
designated in such amounts (and the Revolving Credit Lenders shall, through the
Administrative Agent, make such additional adjustments among themselves as shall
be necessary), (ii) each New Lender and each Increasing Existing Revolving
Credit Lender severally agrees, on the terms and conditions of this Agreement,
to make (on a non pro-rata basis) a revolving credit loan to the Company in
Dollars and/or (iii) the Company shall prepay the Revolving Credit Loans of the
Existing Lenders (on a non pro-rata basis) in such amounts, such that after
giving effect to such assignments and adjustments and such revolving credit
loans, the Revolving Credit Lenders shall hold the Revolving Loans hereunder
ratably in accordance with their respective Revolving Credit Commitments. As of
the Effective Date, all Interest Periods under the Existing Credit Agreement in
respect of the "Revolving Credit Loans" under and as defined in the Existing
Credit Agreement shall continue hereunder until the end of such Interest Periods
and not be terminated. All accrued and unpaid interest on the "Revolving Credit
Loans" held by the Existing Lenders under the Existing Credit Agreement as of
the Effective Date shall remain payable and be paid by the Company to the
respective Existing Lenders in accordance with Section 3.01 hereof as if such
Revolving Credit Loans were made hereunder.
Subject to the terms and conditions set forth herein and as of the
Effective Date, each Lender agrees to make Revolving Loans to the Company from
time to time during the Revolving Credit Availability Period in an aggregate
principal amount that will not result in (a) such Lender's Revolving Credit
Loans plus such Lender's unused Revolving Credit Commitments exceeding such
----
Lender's Revolving Credit Commitment or (b) the sum of the total Revolving
Credit Loans plus the sum of the total unused Revolving Credit Commitments
----
exceeding the total Revolving Credit Commitments. Within the foregoing limits
and subject to the terms and conditions set forth herein, the Company may
borrow, prepay and reborrow Revolving Credit Loans.
Credit Agreement
----------------
-22-
(b) Fixed Rate Loan. On April 21, 1992, the Fixed Rate Lender
---------------
agreed, on the terms and conditions of the First Credit Agreement, to make the
"Fixed Rate Loan" (as defined in the First Credit Agreement) to the Company in
Dollars in an amount up to but not exceeding the amount of the "Fixed Rate
Commitment" (as defined in the First Credit Agreement) and the Company hereby
confirms and acknowledges that on April 27, 1992, the Fixed Rate Lender made
such a term loan in an amount equal to the Fixed Rate Commitment and that, as a
result thereof, the "Fixed Rate Commitment" was terminated on such date. The
Company further hereby confirms and acknowledges that, as of the date hereof,
the aggregate outstanding principal amount of the Fixed Rate Loan is $6,140,000.
The Fixed Rate Loan may not be Converted into a Loan of any other Type.
2.02 Borrowings. The Company shall give the Administrative Agent
----------
(which shall promptly notify the Lenders) notice of any borrowing hereunder as
provided in Section 4.05 hereof. Not later than 1:00 p.m. New York time on the
date specified for the borrowing hereunder, each Revolving Credit Lender shall
make available the amount of the Revolving Credit Loan to be made by it on such
date to the Administrative Agent, at an account designated and maintained by the
Administrative Agent with Chase at the Principal Office, in immediately
available funds, for account of the Company. The amount so received by the
Administrative Agent shall be made available to the Company by depositing the
same, in immediately available funds, in an account of the Company, designated
by the Company, maintained with Chase at the Principal Office.
2.03 Changes of Revolving Credit Commitments.
---------------------------------------
(a) The Company has the right to terminate or reduce the aggregate
unused amount of the Revolving Credit Commitments; provided that (i) the Company
--------
give notice of each such termination or reduction as provided in Section 4.05
thereof and (ii) each partial reduction be in an aggregate amount at least equal
to $3,000,000 or in multiples of $500,000 in excess thereof.
(b) The Revolving Credit Commitments, once terminated or reduced, may
not be reinstated.
2.04 Commitment Fee. The Company shall pay to the Administrative
--------------
Agent for account of each Revolving Credit Lender a commitment fee on the daily
average unused amount of such Lender's Revolving Credit Commitment, for the
period from and including the date of this Agreement to but not including the
earlier of the date such Revolving Credit Commitment is terminated and the
Revolving Credit Commitment Termination Date, at a rate per annum equal to the
Applicable Margin. Accrued commitment fee is payable on each Quarterly Date and
on the earlier of the date the Revolving Credit Commitments are terminated and
the Revolving Credit Commitment Termination Date.
Credit Agreement
----------------
-23-
2.05 Lending Offices. The relevant Type of Loan made by each Lender
---------------
shall be maintained at such Lender's Applicable Lending Office for Loans of such
Type.
2.06 Several Obligations; Remedies Independent. The failure of any
-----------------------------------------
Lender to make the Loan to be made by it on the date specified therefor shall
not relieve any other Lender of its obligation to make its Loan on such date,
but neither any Lender nor the Administrative Agent shall be responsible for the
failure of any other Lender to make a Loan to be made by such other Lender, and
no Lender shall have any obligation to the Administrative Agent or any other
Lender for the failure by such Lender to make the Loan required to be made by
such Lender. The amounts payable by the Company at any time hereunder and under
the Notes to each Lender shall be a separate and independent debt and each
Lender shall be entitled to protect and enforce its rights arising out of this
Agreement and the Notes, and it shall not be necessary for any other Lender or
the Administrative Agent to consent to, or be joined as an additional party in,
any proceedings for such purposes.
2.07 Notes.
-----
(a) The Revolving Credit Commitment and Revolving Credit Loans of
each Lender shall be evidenced by a single promissory note of the Company
substantially in the form of Exhibit A-1 hereto, appropriately dated, in an
amount equal to the Revolving Credit Commitment of such Lender and otherwise
duly completed. Thereafter, the Revolving Credit Commitment of each Revolving
Credit Lender shall be evidenced by a single promissory note of the Company
substantially in the form of Exhibit A hereto, appropriately dated, payable to
such Lender in an amount equal to the amount of the Revolving Credit Commitment
held by such Lender on the Effective Date and otherwise duly completed.
(b) The Fixed Rate Loan made by the Fixed Rate Lender shall be
evidenced by a single promissory note of the Company substantially in the form
as previously agreed between the Fixed Rate Lender and the Borrower,
appropriately dated, payable to the Fixed Rate Lender or its designated nominee
in a principal amount equal to the amount of the Fixed Rate Loan and otherwise
duly completed.
(c) The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of the Loan made by each Lender to the Company, and each
payment made on account of the principal thereof, shall be recorded by such
Lender on its books and, prior to any transfer of the Note held by it, endorsed
by such Lender on the schedule attached to such Note or any continuation
thereof; provided that the failure of such Lender to make any such recordation
--------
or endorsement shall not affect the obligations of the Company to make a payment
when due of any amount owing hereunder or under such Note in respect of such
Loan.
Credit Agreement
----------------
-24-
(d) No Lender shall be entitled to have its Note subdivided, by
exchange for promissory notes of lesser denominations or otherwise, except in
connection with a permitted assignment of all or any portion of such Lender's
Loan and Note pursuant to Section 11.06(b) hereof.
2.08 Optional Prepayments and Conversions or Continuations of
--------------------------------------------------------
Revolving Credit Loans. Subject to Section 4.04 hereof, the Company shall have
----------------------
the right to prepay Revolving Credit Loans, or to Convert Revolving Credit Loans
of one Type into Revolving Credit Loans of the other Type or Continue Revolving
Credit Loans of one Type as Revolving Credit Loans of the same Type, at any time
or from time to time, provided that: (a) the Company shall give the
--------
Administrative Agent irrevocable notice of each such prepayment, Conversion or
Continuation as provided in Section 4.05 hereof (and, upon the date specified in
any such notice of prepayment, the amount to be prepaid shall become due and
payable hereunder); and (b) upon any prepayment or Conversion of Eurodollar
Loans other than on the last day of an Interest Period for such Loans the
Company shall pay any amounts owing under Section 5.05 hereof as a result of
such prepayment or Conversion. Notwithstanding the foregoing, and without
limiting the rights and remedies of the Revolving Credit Lenders under Section 9
hereof, in the event that any Event of Default shall have occurred and be
continuing, the Administrative Agent may (and at the request of the Majority
Revolving Credit Lenders shall) suspend the right of the Company to Convert any
Base Rate Loan into a Eurodollar Loan, or to Continue any Eurodollar Loan as a
Eurodollar Loan, in which event all Revolving Credit Loans shall be Converted
(on the last day(s) of the respective Interest Periods therefor) or Continued,
as the case may be, as Base Rate Loans. The Company may not prepay the Fixed
Rate Loan without the consent of the Fixed Rate Lender.
Section 3. Payments of Principal and Interest.
----------------------------------
3.01 Repayment of Loans.
------------------
(a) The Company hereby unconditionally promises to pay to the
Administrative Agent for the account of each Revolving Credit Lender the then
unpaid principal amount of each Revolving Loan on the Revolving Credit
Commitment Termination Date.
(b) The Company hereby unconditionally promises to pay to the
Administrative Agent for the account of each Fixed Rate Lender the principal of
the Fixed Rate Loan in eight installments payable on the Principal Payment Dates
as follows:
Credit Agreement
----------------
-25-
Principal Payment Date Amount of Installment
---------------------- ---------------------
October 21, 1997 $ 820,000
January 21, 1998 $ 820,000
April 21, 1998 $ 820,000
July 21, 1998 $ 820,000
October 21, 1998 $ 820,000
January 21, 1999 $ 820,000
April 21, 1999 $1,220,000
3.02 Interest. The Company hereby promises to pay to the
--------
Administrative Agent for account of each Lender interest on the unpaid principal
amount of each Loan made by such Lender for the period from and including the
date of such Loan to but excluding the date such Loan shall be paid in full, at
the following rates per annum:
(a) if such Loan is a Revolving Credit Loan, during such periods as
such Loan is a Base Rate Loan, the Base Rate (as in effect from time to time)
plus the Applicable Margin;
----
(b) if such Loan is a Revolving Credit Loan, during such periods as
such Loan is a Eurodollar Loan, for each Interest Period relating thereto, the
Eurodollar Rate for such Loan for such Interest Period plus the Applicable
----
Margin; and
(c) if such Loan is a Fixed Rate Loan, the Fixed Rate.
Notwithstanding the foregoing, the Company hereby promises to pay to the
Administrative Agent for account of each Lender interest at the applicable Post-
Default Rate on any principal of any Loan made by such Lender and on any other
amount payable by the Company hereunder or under the Note held by such Lender to
or for account of such Lender, which shall not be paid in full when due (whether
at stated maturity, by acceleration or otherwise), for the period from and
including the due date thereof to but excluding the date the same is paid in
full. Accrued interest on each Loan shall be payable (i) in the case of a Base
Rate Loan or the Fixed Rate Loan, quarterly on the Quarterly Dates, (ii) in the
case of a Eurodollar Loan, on the last day of each Interest Period therefor and,
if such Interest Period is longer than three months, at three month intervals
following the first day of such Interest Period, (iii) in the case of any Loan,
upon the payment or prepayment thereof (but only on the principal amount so paid
or prepaid) and (iv) in the case of any Revolving Credit Loan, upon the
Conversion of such Loan to a Revolving Credit Loan of the other Type (but only
on the principal amount so Converted), except that interest payable at the Post-
Default Rate shall be payable from time to time on demand. Promptly after the
determination of any interest rate provided for herein or
Credit Agreement
----------------
-26-
any change therein, the Administrative Agent shall give notice thereof to the
Lenders to which such interest is payable and to the Company.
Section 4. Payments; Pro Rata Treatment; Computations; Etc.
------------------------------------------------
4.01 Payments.
--------
(a) Except to the extent otherwise provided herein, all payments of
principal, interest and other amounts to be made by the Company under this
Agreement and the Notes, and, except to the extent otherwise provided therein,
all payments to be made by the Company under the Pledge Agreement, shall be made
in Dollars, in immediately available funds, without deduction, set-off or
counterclaim, to the Administrative Agent at an account designated and
maintained by the Administrative Agent with Chase at the Principal Office, not
later than 1:00 p.m. New York time on the date on which such payment shall
become due (each such payment made after such time on such due date to be deemed
to have been made on the next succeeding Business Day).
(b) The Company shall, at the time of making each payment under this
Agreement or any Note for account of any Lender, specify to the Administrative
Agent (which shall so notify the intended recipient(s) thereof) the relevant
Type of Loans or other amounts payable by the Company hereunder to which such
payment is to be applied, subject to Section 4.02 hereof (and in the event that
the Company fails to so specify, or if an Event of Default has occurred and is
continuing, the Administrative Agent may distribute such payment to the Lenders
for application in such manner as it or the Majority Lenders, subject to Section
4.02 hereof, may determine to be appropriate).
(c) Each payment received by the Administrative Agent under this
Agreement or any Note for account of any Lender shall be paid by the
Administrative Agent promptly to such Lender, in immediately available funds,
for account of such Lender's Applicable Lending Office for the Loan or other
obligation in respect of which such payment is made.
(d) If the due date of any payment under this Agreement or any Note
would otherwise fall on a day that is not a Business Day, such date shall be
extended to the next succeeding Business Day, and interest shall be payable for
any principal so extended for the period of such extension.
4.02 Pro Rata Treatment. Except to the extent otherwise provided
------------------
herein: (a) each payment of commitment fees under Section 2.04 hereof shall be
made for account of the Revolving Credit Lenders, and each termination or
reduction of the amount of the Revolving Credit Commitments under Section 2.03
shall be applied to the respective Revolving Credit Commitments of the Revolving
Credit Lenders, pro rata according to the amounts of their respective Revolving
Credit Commitments; (b) the Revolving Credit Loans shall have been made by the
relevant Revolving Credit Lenders pro rata according to the amounts of
Credit Agreement
----------------
-27-
their respective Revolving Credit Commitments; (b) the Revolving Credit Loans
shall have been made by the relevant Revolving Credit Lenders pro rata
according to the amounts of their respective Revolving Credit Commitments;
(c) the Conversion and Continuation of Revolving Credit Loans of a particular
Type (other than Conversions provided for by Section 5.04 hereof) shall be made
pro rata among the Revolving Credit Lenders according to the amounts of their
respective Revolving Credit Loans and the then current Interest Period for each
Eurodollar Loan shall be coterminous; (d) each payment or prepayment of
principal of Revolving Credit Loans by the Company shall be made for account of
the relevant Revolving Credit Lenders pro rata in accordance with the respective
unpaid principal amounts of such Revolving Credit Loans held by them; and (e)
each payment of interest on the Loans by the Company shall be made for account
of the Lenders pro rata in accordance with the amounts of interest on such Loans
then due and payable to the respective Lenders. Notwithstanding the foregoing,
each payment of principal or interest by the Company shall be made for the
account of the Lenders pro rata in accordance with the amounts of principal or
interest, as the case may be, then due and payable to the Lenders.
4.03 Computations. Interest on Eurodollar Loans shall be computed on
------------
the basis of a year of 360 days and actual days elapsed (including the first day
but excluding the last day) occurring in the period for which payable and
interest on Base Rate Loans, the Fixed Rate Loan and commitment fees shall be
computed on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed (including the first day but excluding the last day)
occurring in the period for which payable. Notwithstanding the foregoing, for
each day that the Base Rate is calculated by reference to the Federal Funds
Rate, interest on Base Rate Loans shall be computed on the basis of a year of
360 days and actual days elapsed.
4.04 Minimum Amounts. Except for Conversions or prepayments made
---------------
pursuant to Section 5.04 hereof, each borrowing of the principal of the Loans
and each Conversion and partial optional prepayment of principal of Revolving
Credit Loans shall be in an aggregate amount at least equal to $300,000 or in
multiples of $50,000 in excess thereof (Conversions or prepayments of or into
Revolving Credit Loans of different Types or, in the case of Eurodollar Loans,
having different Interest Periods at the same time hereunder shall be deemed
separate Conversions and prepayments for purposes of the foregoing, one for each
Type or Interest Period). Anything in this Agreement to the contrary
notwithstanding, the aggregate principal amount of Eurodollar Loans having the
same Interest Period shall be in an amount at least equal to $5,000,000 or in
multiples of $1,000,000 in excess thereof and, if any Eurodollar Loans would
otherwise be in a lesser principal amount for any period, such Revolving Credit
Loans shall be Base Rate Loans during such period.
4.05 Certain Notices. Notices by the Company to the Administrative
---------------
Agent of Conversions, Continuations and optional prepayments of Revolving Credit
Loans and of the duration of Interest Periods shall be irrevocable and shall be
effective only if received by the
Credit Agreement
----------------
-28-
Administrative Agent not later than 1:00 p.m. New York time on the number of
Business Days set forth below prior to the date of the relevant Conversion,
Continuation or prepayment or the first day of such Interest Period:
Number of
Business
Notice Days Prior
------ ----------
Prepayment of, or Conversions
into, Base Rate Loans two
Prepayment of,
Conversions into,
Continuations as, or
duration of Interest Period
for, Eurodollar Loans three
Each such notice of Conversion, Continuation or optional prepayment shall
specify the amount (subject to Section 4.04 hereof) and Type of the Revolving
Credit Loans to be Converted, Continued or prepaid, the date of Conversion,
Continuation or optional prepayment (which shall be a Business Day). Each such
notice of the duration of an Interest Period shall specify the Revolving Credit
Loans to which such Interest Period is to relate. The Administrative Agent
shall promptly notify the Lenders of the contents of each such notice. In the
event that the Company fails to select the Type of Revolving Credit Loan, or the
duration of any Interest Period for any Eurodollar Loan, within the time period
and otherwise as provided in this Section 4.05, such Loan (if outstanding as a
Eurodollar Loan) will be automatically Converted into a Base Rate Loan on the
last day of the then current Interest Period for such Loan or (if outstanding as
a Base Rate Loan) will remain as a Base Rate Loan.
4.06 Non-Receipt of Funds by the Administrative Agent. Unless the
------------------------------------------------
Administrative Agent shall have been notified by a Lender or the Company (the
"Payor") prior to the date on which the Payor is to make payment to the
------
Administrative Agent of (in the case of a Lender) the proceeds of a Loan to be
made by such Lender hereunder or (in the case of the Company) a payment to the
Administrative Agent for account of one or more of the Lenders hereunder (such
payment being herein called the "Required Payment"), which notice shall be
----------------
effective upon receipt, that the Payor does not intend to make the Required
Payment to the Administrative Agent, the Administrative Agent may assume that
the Required Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available to the
intended recipient(s) on such date; and, if the Payor has not in fact made the
Required Payment to the Administrative Agent, the recipient(s) of such payment
shall, on demand, repay to the Administrative Agent the amount so made available
Credit Agreement
----------------
-29-
together with interest thereon in respect of each day during the period
commencing on the date (the "Advance Date") such amount was so made available by
------------
the Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to the Federal Funds Rate for such day and, if
such recipient(s) shall fail promptly to make such payment, the Administrative
Agent shall be entitled to recover such amount, on demand, from the Payor,
together with interest as aforesaid, provided that if neither the recipient(s)
--------
nor the Payor shall return the Required Payment to the Administrative Agent
within three Business Days of the Advance Date, then, retroactively to the
Advance Date, the Payor and the recipient(s) shall each be obligated to pay
interest on the Required Payment as follows:
(i) if the Required Payment shall represent a payment to be made by
the Company to the Lenders, the Company and the recipient(s) shall jointly
and severally be obligated retroactively to the Advance Date to pay
interest in respect of the Required Payment at the applicable Post-Default
Rate (and, in case the recipient(s) shall return the Required Payment to
the Administrative Agent, without limiting the obligation of the Company
under Section 3.02 hereof to pay interest to such recipient(s) at the
applicable Post-Default Rate in respect of the Required Payment) and
(ii) if the Required Payment shall represent proceeds of a loan to be
made by the Lenders to the Company, the Payor and the Company shall jointly
and severally be obligated retroactively to the Advance Date to pay
interest in respect of the Required Payment at the rate of interest
provided for such Required Payment pursuant to Section 3.02 hereof (and, in
case the Company shall return the Required Payment to the Administrative
Agent, without limiting any claim the Company may have against the Payor in
respect of the Required Payment).
4.07 Sharing of Payments, Etc.
------------------------
(a) The Company agrees that, in addition to (and without limitation
of) any right of set-off, banker's lien or counterclaim a Lender may otherwise
have, each Lender shall be entitled upon and after the occurrence and during the
continuance of a Default, at its option, to offset balances held by it for
account of the Company at any of its offices, in Dollars or in any other
currency, against any principal of or interest on any of such Lender's Loans or
any other amount payable to such Lender hereunder, that is not paid when due
(regardless of whether such balances are then due to the Company), in which case
it shall promptly notify the Company and the Administrative Agent thereof,
provided that such Lender's failure to give such notice shall not affect the
--------
validity thereof.
(b) If any Lender shall obtain from the Company payment of any
principal of or interest on any Loan owing to it or payment of any other amount
under this Agreement or any other Basic Document through the exercise of any
right of set-off, banker's lien or similar right
Credit Agreement
----------------
-30-
or otherwise (other than from the Administrative Agent as provided herein), and,
as a result of such payment, such Lender shall have received a greater
percentage of the principal of or interest on the Loans or such other amounts
then due hereunder or thereunder by the Company to such Lender than the
percentage received by any other Lender, it shall promptly purchase from such
other Lenders participations in (or, if and to the extent specified by such
Lender, direct interests in) that portion of the Loans or such other amounts,
respectively, then due and payable to such other Lenders (or in interest due
thereon, as the case may be) in such amounts, and make such other adjustments
from time to time as shall be equitable, to the end that all the Lenders shall
share the benefit of such excess payment (net of any expenses that may be
incurred by such Lender in obtaining or preserving such excess payment) pro rata
in accordance with the unpaid principal of and/or interest on the Loans or such
other amounts, respectively, then due and payable to each of the Lenders. To
such end all the Lenders shall make appropriate adjustments among themselves (by
the resale of participations sold or otherwise) if such payment is rescinded or
must otherwise be restored.
(c) The Company agrees that any Lender so purchasing such a
participation (or direct interest) may exercise all rights of set-off, banker's
lien or similar rights with respect to such participation as fully as if such
Lender were a direct holder of Loans or other amounts (as the case may be) owing
to such Lender in the amount of such participation.
(d) Nothing contained herein shall require any Lender to exercise any
such right or shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of the Company. If, under any applicable bankruptcy, insolvency or
other similar law, any Lender receives a secured claim in lieu of a set-off to
which this Section 4.07 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Lenders entitled under this Section 4.07 to share in the
benefits of any recovery on such secured claim.
Section 5. Yield Protection, Etc.
---------------------
5.01 Additional Costs.
----------------
(a) The Company shall pay directly to each Revolving Credit Lender
from time to time such amounts as such Revolving Credit Lender may determine to
be necessary to compensate such Revolving Credit Lender for any costs that such
Revolving Credit Lender determines are attributable to its maintaining of any
Eurodollar Loans or its obligation to maintain any Eurodollar Loans hereunder,
or any reduction in any amount receivable by such Revolving Credit Lender
hereunder in respect of any of such Loans or such obligation (such increases in
costs and reductions in amounts receivable being herein called "Additional
----------
Costs"), resulting from any Regulatory Change that:
-----
Credit Agreement
----------------
-31-
(i) changes the basis of taxation of any amounts payable to such
Revolving Credit Lender under this Agreement or its Note in respect of any
of such Loans (other than any change in the rate at which taxes imposed on
or measured by the overall net income or capital of such Revolving Credit
Lender or of its Applicable Lending Office for any of such Loans by the
jurisdiction in which such Revolving Credit Lender has its principal office
or such Applicable Lending Office are levied); or
(ii) imposes or modifies any reserve, special deposit or similar
requirements (other than the Reserve Requirement utilized in the
determination of the Eurodollar Rate for such Loan) relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, such Revolving Credit Lender (including, without
limitation, any of such Loans or any deposits referred to in the definition
of "Eurodollar Base Rate" in Section 1.01 hereof), or any commitment of
such Revolving Credit Lender; or
(iii) affects any Revolving Credit Lender or the interbank Eurodollar
market or the position of any Revolving Credit Lender in such market.
If any Revolving Credit Lender requests compensation from the Company under this
Section 5.01(a), the Company may, by notice to such Revolving Credit Lender
(with a copy to the Administrative Agent), suspend the obligation of such
Revolving Credit Lender thereafter to Continue Eurodollar Loans, or to Convert
Base Rate Loans into Eurodollar Loans, until the Regulatory Change giving rise
to such request ceases to be in effect (in which case the provisions of Section
5.04 hereof shall be applicable), provided that such suspension shall not affect
--------
the right of such Revolving Credit Lender to receive the compensation so
requested.
(b) Without limiting the effect of the provisions of paragraph (a) of
this Section 5.01, in the event that, by reason of any Regulatory Change, any
Revolving Credit Lender either (i) incurs Additional Costs based on or measured
by the excess above a specified level of the amount of a category of deposits or
other liabilities of such Revolving Credit Lender that includes deposits by
reference to which the interest rate on Eurodollar Loans is determined as
provided in this Agreement or a category of extensions of credit or other assets
of such Revolving Credit Lender that includes Eurodollar Loans or (ii) becomes
subject to restrictions on the amount of such a category of liabilities or
assets that it may hold, then, if such Revolving Credit Lender so elects by
notice to the Company (with a copy to the Administrative Agent), the obligation
of such Revolving Credit Lender to Continue, or to Convert Base Rate Loans into,
Eurodollar Loans hereunder shall be suspended until such Regulatory Change
ceases to be in effect (in which case the provisions of Section 5.04 hereof
shall be applicable).
(c) Without limiting the effect of the foregoing provisions of this
Section 5.01 (but without duplication), the Company shall pay directly to each
Lender from time to time on
Credit Agreement
----------------
-32-
request such amounts as such Lender may determine to be necessary to compensate
such Lender (or, without duplication, the bank holding company of which such
Lender is a subsidiary) for any additional costs that it determines are
attributable to the maintenance by such Lender (or, subject to Section
5.01(b)(ii) hereof, any Applicable Lending Office or such bank holding company)
of capital in respect of its Loans, pursuant to any law or regulation or any
interpretation, directive or request (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful) of any court or
governmental or monetary authority (i) following any Regulatory Change or (ii)
implementing any risk-based capital guideline or other requirement (whether or
not having the force of law and whether or not the failure to comply therewith
would be unlawful) heretofore or hereafter issued by any government or
governmental or supervisory authority implementing at the national level the
Basel Accord (including, without limitation, the Final Risk-Based Capital
Guidelines of the Board of Governors of the Federal Reserve System (12 C.F.R.
Part 208, Appendix A; ▇▇ ▇.▇.▇. ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇) and the Final Risk-Based
Capital Guidelines of the Office of the Comptroller of the Currency (12 C.F.R.
Part 3, Appendix A)). Such compensation shall include, without limitation, an
amount equal to any reduction of the rate of return on assets or equity of such
Lender (or any Applicable Lending Office or such bank holding company) to a
level below that which such Lender (or any Applicable Lending Office or such
bank holding company) could have achieved but for such law, regulation,
interpretation, directive or request. For purposes of this Section
5.01(c), "Basel Accord" shall mean the proposals for risk-based capital
------------
framework described by the Basel Committee on Banking Regulations and
Supervisory Practices in its paper entitled "International Convergence of
Capital Measurement and Capital Standards" dated July 1988, as amended, modified
and supplemented and in effect from time to time or any replacement thereof.
(d) Each Lender shall notify the Company of any event entitling such
Lender to compensation under paragraph (a) or (c) of this Section 5.01 as
promptly as practicable, but in any event within 45 days, after such Lender
obtains actual knowledge thereof; provided that (i) if any Lender fails to give
--------
such notice within 45 days after it obtains actual knowledge of such an event,
such Lender shall, with respect to compensation payable pursuant to this Section
5.01 in respect of any costs resulting from such event, only be entitled to
payment under this Section 5.01 for costs incurred from and after the date 45
days prior to the date that such Lender does give such notice and (ii) each
Lender will designate a different Applicable Lending Office for the Loans of
such Lender affected by such event if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the sole opinion of
such Lender, be disadvantageous to such Lender, except that such Lender shall
have no obligation to designate an Applicable Lending Office located in the
United States of America. Each Lender will furnish to the Company a certificate
setting forth the basis and amount of each request by such Lender for
compensation under paragraph (a) or (c) of this Section 5.01. Determinations and
allocations by any Lender for purposes of this Section 5.01 of the effect of any
Regulatory Change pursuant to paragraph (a) or (b) of this Section 5.01, or
Credit Agreement
----------------
-33-
the effect of capital maintained pursuant to paragraph (c) of this Section 5.01,
on its costs or rate of return of maintaining Loans or its obligation to make
Loans, or on amounts receivable by it in respect of Loans or its obligation to
make Loans, and of the amounts required to compensate such Lender under this
Section 5.01, shall be conclusive, provided that such determinations and
--------
allocations are made on a reasonable basis.
5.02 Limitation on Types of Revolving Credit Loans. Anything herein
---------------------------------------------
to the contrary notwithstanding, if, on or prior to the determination of any
Eurodollar Base Rate for any Interest Period:
(a) the Administrative Agent determines, which determination shall be
conclusive, that quotations of interest rates for the relevant deposits
referred to in the definition of "Eurodollar Base Rate" in Section 1.01
hereof are not being provided in the relevant amounts or for the relevant
maturities for purposes of determining rates of interest for Eurodollar
Loans as provided herein; or
(b) the Majority Revolving Credit Lenders determine, which
determination shall be conclusive, and notify the Administrative Agent that
the relevant rates of interest referred to in the definition of "Eurodollar
Base Rate" in Section 1.01 hereof upon the basis of which the rate of
interest for Eurodollar Loans for such Interest Period is to be determined
are not likely adequately to cover the cost to such Revolving Credit
Lenders of making or maintaining Eurodollar Loans for such Interest Period;
then the Administrative Agent shall give the Company and each Revolving Credit
Lender prompt notice thereof and, so long as such condition remains in effect,
the Revolving Credit Lenders shall be under no obligation to Continue Eurodollar
Loans or to Convert Base Rate Loans into Eurodollar Loans, and the Company
shall, on the last day(s) of the then current Interest Period(s) for the
outstanding Eurodollar Loans, either prepay such Loans or Convert such Loans
into Base Rate Loans in accordance with Section 2.08 hereof.
5.03 Illegality. Notwithstanding any other provision of this
----------
Agreement, in the event that it becomes unlawful for any Revolving Credit Lender
or its Applicable Lending Office to honor its obligation to make or maintain
Eurodollar Loans hereunder, then such Revolving Credit Lender shall promptly
notify the Company thereof (with a copy to the Administrative Agent) and such
Revolving Credit Lender's obligation to Continue, or to Convert Loans of any
other Type into, Eurodollar Loans shall be suspended until such time as such
Revolving Credit Lender may again make and maintain Eurodollar Loans (in which
case the provisions of Section 5.04 hereof shall be applicable).
5.04 Treatment of Affected Loans. If the obligation of any Revolving
---------------------------
Credit Lender to Continue, or to Convert Base Rate Loans into, Eurodollar Loans
shall be suspended
Credit Agreement
----------------
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pursuant to Section 5.01 or 5.03 hereof, such Revolving Credit Lender's
Eurodollar Loans shall be automatically Converted into Base Rate Loans on the
last day(s) of the then current Interest Period(s) for Eurodollar Loans (or, in
the case of a Conversion required by Section 5.01(b) or 5.03 hereof, on such
earlier date as such Revolving Credit Lender may specify to the Company with a
copy to the Administrative Agent) and, unless and until such Revolving Credit
Lender gives notice as provided below that the circumstances specified in
Section 5.01 or 5.03 hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Revolving Credit Lender's Eurodollar
Loans have been so Converted, all payments and prepayments of principal
that would otherwise be applied to such Revolving Credit Lender's
Eurodollar Loans shall be applied instead to its Base Rate Loans; and
(b) all Loans that would otherwise be Continued by such Revolving
Credit Lender as Eurodollar Loans shall be Continued instead as Base Rate
Loans, and all Base Rate Loans of such Revolving Credit Lender that would
otherwise be Converted into Eurodollar Loans shall remain as Base Rate
Loans.
If such Revolving Credit Lender gives notice to the Company with a copy to the
Administrative Agent that the circumstances specified in Section 5.01 or 5.03
hereof that gave rise to the Conversion of such Revolving Credit Lender's
Eurodollar Loans pursuant to this Section 5.04 no longer exist (which such
Revolving Credit Lender agrees to do promptly upon such circumstances ceasing to
exist) at a time when Eurodollar Loans made by other Revolving Credit Lenders
are outstanding, such Revolving Credit Lender's Base Rate Loans shall be
automatically Converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Eurodollar Loans, to the extent necessary so
that, after giving effect thereto, all Loans held by the Revolving Credit
Lenders holding Eurodollar Loans and by such Revolving Credit Lender are held in
accordance with their respective pro rata shares of the outstanding Revolving
Credit Loans (as to principal amounts, Types and Interest Periods).
5.05 Compensation. The Company shall pay to the Administrative Agent
------------
for account of each Revolving Credit Lender, upon the request of such Revolving
Credit Lender through the Administrative Agent, such amount or amounts as shall
be sufficient (in the reasonable opinion of such Revolving Credit Lender) to
compensate it for any loss, cost or expense that such Revolving Credit Lender
determines is attributable to any payment, mandatory or optional prepayment or
Conversion of a Eurodollar Loan made by such Revolving Credit Lender for any
reason (including, without limitation, the acceleration of the Loans pursuant to
Section 9 hereof) on a date other than the last day of the Interest Period for
such Loan. Without limiting the effect of the preceding sentence, such
compensation shall include an amount equal to the excess, if any, of (i) the
amount of interest that otherwise would have accrued on the principal amount so
paid, prepaid or Converted for the period from the
Credit Agreement
----------------
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date of such payment, prepayment or Conversion to the last day of the then
current Interest Period for such Loan at the applicable rate of interest for
such Loan provided for herein over (ii) the amount of interest that otherwise
would have accrued on such principal amount at a rate per annum equal to the
interest component of the amount such Revolving Credit Lender would have bid in
the London interbank market for Dollar deposits of leading banks in amounts
comparable to such principal amount and with maturities comparable to such
period (as reasonably determined by such Revolving Credit Lender).
5.06 U.S. Taxes.
----------
(a) The Company agrees to pay to each Lender that is not a U.S.
Person such additional amounts as are necessary in order that the net payment of
any amount due to such non-U.S. Person hereunder after deduction for or
withholding in respect of any U.S. Tax imposed with respect to such payment (or
in lieu thereof, payment of such U.S. Tax by such non-U.S. Person), will not be
less than the amount stated herein to be then due and payable, provided that the
--------
foregoing obligation to pay such additional amounts shall not apply:
(i) to any payment to a Lender hereunder unless such Lender was, on
April 21, 1992 (or on the date it becomes a Lender as provided in Section
11.06(b) hereof) and on the date of any change in the Applicable Lending
Office of such Lender, either entitled to submit a Form 1001 (relating to
such Lender and entitling it to a complete exemption from withholding on
all interest to be received by it hereunder in respect of the Loans) or
Form 4224 (relating to all interest to be received by such Lender hereunder
in respect of the Loans), or
(ii) to any U.S. Tax imposed solely by reason of the failure by such
non-U.S. Person to comply with applicable certification, information,
documentation or other reporting requirements concerning the nationality,
residence, identity or connections with the United States of America of
such non-U.S. Person if such compliance is required by statute or
regulation of the United States of America as a precondition to relief or
exemption from such U.S. Tax.
For the purposes of this Section 5.06(a), (w) "Form 1001" shall mean Internal
---------
Revenue Service Form 1001 (Ownership, Exemption, or Reduced Rate Certificate) of
the Department of the Treasury of the United States of America, (x) "Form 4224"
---------
shall mean Internal Revenue Service Form 4224 (Exemption from Withholding of Tax
on Income Effectively Connected with the Conduct of a Trade or Business in the
United States) of the Department of the Treasury of the United States of America
(or in relation to either such Form such successor and related forms as may from
time to time be adopted by the relevant taxing authorities of the United States
of America to document a claim to which such Form relates), (y) "U.S. Person"
-----------
shall have the meaning set forth in Section 7701(a)(30) of the Code and (z)
"U.S. Taxes" shall
----------
Credit Agreement
----------------
-36-
mean any present or future tax, assessment or other charge or levy imposed by or
on behalf of the United States of America or any taxing authority thereof or
therein.
(b) Within 30 days after paying any amount to the Administrative
Agent or any Lender from which it is required by law to make any deduction or
withholding, and within 30 days after it is required by law to remit such
deduction or withholding to any relevant taxing or other authority, the Company
shall deliver to the Administrative Agent for delivery to such non-U.S. Person
evidence satisfactory to such Person of such deduction, withholding or payment
(as the case may be).
5.07 Replacement of a Lender. Anything in this Agreement to the
-----------------------
contrary notwithstanding, in the event that (and for so long as) any Lender is
subject to a conservatorship or a receivership with, or is otherwise directly or
indirectly under the control of, the Federal Deposit Insurance Corporation (or
any successor thereto) or the Resolution Trust Company (or any successor
thereto), then unless a Default shall have occurred and be continuing, the
Company may designate another lender willing to purchase such Lender's Loan and
Note and reasonably acceptable to the Administrative Agent (such lender being
herein called a "Replacement Lender") to purchase the Loan and Note of such
------------------
Lender, as the case may be, and such Lender's rights hereunder, for a purchase
price equal to the outstanding principal amount of the Loan and Note payable to
such Lender plus any accrued but unpaid interest on such Loan and Note, and upon
such purchase and sale (which such Lender shall promptly complete), and subject
to the execution and delivery to the Administrative Agent by the Replacement
Lender of documentation reasonably satisfactory to the Administrative Agent
(pursuant to which the Replacement Lender shall assume the obligations of such
original Lender under this Agreement), the Replacement Lender shall succeed to
the rights and obligations of such Lender hereunder and such Lender shall no
longer be a party hereto or have any rights hereunder.
Section 6. Conditions Precedent. The effectiveness of the Amendment
--------------------
and Restatement (except for Sections 11.03 and 11.07 hereof and the definitions
ancillary thereto) is subject to the receipt by the Administrative Agent of the
following documents and evidence, each of which shall be satisfactory to the
Administrative Agent (and to the extent specified below, to each Lender) in form
and substance:
(a) Corporate Documents. A certificate of the Secretary or an
-------------------
Assistant Secretary of the Company, dated the Effective Date and certifying
(A) that attached thereto is a true and complete copy of the articles of
incorporation of the Company as amended and in effect at all times from the
date of such certification, (B) that attached thereto is a true and
complete copy of the by-laws of the Company as amended and in effect at all
times from the date on which the resolutions referred to in clause (C)
below were adopted to and including the date of such certificate, (C) that
attached thereto is a
Credit Agreement
----------------
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true and complete copy of resolutions duly adopted by the board of
directors of the Company authorizing the execution, delivery and
performance of the Amendment and Restatement and the Revolving Credit
Notes, and that such resolutions have not been modified, rescinded or
amended and are in full force and effect, and (D) as to the incumbency and
specimen signature of each officer of the Company executing the Amendment
and Restatement and the Revolving Credit Notes and each other document to
be delivered by the Company from time to time in connection therewith (and
the Administrative Agent and each Lender may conclusively rely on such
certificate until it receives notice in writing from the Company);
(b) Officer's Certificate. A certificate of a senior officer of the
---------------------
Company, dated the Effective Date, to the effect set forth in clauses (a)
and (b) of the last paragraph of this Section 6.
(c) Opinion of Counsel to the Company. An opinion, dated the
---------------------------------
Effective Date, of ▇▇▇▇▇ ▇. ▇▇▇▇▇, general counsel of the Company,
substantially in the form of Exhibit B hereto and covering such other
matters as the Administrative Agent or any Lender may reasonably request
(and the Company hereby instructs such counsel to deliver such opinion to
the Lenders and the Administrative Agent).
(d) Revolving Credit Notes. The Revolving Credit Notes, duly
----------------------
completed and executed (and the Existing Lenders shall promptly return to
the Company the notes executed in connection with the Existing Credit
Agreement).
(e) Other Documents. Such other documents as the Administrative
---------------
Agent or any Lender or special New York counsel to Chase may reasonably
request.
The effectiveness of the Amendment and Restatement (except for Sections 11.03
and 11.07 hereof and the definitions ancillary thereto) is also subject to the
payment by the Company of such fees as the Company shall have agreed to pay or
deliver to any Lender or the Administrative Agent in connection herewith,
including, without limitation, the reasonable fees and expenses of Milbank,
Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special New York counsel to Chase in connection with the
negotiation, preparation, execution and delivery of this Amendment and
Restatement and the other Basic Documents (to the extent that statements for
such fees and expenses have been delivered to the Company).
The effectiveness of the Amendment and Restatement (except for
Sections 11.03 and 11.07 hereof and the definitions ancillary thereto) is
subject to the further conditions precedent that, both immediately prior to and
on the Effective Date: (a) no Default shall have occurred and be continuing; and
(b) the representations and warranties made by the Company in Section 7 hereof,
and in each of the other Basic Documents, shall be true and complete on
Credit Agreement
----------------
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and as of the Effective Date with the same force and effect as if made on and as
of such date (or, if any such representation or warranty is expressly stated to
have been made as of a specific date, as of such specific date).
Section 7. Representations and Warranties. The Company represents
------------------------------
and warrants to the Lenders that:
7.01 Corporate Existence. Each of the Company and its Material
-------------------
Subsidiaries: (a) is a corporation, partnership or other entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization; (b) has all requisite corporate or other power, and has all
material governmental licenses, authorizations, consents and approvals necessary
to own its assets and carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business and is in good standing in all
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify could have a Material
Adverse Effect.
7.02 Financial Condition.
-------------------
(a) The Company has heretofore furnished to the Lenders its
consolidated and consolidating balance sheet and statements of income,
stockholders equity and cash flows (i) as of and for the fiscal year ended
December 31, 1996, reported on by Price Waterhouse, independent public
accountants, and (ii) as of and for the fiscal quarter and the portion of the
fiscal year ended March 31, 1997, certified by its chief financial officer.
Such financial statements present fairly, in all material respects, the
financial position and results of operations and cash flows of the Company and
its consolidated Subsidiaries as of such dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments and the absence of
footnotes in the case of the statements referred to in clause (ii) above.
(b) The Company has heretofore furnished to each of the Lenders the
Statutory Statements for the year ended December 31, 1996 of each Insurance
Company that is a Material Subsidiary and that is required by any Applicable
Insurance Regulatory Authority to file such Statutory Statements. Such
Statutory Statements have been prepared in accordance with statutory accounting
practices and filed with the Applicable Insurance Regulatory Authorities, and
fairly present the financial condition of such Insurance Company as at said date
and its results of operations for the fiscal year ended on said date in
accordance with statutory accounting practices.
(c) The Company has heretofore furnished to each of the Lenders
consolidated balance sheets of each Material Subsidiary which is not an
Insurance Company described in paragraph (b) above and its consolidated
Subsidiaries as at December 31, 1996, and the related consolidated statements of
income, stockholders' equity and cash flow of such Material
Credit Agreement
----------------
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Subsidiary and its consolidated Subsidiaries for its fiscal year ended on said
date. All such financial statements are complete and correct and fairly present
the consolidated financial condition of such Material Subsidiary and its
Consolidated Subsidiaries as at the applicable date and the consolidated results
of their operations for the fiscal year ended on said date, all in accordance
with generally accepted accounting principles and practices applied on a
consistent basis.
(d) Since December 31, 1996, there has been no material adverse
change in the business, assets, operations, prospects or condition, financial or
otherwise, of the Company and its Subsidiaries, taken as a whole.
(e) Set forth on Schedule II hereto is a list of all Liens (other
than Liens created pursuant to the Pledge Agreement) of the Company and its
Subsidiaries existing on the date hereof, to the extent any such Lien secures
Indebtedness in an aggregate principal or face amount which equals or exceeds
(or may equal or exceed) $5,000,000. Liens of the Company and its Consolidated
Subsidiaries existing on the date hereof and not set forth on Schedule II secure
Indebtedness in an aggregate principal or face amount not exceeding $30,000,000.
(f) Set forth on Schedule III hereto is a list of all Indebtedness
(other than Indebtedness created pursuant to this Agreement) of the Company and
its Subsidiaries on the date hereof, to the extent that any such Indebtedness
has an aggregate principal or face amount which equals or exceeds (or may equal
or exceed) $5,000,000. Indebtedness of the Company and its Consolidated
Subsidiaries existing on the date hereof does not exceed an aggregate principal
or face amount of $165,000,000.
7.03 Litigation. There are no legal or arbitral proceedings, or any
----------
proceedings by or before any governmental or regulatory authority or agency, now
pending or (to the knowledge of the Company) threatened against the Company or
any of its Subsidiaries which, if adversely determined could have a Material
Adverse Effect.
7.04 No Breach. None of the execution and delivery of this Agreement
---------
and the Notes, the consummation of the transactions herein and therein
contemplated or compliance with the terms and provisions hereof and thereof will
conflict with or result in a breach of, or require any consent under, the
articles of incorporation or by-laws of the Company, or any applicable law or
regulation, or any applicable order, writ, injunction or decree of any court or
governmental authority or agency, or any agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which any of them or any of
their Property is bound or to which any of them is subject, or constitute a
default under any such agreement or instrument, or (except for the Liens created
pursuant to the Pledge Agreement) result in the creation or imposition of any
Lien upon any Property of the Company or any of its Subsidiaries pursuant to the
terms of any such agreement or instrument.
Credit Agreement
----------------
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7.05 Action. The Company has all necessary corporate power,
------
authority and legal right to execute, deliver and perform its obligations under
each of the Basic Documents; the execution, delivery and performance by the
Company of each of the Basic Documents have been duly authorized by all
necessary corporate action on its part (including, without limitation, any
required shareholder approvals); and each of this Agreement, the Pledge
Agreement and the Notes has been duly and validly executed and delivered by the
Company and constitutes its legal, valid and binding obligation, enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws of general applicability affecting the enforcement of creditors' rights.
7.06 Approvals. Except for the Relevant 8-K Report which was filed
---------
by the Company within fifteen days following its execution and delivery of the
Pledge Agreement, no authorizations, approvals or consents of, and no filings or
registrations with, any governmental or regulatory authority or agency, or any
securities exchange, are necessary for the execution, delivery or performance by
the Company of the Basic Documents or for the legality, validity or
enforceability hereof or thereof; provided, however, that the enforceability of
--------
the remedies contained in the Pledge Agreement is subject to compliance by the
Administrative Agent (or any Person acquiring rights from the Administrative
Agent) with the provisions of Section 4.06 thereof.
7.07 Use of Credit. Neither the Company nor any of its Subsidiaries
-------------
is engaged principally, or as one of its important activities, in the business
of extending credit for the purpose, whether immediate, incidental or ultimate,
of buying or carrying Margin Stock, and no part of the proceeds of any extension
of credit hereunder will be used to buy or carry any Margin Stock.
7.08 ERISA. No ERISA Event has occurred or is reasonably likely to
-----
occur that, when taken together with all other such ERISA Events for which
liability is reasonably likely to occur, could reasonably be expected to result
in a Material Adverse Effect.
7.09 Taxes, Etc.
----------
(a) The Company and its Subsidiaries are members of an affiliated
group of corporations filing consolidated returns for Federal income tax
purposes, of which the Company is the "common parent" (within the meaning of
Section 1504 of the Code) of such group. The Company and its Subsidiaries have
filed all Federal income tax returns and all other material tax returns that are
required to be filed by them and have paid all taxes due pursuant to such
returns or pursuant to any assessment except (a) taxes that are being contested
in good faith by appropriate proceedings and for which the Company or such
Subsidiary, as applicable, has set aside on its books adequate reserves or (b)
to the extent that the failure to do
Credit Agreement
----------------
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so could not reasonably be expected to result in a Material Adverse Effect. The
charges, accruals and reserves on the books of the Company and its Subsidiaries
in respect of taxes and other governmental charges are, in the opinion of the
Company, adequate. The Company has not given or been requested to give a waiver
of the statute of limitations relating to the payment of Federal, state, local
and foreign taxes or other impositions.
(b) The Company has heretofore furnished to each Lender a true and
complete copy of each tax sharing agreement as in effect on the date hereof
between any of the Company, any Affiliate or any Material Subsidiary
(collectively, the "Tax Sharing Agreements"). The Tax Sharing Agreements and
----------------------
the implementation thereof are and will be in compliance with applicable laws
and regulations (including, without limitation, the Code).
(c) Under the Tax Sharing Agreements, the Company receives payments
each year in amounts at least equal to the excess of (i) the tax liability of
the Company's consolidated group, over (ii) the Company's tax liability computed
on a separate return basis as if the Company were a stand alone corporation that
derived no income from its subsidiaries.
7.10 Investment Company Act. Neither the Company nor any of its
----------------------
Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
7.11 Public Utility Holding Company Act. Neither the Company nor any
----------------------------------
of its Subsidiaries is a "holding company", or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company", within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
7.12 Environmental Matters. Except as set forth in Schedule I
---------------------
hereto, each of the Company and its Subsidiaries has obtained all environmental,
health and safety permits, licenses and other authorizations required under all
Environmental Laws to carry on its business as now being or as proposed to be
conducted, except to the extent failure to have any such permit, license or
authorization would not have a Material Adverse Effect. Except as set forth in
Schedule I hereto, each of such permits, licenses and authorizations is in full
force and effect and each of the Company and its Subsidiaries is in material
compliance with the terms and conditions thereof, and is also in compliance with
all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in any applicable
Environmental Law or in any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or approved
thereunder, except to the extent failure to comply therewith would not have a
Material Adverse Effect. In addition, no notice, notification, demand, request
for information, citation, summons or order has been issued, no complaint has
been filed, no penalty has been assessed and no investigation or review is
pending or threatened by any governmental or other entity
Credit Agreement
----------------
-42-
with respect to any alleged failure by the Company or any of its Subsidiaries to
have any environmental, health or safety permit, license or other authorization
required under any applicable Environmental Law in connection with the conduct
of the business of the Company or any of its Subsidiaries or with respect to any
generation, treatment, storage, recycling, transportation, discharge or
disposal, or any Release of any Hazardous Materials generated by the Company or
any of its Subsidiaries. There have been no environmental investigations,
studies, audits, tests, reviews or other analyses conducted by or that are in
the possession of the Company or any of its Subsidiaries in relation to any site
or facility now or previously owned, operated or leased by the Company or any of
its Subsidiaries which have not been made available to the Lenders.
7.13 Title to Assets.
---------------
(a) Each of the Company and its Subsidiaries has good title to, or
valid leasehold interests in, all its real and personal property material to its
business, except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.
(b) Each of the Company and its Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Company and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
7.14 True and Complete Disclosure. The Company has disclosed to the
----------------------------
Lenders all agreements, instruments and corporate or other restrictions to which
it or any of its Subsidiaries is subject, and all other matters known to it,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. None of the reports, financial statements,
certificates or other information furnished by or on behalf of the Company to
the Administrative Agent or any Lender in connection with the negotiation of
this Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
Section 8. Covenants of the Company. The Company covenants and
------------------------
agrees with the Lenders and the Administrative Agent that, so long as any Loan
is outstanding and until payment in full of all amounts payable by the Company
hereunder:
8.01 Financial Statements, Etc. The Company will deliver to each of
-------------------------
the Lenders:
Credit Agreement
----------------
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(a) as soon as available and in any event within 45 days after the
end of each of the first three quarterly fiscal periods of each fiscal year
of the Company, consolidated and consolidating statements of income and
consolidated statements of stockholders' equity and cash flow of the
Company and its Consolidated Subsidiaries for such period and for the
period from the beginning of the respective fiscal year to the end of such
period, and the related consolidated and consolidating balance sheets of
the Company and its Consolidated Subsidiaries as at the end of such period,
setting forth in each case in comparative form the corresponding
consolidated and consolidating figures for the corresponding period in the
preceding fiscal year, accompanied by a certificate of a senior financial
officer of the Company, which certificate shall state that said
consolidated financial statements fairly present the consolidated financial
condition and results of operations of the Company and its Consolidated
Subsidiaries, and said consolidating statements of income and balance
sheets fairly present the individual unconsolidated financial condition and
results of operations of the Company, in each case in accordance with
generally accepted accounting principles, consistently applied, as at the
end of, and for, such period (subject to normal year-end audit
adjustments);
(b) as soon as available and in any event within 90 days after the
end of each fiscal year of the Company, consolidated and consolidating
statements of income and consolidated statements of stockholders' equity
and cash flow of the Company and its Consolidated Subsidiaries for such
fiscal year and the related consolidated and consolidating balance sheets
of the Company and its Consolidated Subsidiaries as at the end of such
fiscal year, setting forth in each case in comparative form the
corresponding consolidated and consolidating figures for the preceding
fiscal year, and accompanied (i) in the case of said consolidated
statements and balance sheet of the Company, by an opinion thereon of
independent certified public accountants of recognized national standing,
which opinion shall state that said consolidated financial statements
fairly present the consolidated financial condition and results of
operations of the Company and its Consolidated Subsidiaries as at the end
of, and for, such fiscal year in accordance with generally accepted
accounting principles, and a certificate of such accountants stating that,
in making the examination necessary for their opinion, they obtained no
knowledge, except as specifically stated, of any Default, and (ii) in the
case of said consolidating statements and balance sheets, to the extent
that they relate to the Company on a parent company stand alone basis, by a
certificate of a senior financial officer of the Company, which certificate
shall state that said consolidating statements of income and balance sheets
fairly present the individual unconsolidated financial condition and
results of operations of the Company, in each case in accordance with
generally accepted accounting principles, consistently applied, as at the
end of, and for, such fiscal year;
Credit Agreement
----------------
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(c) as soon as available and in any event within 45 days after the end
of each of the first three quarterly fiscal periods of each fiscal year of
FATICO, Statutory Statements of FATICO (prepared in accordance with
statutory accounting practices required or permitted by the Applicable
Insurance Regulatory Authority) for such fiscal period, accompanied by a
certificate of a senior financial officer of FATICO which certificate shall
state that such financial statements present the financial condition of
FATICO in accordance with statutory accounting practices required or
permitted by the Applicable Insurance Regulatory Authority;
(d) as soon as available and in any event within 60 days after the end
of each fiscal year of FATICO, the annual Statutory Statement of FATICO
(prepared in accordance with statutory accounting practices required or
permitted by the Applicable Insurance Regulatory Authority) for such year
and as filed with the Insurance Department of the State of California,
accompanied by (i) a certificate of a senior financial officer of FATICO
stating that said Statutory Statement presents the financial condition of
FATICO in accordance with the statutory accounting practices required or
permitted by the applicable Insurance Regulatory Authority, (ii) a
certificate of a senior financial officer of FATICO, affirming the adequacy
of Reserves of FATICO as at the end of such fiscal year and (iii) a report
by Milliman & ▇▇▇▇▇▇▇▇▇, Inc. affirming the adequacy of Reserves of FATICO
as at the end of such fiscal year;
(e) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, which the
Company shall have filed with the Securities and Exchange Commission (or
any governmental agency substituted therefor) or any national securities
exchange;
(f) promptly upon the mailing thereof to the shareholders of the
Company generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Company and its Subsidiaries in an aggregate
amount exceeding $10,000,000;
(h) as soon as received by the Company, a copy of any final financial
examination report (including, without limitation, any report in respect of
any tri-annual examination conducted by any Applicable Insurance Regulatory
Authority) or market conduct examination report issued by or prepared for
any governmental authority (including any Applicable Insurance Regulatory
Authority and NAIC) with respect to any Insurance Company that is a
Material Subsidiary; and to the extent disclosure to the Lenders is
permitted by law, a copy of any financial examination report issued by or
prepared for any governmental authority (including any Applicable
Credit Agreement
----------------
-45-
Bank Regulatory Authority) with respect to the Company, First American
Trust or First Security Thrift;
(i) immediately, notice of actual (or threatened action that could
lead to the) suspension, termination or revocation of any License of any
Insurance Company which is a Material Subsidiary by any governmental
authority (including any Applicable Insurance Regulatory Authority),
including any notice by any governmental authority of the commencement of
any proceeding, hearing or administrative action to suspend, terminate or
revoke any such License as a result of the failure by any such Insurance
Company to take or refrain from taking, any action which adversely affects
the authority of such Insurance Company to conduct its business after
notice thereof by such governmental authority (including any such
Applicable Insurance Regulatory Authority);
(j) promptly after the Company knows or has reason to believe that any
insurance, banking or other regulator having jurisdiction over the Company
or any of its Material Subsidiaries has commenced any proceeding, issued
any order, given notice of a formal hearing, sought relief from any court
or taken any similar action with respect to the Company or any of its
Material Subsidiaries that seeks to, or would, result in the revocation of
any license or authorization of the Company or any of its Material
Subsidiaries or materially restrict the ability of the Company or any of
its Material Subsidiaries to do business in any jurisdiction, a notice
describing in reasonable detail such proceeding, order, hearing or similar
action;
(k) at the time it furnishes statements pursuant to paragraph (a) or
(b) above, a certificate of a senior financial officer of the Company which
certificate shall list all Subject Property (as such term is defined in
Section 8.14 hereof) acquired by the Company and its Subsidiaries during
the most recently ended fiscal quarter;
(l) immediately, but in any event no later than five days after the
Company knows that any Applicable Bank Regulatory Authority's specification
by regulation of capital levels results in First Security Thrift being
designated an "undercapitalized," "significantly undercapitalized" or
"critically undercapitalized" institution pursuant to 12 U.S.C. 1831o, a
notice identifying such designation and describing in reasonable detail the
computations necessary to determine such designation;
(m) promptly after the Company knows or has reason to believe that
any Default has occurred, a notice of such Default describing the same in
reasonable detail and, together with such notice or as soon thereafter as
possible, a description of the action that the Company has taken or
proposes to take with respect thereto;
Credit Agreement
----------------
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(n) from time to time such other information regarding the financial
condition, operations, business or prospects of the Company or any of its
Subsidiaries (including, without limitation, any Plan or Multiemployer Plan
and any reports or other information required to be filed under ERISA) as
any Lender or the Agent may reasonably request; and
(o) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
The Company will furnish to each Lender, at the time it furnishes each set of
financial statements pursuant to paragraph (a) or (b) above, a certificate of a
senior financial officer of the Company (i) to the effect that no Default has
occurred and is continuing (or, if any Default has occurred and is continuing,
describing the same in reasonable detail and describing the action that the
Company has taken or proposes to take with respect thereto) and (ii) setting
forth in reasonable detail the computations necessary to determine (x) Deferred
Revenues (but only to the extent not already reflected as a discrete item in the
set of financial statements furnished with such certificate) and (y) whether the
Company is in compliance with Sections 8.08, 8.09, and 8.10 hereof, as of the
end of the respective quarterly fiscal period or fiscal year.
8.02 Litigation. The Company will promptly give to each Lender
----------
notice of all legal or arbitral proceedings, and of all proceedings by or before
any governmental or regulatory authority or agency, and any material development
in respect of such legal or other proceedings, affecting the Company or any of
its Subsidiaries, except proceedings which, if adversely determined, would not
have a Material Adverse Effect. Without limiting the generality of the
foregoing, the Company will give to each Lender notice of the assertion of any
Environmental Claim by any Person against, or with respect to the activities of,
the Company or any of its Subsidiaries and notice of any alleged violation of or
non-compliance with any Environmental Laws or any permits, licenses or
authorizations, other than any Environmental Claim or alleged violation which,
if adversely determined, would not have a Material Adverse Effect.
8.03 Existence, Etc. (a) The Company will, and will cause each of
--------------
its Material Subsidiaries to:
(i) preserve and maintain its legal existence and all of its material
rights, privileges, licenses and franchises; and
(ii) maintain all of its Properties used or useful (in the good faith
opinion of the Company) in its business in good working order and
condition, ordinary wear and tear excepted.
Credit Agreement
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(b) The Company will, and will cause each of its Subsidiaries to:
(i) comply with the requirements of all applicable laws, rules,
regulations and orders of governmental or regulatory authorities if failure
to comply with such requirements could have a Material Adverse Effect;
(ii) pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any of
its Property prior to the date on which penalties attach thereto, except
for any such tax, assessment, charge or levy the payment of which is being
contested in good faith and by proper proceedings and against which
adequate reserves (as required by generally accepted accounting principles
or statutory accounting practices, as the case may be) are being
maintained;
(iii) keep adequate records and books of account, in which complete
entries will be made in accordance with generally accepted accounting
principles or statutory accounting practices, as the case may be,
consistently applied; and
(iv) permit representatives of any Lender or the Agent, during normal
business hours under guidance from officers of the Company or its
Subsidiaries, to examine, copy and make extracts from its books and
records, to inspect any of its Properties, and to discuss its business and
affairs with its officers, all to the extent reasonably requested by such
Lender or the Agent (as the case may be).
8.04 Insurance. The Company will, and will cause each of its
---------
Subsidiaries to, keep insured by financially sound and reputable insurers all
Property of a character usually insured by corporations engaged in the same or
similar business similarly situated against loss or damage of the kinds and in
the amounts customarily insured against by such corporations and carry such
other insurance as is usually carried by such corporations.
8.05 Fundamental Changes. The Company will not, and will not permit
-------------------
any Subsidiary to, merge into or consolidate with any other Person, or permit
any other Person to merge into or consolidate with it, or sell, transfer, lease
or otherwise dispose of (in one transaction or in a series of transactions) all
or substantially all its assets, or all or substantially all of the stock of any
of its Subsidiaries (in each case, whether now owned or hereafter acquired), or
liquidate or dissolve, except that, if at the time thereof and immediately after
giving effect thereto no Default shall have occurred and be continuing (i) any
Subsidiary may merge into the Company in a transaction in which the Company is
the surviving corporation, (ii) any Subsidiary may merge into any Subsidiary in
a transaction in which the surviving entity is a Subsidiary, (iii) any
Subsidiary may sell, transfer, lease or otherwise dispose of its assets to the
Company or to another Subsidiary and (iv) any Subsidiary may liquidate or
dissolve if the Company determines in good faith that such liquidation or
dissolution is in the best
Credit Agreement
----------------
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interests of the Company and is not materially disadvantageous to the Lenders;
provided that any such merger involving a Subsidiary shall not be permitted
--------
unless the Company or another Subsidiary shall have owned not less than 90% of
the voting stock of such Subsidiary immediately prior to such merger.
8.06 Limitation on Liens. The Company will not, nor will it permit
-------------------
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon any of its Property, whether now owned or hereafter acquired, except:
(a) Liens created pursuant to the Pledge Agreement;
(b) Liens in existence on the date hereof;
(c) Liens imposed by any governmental authority for taxes,
assessments or charges not yet due or which are being contested in good
faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained on the books of the Company or the affected
Subsidiaries, as the case may be, in accordance with generally accepted
accounting principles (or, in the case of an Insurance Company, statutory
accounting practices);
(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are
not overdue for a period of more than 30 days or which are being contested
in good faith and by appropriate proceedings and Liens securing judgments
but only to the extent for an amount and for a period not resulting in an
Event of Default under clause (h) of Section 9 hereof;
(e) pledges or deposits under worker's compensation, unemployment
insurance and other social security legislation;
(f) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds, casualty insurance policies of the type
usually carried by corporations engaged in businesses or activities that
are the same as or similar to those of the Company and its Subsidiaries and
other obligations of a like nature incurred in the ordinary course of
business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and encumbrances
consisting of zoning restrictions, easements, licenses, restrictions on the
use of Property or minor imperfections in title thereto which, in the
aggregate, are not material in amount, and
Credit Agreement
----------------
-49-
which do not in any case materially detract from the value of the Property
subject thereto or interfere with the ordinary conduct of the business of
the Company or any of its Subsidiaries;
(h) Liens upon Property of any corporation which becomes a Subsidiary
of the Company after the date hereof, provided that such Liens are in
--------
existence at the time such corporation becomes a Subsidiary of the Company
and were not created in anticipation thereof;
(i) Liens upon tangible personal Property used primarily in the
ordinary course of the business of the Company and its Subsidiaries and
acquired after the date hereof;
(j) Liens upon real Property used to secure Indebtedness permitted by
Section 8.07(i) hereof;
(k) Liens upon the Property of First American Trust and First
American Title & Trust Company which are created in the ordinary course of
their respective financial services businesses as such businesses are
conducted as of the date hereof;
(l) Liens upon Property of the Company or any Subsidiary which are
created pursuant to real estate exchange transactions (benefitting from the
tax treatment of Section 1031 of the Code) in the ordinary course of their
respective financial services businesses as such businesses are conducted
as of the date hereof;
(m) Liens upon Property of any Subsidiary of the Company securing
Indebtedness of such Subsidiary to the Company or another Subsidiary of the
Company that is the direct or indirect parent entity of such Subsidiary
permitted by Section 8.07 hereof;
(n) Liens upon Property of the Company or any of its Subsidiaries
securing Arbitrage Loans; provided that no such Lien shall extend to or
--------
cover any such Property other than the securities and/or other investments
in which the proceeds of such Arbitrage Loans have been invested; and
(o) any extension, renewal or replacement of the foregoing, provided
--------
however, that the Liens permitted hereunder shall not be spread to cover
any additional Indebtedness or Property (other than a substitution of like
Property).
8.07 Indebtedness. The Company will not permit any of its
------------
Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness
except:
Credit Agreement
----------------
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(a) Indebtedness outstanding on the date hereof;
(b) Indebtedness of Subsidiaries secured by Liens permitted under
Section 8.06(h) hereof up to but not exceeding $50,000,000 at any one time
outstanding;
(c) Indebtedness of the Company to any Subsidiary of the Company, or
Indebtedness of any Subsidiary of the Company to the Company or to any
other Subsidiary of the Company;
(d) Arbitrage Loans;
(e) Indebtedness of FATICO, First American Title Guaranty Holding
Company and First American Home Buyers Protection Corporation with respect
to Minority Stockholders Put Obligations;
(f) Indebtedness of FAREISI and FATICO to the Company representing
intercompany loans made by the Company from net proceeds received by the
Company from its Equity Issuances;
(g) additional Indebtedness of the Insurance Companies in respect of
letters of credit (or similar instruments) and Guarantees issued in the
ordinary course of the title insurance business in connection with
settlement of title insurance claims, so long as the aggregate amount of
all such Indebtedness does not exceed $10,000,000 at any one time
outstanding;
(h) Indebtedness of Subsidiaries in respect of letters of credit (or
similar instruments) and guarantees issued in connection with settlement or
administration of claims made against any of its Subsidiary under insurance
policies of the type usually carried by corporations engaged in businesses
or activities that are the same as or similar to those of the Company and
its Subsidiaries;
(i) Indebtedness incurred by any Subsidiary used to acquire real
Property to be occupied by such Subsidiary, so long as the aggregate amount
of any such Indebtedness does not exceed 80% of the book value of such real
property;
(j) additional Indebtedness of Subsidiaries not exceeding 20% of
Total Stockholder's Equity;
(k) Obligations under Sale/Leaseback Transactions permitted by
Section 8.16 hereof; and
Credit Agreement
----------------
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(l) any extension, renewal or refinancing of the foregoing.
8.08 Total Stockholders' Equity. The Company will not permit Total
--------------------------
Stockholders' Equity to be less than $285,000,000 at any time.
8.09 Total Debt to Total Capitalization. The Company will not permit
----------------------------------
Total Debt at any time to exceed 40% of Total Capitalization.
8.10 Minimum Combined Earnings. The Company will not permit Combined
-------------------------
Earnings for any period of eight consecutive rolling fiscal quarters to be less
than $70,000,000 at any time.
8.11 Lines of Business. The Company will not permit, nor will it
-----------------
permit any of its Subsidiaries to, (a) engage to any substantial extent in any
line or lines of business activity other than the businesses it was engaged in
on the date hereof or (b) expand into any new markets or product lines
substantially different from those in which it was engaged as of the date
hereof.
8.12 Transactions with Affiliates. The Company will not, and will
----------------------------
not permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
and conditions not less favorable to the Company or such Subsidiary than could
be obtained on an arm's-length basis from unrelated third parties, and (b)
transactions between or among the Company and its Wholly Owned Subsidiaries not
involving any other Affiliate.
8.13 Use of Proceeds, Etc. The proceeds of the Loans will be used
--------------------
for general corporate purposes. No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board of Governors of the Federal Reserve
System, including Regulations G, U and X.
8.14 Foreclosure; Etc. The Company will not, nor will it permit any
----------------
of its Subsidiaries to, acquire ownership or control of any commercial real
property with a fair market value of $1,000,000 or more and which is used for
commercial purposes by means of the exercise of any right of foreclosure, power
of sale or similar remedy it may avail itself of by way of any indenture of
mortgage or similar instrument relating to such commercial real property (the
"Subject Property"), or accept a deed to the Subject Property in lieu of
-----------------
foreclosure or in settlement of any title insurance claim against it, unless the
Company shall have theretofore caused a Phase I Environmental Review (as defined
below) with respect to the Subject Property to be conducted. As used herein,
the term "Phase I Environmental Review"
----------------------------
Credit Agreement
----------------
-52-
shall mean an environmental survey and assessment prepared by an independent
engineer selected by the Company expert in the identification and analysis of
environmental risks (such engineer and his agents being referred to as the
"Environmental Consultant"), such survey and assessment to (a) estimate current
------------------------
liabilities and assess potential sources of future liabilities of any owner or
operator of, or any other Person having control of, the Subject Property arising
under the Comprehensive Response, Compensation and Liability Act, the Superfund
Amendments and Reauthorization Act of 1986, the Resource Conservation and
Recovery Act, in each case as amended, and any other act or regulation of any
Federal, state or local environmental authority having authority in respect of
the Subject Property and (b) be based upon (i) a physical on-site inspection by
the Environmental Consultant of the Subject Property (without any excavation of
the Subject Property), (ii) interviews by the Environmental Consultant of
individuals who have direct managerial responsibility for operations on the
Subject Property, (iii) a review by the Environmental Consultant of records
relating to current and historical operations conducted at the Subject Property
and (iv) as deemed appropriate by the Environmental Consultant, interviews by
the Environmental Consultant of individuals in the area in which the Subject
Property is located who may have knowledge of current and historical operations
conducted at the Subject Property. The Company agrees to provide to any Lender a
copy of such Environmental Review within 60 days of any request by such Lender
therefor.
8.15 Communication with Accountants. The Company agrees to permit
------------------------------
the Agent (on behalf of the Lenders) to communicate through a financial officer
of the Company with its independent certified public accountants (if no Event of
Default has occurred and is continuing), after the Agent obtains the prior
consent of the Company (which consent may be oral or written) and further agrees
to authorize such accountants on a case by case basis to disclose to the Lenders
through the Agent any and all financial statements and other supporting
financial documents and schedules, including copies of any management letter
with respect to the business, financial condition, and other affairs of the
Company and any of its Subsidiaries which may be reasonably requested; provided
--------
however, that, after the occurrence and during the continuance of any Event of
-------
Default, the Agent shall not be required to obtain the consent of the Company in
order to engage in any direct discussions with such accountants, but the Agent
shall be required to provide the Company with the opportunity to participate in
such meetings.
8.16 Sale/Leaseback Transactions. The Company will not nor will it
---------------------------
permit any of its Subsidiaries to enter into any arrangement with any Person
whereby the Company or any of its Subsidiaries shall sell or otherwise transfer
any of its Property and thereafter rent or lease such Property or similar
Property for substantially the same use or uses as the Property sold or
transferred (each such arrangement, a "Sale/Leaseback Transaction") if, as a
--------------------------
result thereof, the aggregate amount of rent and lease payments payable in any
fiscal year by the Company and its Subsidiaries under all such arrangements
would exceed $25,000,000.
Credit Agreement
----------------
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Section 9. Events of Default. If one or more of the following events
-----------------
(herein called "Events of Default") shall occur and be continuing:
-----------------
(a) The Company shall default in the payment when due (whether at
stated maturity or upon mandatory or optional prepayment) of any principal
of any Loan; or the Company shall default in the payment when due of any
interest on any Loan or any fee or any other amount payable by it hereunder
or under any other Basic Document and such default shall continue
unremedied for three Business Days; or
(b) The Company or any of its Subsidiaries shall default in the
payment when due (beyond any applicable period of grace expressly set forth
in the governing documents) of any principal of or interest on any of its
other Indebtedness aggregating $10,000,000 or more, or in the payment when
due of any amount under any Interest Rate Protection Agreement; or any
event specified in any note, agreement, indenture or other document
evidencing or relating to any such Indebtedness or any event specified in
any Interest Rate Protection Agreement shall occur if the effect of such
event is to cause, or (with the giving of any notice or the lapse of time
or both) to permit the holder or holders of such Indebtedness (or a trustee
or agent on behalf of such holder or holders) to cause, such Indebtedness
to become due, or to be prepaid in full (whether by redemption, purchase,
offer to purchase or otherwise), prior to its stated maturity or to have
the interest rate thereon reset to a level so that securities evidencing
such Indebtedness trade at a level specified in relation to the par value
thereof or, in the case of an Interest Rate Protection Agreement, to permit
the payments owing under such Interest Rate Protection Agreement to be
liquidated; or
(c) Any representation, warranty or certification made or deemed made
herein or in any other Basic Document (or in any modification or supplement
hereto or thereto) by the Company, or any certificate furnished to any
Lender or the Administrative Agent pursuant to the provisions hereof or
thereof, shall prove to have been false or misleading as of the time made
or furnished in any material respect; or
(d) The Company shall default in the performance of any of its
obligations under any of Sections 8.01(l), 8.05, 8.06, 8.07, 8.08, 8.09,
8.10, 8.12, or 8.14 hereof; or the Company shall default in the performance
of any of its obligations under Section 4.02 of the Pledge Agreement; or
the Company shall default in the performance of any of its other
obligations in this Agreement or any other Basic Document and such default
shall continue unremedied for a period of thirty days after notice thereof
to the Company by the Administrative Agent or any Lender (through the
Administrative Agent); or
Credit Agreement
----------------
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(e) The Company or any of its Subsidiaries shall admit in writing its
inability to, or be generally unable to, pay its debts as such debts become
due; or
(f) The Company or any of its Subsidiaries shall (i) apply for or
consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee, examiner or liquidator of itself or of all or a
substantial part of its Property, (ii) make a general assignment for the
benefit of its creditors, (iii) commence a voluntary case under the
Bankruptcy Code, (iv) file a petition seeking to take advantage of any
other law relating to bankruptcy, insolvency, reorganization, liquidation,
dissolution, arrangement or winding-up, or composition or readjustment of
debts, (v) fail to controvert in a timely and appropriate manner, or
acquiesce in writing to, any petition filed against it in an involuntary
case under the Bankruptcy Code or (vi) take any corporate action for the
purpose of effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without the application
or consent of the Company or any of its Subsidiaries, in any court of
competent jurisdiction, seeking (i) its reorganization, liquidation,
dissolution, arrangement or winding-up, or the composition or readjustment
of its debts, (ii) the appointment of a receiver, custodian, trustee,
examiner, liquidator or the like of the Company or such Subsidiary or of
all or any substantial part of its Property, or (iii) similar relief in
respect of the Company or such Subsidiary under any law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts, and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering any of
the foregoing shall be entered and continue unstayed and in effect, for a
period of 60 or more days; or an order for relief against the Company or
such Subsidiary shall be entered in an involuntary case under the
Bankruptcy Code; or
(h) A final judgment or judgments for the payment of money in excess
of $5,000,000 in the aggregate (exclusive of judgment amounts fully covered
by insurance where the insurer has admitted liability in respect of such
judgment) or in excess of $20,000,000 in the aggregate (regardless of
insurance coverage) shall be rendered by one or more courts, administrative
tribunals or other bodies having jurisdiction against the Company or any of
its Subsidiaries and the same shall not be discharged (or provision shall
not be made for such discharge), or a stay of execution thereof shall not
be procured, within 30 days from the date of entry thereof and the Company
or the relevant Subsidiary shall not, within said period of 30 days, or
such longer period during which execution of the same shall have been
stayed, appeal therefrom and cause the execution thereof to be stayed
during such appeal; or
Credit Agreement
----------------
-55-
(i) Any ERISA Event shall have occurred that, in the opinion of the
Majority Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to have a Material Adverse Effect;
or
(j) A reasonable basis shall exist for the assertion against the
Company or any of its Subsidiaries of (or there shall have been asserted
against the Company or any of its Subsidiaries) claims or liabilities,
whether accrued, absolute or contingent, based on or arising from the
generation, storage, transport, handling or disposal of Hazardous Materials
by the Company or any of its Subsidiaries or Affiliates, or any predecessor
in interest of the Company or any of its Subsidiaries or Affiliates, or
relating to any site or facility owned, operated or leased by the Company
or any of its Subsidiaries or Affiliates, which claims or liabilities
(insofar as they are payable by the Company or any of its Subsidiaries but
after deducting any portion thereof which is reasonably expected to be paid
by other creditworthy Persons jointly and severally liable therefor), in
the judgment of the Majority Lenders are reasonably likely to be determined
adversely to the Company or any of its Subsidiaries, and the amount thereof
is, singly or in the aggregate, reasonably likely to have a Material
Adverse Effect; or
(k) During any period of 25 consecutive calendar months, a majority
of the Board of Directors of the Company shall no longer be composed of
individuals (i) who were members of said Board on the first day of such
period, (ii) whose election or nomination to said Board was approved by
individuals referred to in clause (i) above constituting at the time of
such election or nomination at least a majority of said Board or (iii)
whose election or nomination to said Board was approved by individuals
referred to in clauses (i) and (ii) above constituting at the time of such
election or nomination at least a majority of said Board; or
(l) Except for expiration in accordance with its terms, the Pledge
Agreement shall be terminated or shall cease to be in full force and
effect, for whatever reason; or
(m) The Company or any of its Subsidiaries shall be required by any
Applicable Bank Regulatory Authority, any Applicable Insurance Regulatory
Authority or any other similar governmental regulatory authority to enter
into, after the date hereof, any indenture, agreement, instrument or other
arrangement (including, without limitation, any capital maintenance
agreement) that, directly or indirectly, prohibits or restrains, or has the
effect of prohibiting or restraining, or imposes materially adverse
conditions upon, the incurrence or payment of Indebtedness, the granting of
Liens, the declaration or payment of dividends, the making of loans,
advances or Investments or the sale, assignment, transfer or other
disposition of Property or requires the making of capital contributions to,
or other Investments in, any such Subsidiary in an aggregate amount
exceeding $5,000,000;
Credit Agreement
----------------
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THEREUPON: (1) in the case of an Event of Default other than one referred to in
clause (f) or (g) of this Section 9 with respect to the Company, the
Administrative Agent may and, upon request of the Majority Lenders, shall, by
notice to the Company, terminate the Revolving Credit Commitments and/or declare
the principal amount then outstanding of, and the accrued interest on, the Loans
and, in the case of the Fixed Rate Loan, to the extent lawful, the applicable
Make-Whole Amount and all other amounts payable by the Company hereunder and
under the Notes (including, without limitation, any amounts payable under
Section 5.05 hereof) to be forthwith due and payable, whereupon such amounts
shall be immediately due and payable without presentment, demand, protest or
other formalities of any kind, all of which are hereby expressly waived by the
Company; and (2) in the case of the occurrence of an Event of Default referred
to in clause (f) or (g) of this Section 9 with respect to the Company, the
Revolving Credit Commitments shall automatically be terminated and the principal
amount then outstanding of, and the accrued interest on, the Loans and, in the
case of the Fixed Rate Loan, to the extent lawful, the applicable Make-Whole
Amount and all other amounts payable by the Company hereunder and under the
Notes (including without limitation, any amounts payable under Section 5.05
hereof) shall automatically become immediately due and payable without
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by the Company.
Section 10. The Administrative Agent.
------------------------
10.01 Appointment, Powers and Immunities. Each Lender hereby
----------------------------------
irrevocably appoints and authorizes the Administrative Agent to act as its agent
hereunder and under the other Basic Documents with such powers as are
specifically delegated to the Administrative Agent by the terms of this
Agreement and of the other Basic Documents, together with such other powers as
are reasonably incidental thereto. The Administrative Agent (which term as used
in this sentence and in Section 10.05 and the first sentence of Section 10.06
hereof shall include reference to its affiliates and its own and its affiliates'
officers, directors, employees and agents): (a) shall have no duties or
responsibilities except those expressly set forth in this Agreement and in the
other Basic Documents, and shall not by reason of this Agreement or any other
Basic Document be a trustee for any Lender; (b) shall not be responsible to the
Lenders for any recitals, statements, representations or warranties contained in
this Agreement or in any other Basic Document, or in any certificate or other
document referred to or provided for in, or received by any of them under, this
Agreement or any other Basic Document, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, any
Note or any other Basic Document or any other document referred to or provided
for herein or therein or for any failure by the Company or any other Person to
perform any of its obligations hereunder or thereunder; (c) shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder or under any other Basic Document; and (d) shall not be responsible
for any action taken or omitted to be taken by it hereunder or under any other
Basic Document or under any other document or instrument referred to or provided
for herein
Credit Agreement
----------------
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or therein or in connection herewith or therewith, except for its own gross
negligence or willful misconduct. The Administrative Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it in good faith. The
Administrative Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until a notice of the assignment or
transfer thereof shall have been filed with the Administrative Agent, together
with the consent of the Company to such assignment or transfer (to the extent
provided in Section 11.06(b) hereof).
10.02 Reliance by Administrative Agent. The Administrative Agent
--------------------------------
shall be entitled to rely upon any certification, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telex,
telegram or cable) believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel, independent accountants and other experts
selected by the Administrative Agent. As to any matters not expressly provided
for by this Agreement or any other Basic Document, the Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder or thereunder in accordance with instructions given by the Majority
Lenders, and such instructions of the Majority Lenders and any action taken or
failure to act pursuant thereto shall be binding on all of the Lenders.
10.03 Defaults. The Administrative Agent shall not be deemed to have
--------
knowledge or notice of the occurrence of a Default (other than the non-payment
of principal of or interest on Loans or of commitment fees) unless the
Administrative Agent has received notice from a Lender or the Company specifying
such Default and stating that such notice is a "Notice of Default". In the
event that the Administrative Agent receives such a notice of the occurrence of
a Default, the Administrative Agent shall give prompt notice thereof to the
Lenders (and shall give each Lender prompt notice of each such non-payment).
The Administrative Agent shall (subject to Section 10.07 hereof) take such
action with respect to such Default as shall be directed by the Majority
Lenders, provided that, unless and until the Administrative Agent shall have
--------
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interest of the Lenders
except to the extent that this Agreement expressly requires that such action be
taken, or not be taken, only with the consent or upon the authorization of the
Majority Lenders or all of the Lenders.
10.04 Rights as a Lender. With respect to its Commitment and the
------------------
Loans made by it, Chase (and any successor acting as Administrative Agent) in
its capacity as a Lender hereunder shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
acting as the Administrative Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Administrative Agent in its
individual capacity. Chase (and any successor acting as Administrative Agent)
and
Credit Agreement
----------------
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its affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in and generally engage in any
kind of banking, trust or other business with the Company (and any of its
Subsidiaries or Affiliates) as if it were not acting as the Administrative
Agent, and Chase and its affiliates may accept fees and other consideration from
the Company for services in connection with this Agreement or otherwise without
having to account for the same to the Lenders.
10.05 Indemnification. The Lenders agree to indemnify the
---------------
Administrative Agent (to the extent not reimbursed under Section 11.03 hereof,
but without limiting the obligations of the Company under said Section 11.03,
ratably in accordance with the aggregate principal amount of the Fixed Rate
Loans, Revolving Credit Loans, and unused Revolving Credit Commitments held by
the Lenders, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever that may be imposed on, incurred by or asserted
against the Administrative Agent (including by any Lender) arising out of or by
reason of any investigation in or in any way relating to or arising out of this
Agreement or any other Basic Document or any other documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
(including, without limitation, the costs and expenses that the Company is
obligated to pay under Section 11.03 hereof, but excluding, unless a Default has
occurred and is continuing, normal administrative costs and expenses incident to
the performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents, provided that no Lender
--------
shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified.
10.06 Non-Reliance on Administrative Agent and Other Lenders. Each
------------------------------------------------------
Lender agrees that it has, independently and without reliance on the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Company and its Subsidiaries and decision to enter into this Agreement and that
it will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement. The Administrative Agent
shall not be required to keep itself informed as to the performance or
observance by the Company of this Agreement or any of the other Basic Documents
or any other document referred to or provided for herein or therein or to
inspect the Properties or books of the Company or any of its Subsidiaries.
Except for notices, reports and other documents and information expressly
required to be furnished to the Lenders by the Administrative Agent hereunder,
the Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the affairs,
financial condition or business of the Company or any of its Subsidiaries (or
any of
Credit Agreement
----------------
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their affiliates) that may come into the possession of the Administrative Agent
or any of its affiliates.
10.07 Failure to Act. Except for action expressly required of the
--------------
Administrative Agent hereunder and under the other Basic Documents, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction from the Lenders of their indemnification
obligations under Section 10.05 hereof against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action.
10.08 Resignation or Removal of Administrative Agent. Subject to the
----------------------------------------------
appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving notice thereof
to the Lenders and the Company, and the Administrative Agent may be removed at
any time with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right to appoint a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Majority Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent's giving of
notice of resignation or the Majority Lenders' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent, that shall be a bank
which has an office in New York, New York with a combined capital and surplus of
at least $1,000,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. After any retiring Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of this Section 10
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent.
10.09 Consents under Basic Documents. The Administrative Agent may,
------------------------------
with the prior consent of the Majority Lenders (but not otherwise), consent to
any modification, supplement or waiver under any of the Basic Documents (other
than this Agreement), provided that, without the prior consent of each Lender,
--------
the Administrative Agent shall not (except as provided herein or in the Pledge
Agreement) release any collateral or otherwise terminate any Lien under the
Pledge Agreement, or agree to additional obligations being secured by such
collateral security (unless the Lien for such additional obligations shall be
junior to the Lien in favor of the other obligations secured by the Pledge
Agreement), except that no such consent shall be required, and the
Administrative Agent is hereby authorized, to release any Lien covering Property
which is the subject of a disposition of Property permitted hereunder or to
which the Majority Lenders have consented.
Credit Agreement
----------------
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Section 11. Miscellaneous.
-------------
11.01 Waiver. No failure on the part of the Administrative Agent or
------
any Lender to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under this Agreement or any Note shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Agreement or any Note preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
11.02 Notices. All notices, requests and other communications
-------
provided for herein and under the Pledge Agreement (including, without
limitation, any modifications of, or waivers or consents under, this Agreement)
shall be given or made in writing (including, without limitation, by telecopy)
delivered to the intended recipient at the "Address for Notices" specified below
its name on the signature pages hereof; or, as to any party, at such other
address as shall be designated by such party in a notice to each other party.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telecopier or personally
delivered or, in the case of a mailed notice, upon receipt, in each case given
or addressed as aforesaid.
11.03 Expenses, Etc. The Company agrees to pay or reimburse each of
-------------
the Lenders and the Administrative Agent for paying: (a) all reasonable out-of-
pocket costs and expenses of the Administrative Agent (including, without
limitation, the reasonable fees and expenses of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇,
special New York counsel to Chase), in connection with (i) the negotiation,
preparation, execution and delivery of this Agreement and the other Basic
Documents and the making of the Loans hereunder and (ii) any modification,
supplement or waiver of any of the terms of this Agreement or any of the other
Basic Documents; (b) all reasonable costs and expenses of the Lenders and the
Administrative Agent (including, without limitation, reasonable counsels' fees)
in connection with (i) any Default and any enforcement or collection proceedings
resulting therefrom or in connection with the negotiation of any restructuring
or "work-out" (whether or not consummated), or the obligations of the Company
hereunder and (ii) the enforcement of this Section 11.03; and (c) all transfer,
stamp, documentary or other similar taxes (other than income taxes), assessments
or charges levied by any governmental or revenue authority in respect of this
Agreement or any of the other Basic Documents or any other document referred to
herein or therein and all costs, expenses, taxes (other than income taxes),
assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated by
any Basic Document or any other document referred to therein.
The Company hereby agrees (i) to indemnify the Administrative Agent
and each Lender and their respective directors, officers, employees, attorneys
and agents from, and hold
Credit Agreement
----------------
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each of them harmless against, any and all losses, liabilities, claims, damages
or expenses incurred by any of them (including, without limitation, any and all
losses, liabilities, claims, damages or expenses incurred by the Administrative
Agent to any Lender, whether or not the Administrative Agent or any Lender is a
party thereto) arising out of or by reason of any investigation or litigation or
other proceedings (including any threatened investigation or litigation or other
proceedings) relating to the extensions of credit hereunder or any actual or
proposed use by the Company or any of its Subsidiaries of the proceeds of any of
the extensions of credit hereunder, including, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation or litigation or other proceedings (but excluding any such
losses, liabilities, claims, damages or expenses incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified) and (ii) not
to assert any claim against the Administrative Agent, any Lender, any of their
affiliates, or any of their respective directors, officers, employees, attorneys
and agents, on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to any of the transactions
contemplated herein or in any other Basic Document. Without limiting the
generality of the foregoing, the Company will indemnify the Administrative Agent
and each Lender from, and hold the Administrative Agent and each Lender harmless
against, any losses, liabilities, claims, damages or expenses described in the
preceding sentence (but excluding, as provided in the preceding sentence, any
loss, liability, claim, damage or expense incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified) arising under
any Environmental Law as a result of the past, present or future operations of
the Company or any of its Subsidiaries (or any predecessor in interest to the
Company or any of its Subsidiaries), or the past, present or future condition of
any site or facility owned, operated or leased by the Company or any of its
Subsidiaries (or any such predecessor in interest), or any Release or threatened
Release of any Hazardous Materials from any such site or facility, including any
such Release or threatened Release which shall occur during any period when the
Administrative Agent or any Lender shall be in possession of any such site or
facility following the exercise by the Administrative Agent or any Lender of any
of its rights and remedies hereunder or under the Pledge Agreement unless such
Release or threatened Release is caused by the Administrative Agent or such
Lender.
11.04 Amendments, Etc. Except as otherwise expressly provided in
---------------
this Agreement, any provision of this Agreement may be modified or supplemented
only by an instrument in writing signed by the Company, the Administrative Agent
and the Majority Lenders, or by the Company and the Administrative Agent acting
with the consent of the Majority Lenders, and any provision of this Agreement
may be waived by the Majority Lenders or by the Administrative Agent acting with
the consent of the Majority Lenders; provided that: in addition to the
--------
foregoing, (a) no modification, supplement or waiver shall, unless by an
instrument signed by all of the Lenders or by the Administrative Agent acting
with the consent of all of the Lenders: (i) extend the date fixed for the
payment of any fee
Credit Agreement
----------------
-62-
hereunder, (ii) reduce the rate at which any fee is payable hereunder, (iii)
alter the terms of this Section 11.04, (iv) modify the definition of the term
"Majority Lenders" or modify in any other manner the number or percentage of the
Lenders required to make any determinations or waive any rights hereunder or to
modify any provision hereof, or (v) waive any of the conditions precedent set
forth in Section 6 hereof; (b) no modification, supplement or waiver shall,
unless by an instrument signed by all of the Revolving Credit Lenders or by the
Administrative Agent acting with the consent of all of the Revolving Credit
Lenders (i) extend the date fixed for the payment of principal of or interest on
any Revolving Credit Loan (ii) reduce the amount of any such payment of
principal, (iii) reduce the rate at which interest is payable thereon, (iv)
alter the rights or obligations of the Company to prepay Revolving Credit Loans,
or (v) modify the definition of the term "Majority Revolving Credit Lenders";
(c) no modification, supplement or waiver shall, unless by an instrument also
signed by the Fixed Rate Lender (i) extend the date fixed for the payment of
principal of or interest on the Fixed Rate Loan (ii) reduce the amount of any
such payment of principal, (iii) reduce the rate at which interest is payable
thereon, (iv) alter the rights or obligations of the Company to prepay the Fixed
Rate Loan; and (d) any modification or supplement of Section 10 hereof shall
require the consent of the Administrative Agent.
11.05 Successors and Assigns. This Agreement shall be binding upon
----------------------
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
11.06 Assignments and Participations.
------------------------------
(a) The Company may not assign any of its rights or obligations
hereunder or under the Notes without the prior consent of all of the Lenders and
the Administrative Agent.
(b) Each Lender may assign any of its Loans and its Note; provided
--------
that (i) no partial assignment of the Fixed Rate Loan (together with the Fixed
Rate Note) shall be permitted hereunder; (ii) any such partial assignment (not
otherwise prohibited by clause (i) above) shall be in an amount at least equal
to $5,000,000; (iii) each such assignment by a Revolving Credit Lender of its
Revolving Credit Loans or Revolving Credit Note shall be made in such manner so
that the same portion of its Revolving Credit Loans and Revolving Credit Note is
assigned to the respective assignee; and (iv) each assignment by a Revolving
Credit Lender of its Revolving Credit Loans or Revolving Credit Commitment shall
be made in such a manner so that the same portion of its Revolving Credit Loans
and Revolving Credit Commitment is assigned to the assignee. Upon execution and
delivery by the assignee to the Company and the Administrative Agent of an
instrument in writing pursuant to which such assignee agrees to become a
"Lender" hereunder (if not already a Lender) having the Loans specified in such
instrument, the assignee shall have, to the extent of such assignment, the
obligations, rights and benefits of a Lender hereunder holding the Loans (or
portions thereof) assigned to it (in addition to the Loans theretofore held by
such assignee). Upon each such
Credit Agreement
----------------
-63-
assignment the assigning Lender shall pay the Administrative Agent an assignment
fee of $2,000.
(c) A Lender may sell or agree to sell to one or more other Persons a
participation in all or any part of its Loans, in which event each purchaser of
a participation (a "Participant") which, except as otherwise provided in Section
-----------
4.07(c) hereof, shall not have any other rights or benefits under this Agreement
or any Note or any other Basic Document (the Participant's rights against such
Lender in respect of such participation to be those set forth in the agreements
executed by such Lender in favor of the Participant). All amounts payable by
the Company to any Lender under Section 5 hereof in respect of its Loans shall
be determined as if such Lender had not sold or agreed to sell any
participations in such Loans, and as if such Lender were funding each of such
Loan in the same way that it is funding the portion of such Loan in which no
participations have been sold. In no event shall a Lender that sells a
participation agree with the Participant to take or refrain from taking any
action hereunder or under any other Basic Document except that such Lender may
agree with the Participant that it will not, without the consent of the
Participant, agree to (i) extend the date fixed for the payment of principal of
or interest on the related Loan or Loans or any portion of any fee hereunder
payable to the Participant, (ii) reduce the amount of any such payment of
principal, (iii) reduce the rate at which interest is payable thereon, or any
fee hereunder payable to the Participant, to a level below the rate at which the
Participant is entitled to receive such interest or fee, (iv) alter the rights
or obligations of the Company to prepay the related Loans or (v) consent to any
modification, supplement or waiver hereof or of any of the other Basic Documents
to the extent that the same, under Section 10.09 or 11.04 hereof, requires the
consent of each Lender.
(d) In addition to the assignments and participations permitted under
the foregoing provisions of this Section 11.06, any Lender may assign and pledge
all or any portion of its Loan and its Note to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating Circular issued
by such Federal Reserve Bank. No such assignment shall release the assigning
Lender from its obligations hereunder.
(e) Subject to Section 11.12 hereof, a Lender may furnish any
information concerning the Company or any of its Subsidiaries in the possession
of such Lender from time to time to assignees and participants (including
prospective assignees and participants).
(f) Anything in this Section 11.06 to the contrary notwithstanding,
no Lender may assign or participate any interest in any Loan held by it
hereunder to the Company or any of its Affiliates or Subsidiaries without the
prior written consent of each Lender.
11.07 Survival. The obligations of the Company under Sections 5.01,
--------
5.05, 5.06 and 11.03 hereof, the obligations of the Lenders under Section 10.05
hereof and, to the
Credit Agreement
----------------
-64-
extent set forth in Section 5.10 of the Pledge Agreement, the provisions of
Section 10 hereof shall survive the repayment of the Loans and the termination
of the Revolving Credit Commitments. In addition, each representation and
warranty made, or deemed to be made by the notice of borrowing, herein or
pursuant hereto shall survive the making of such representation and warranty,
and no Lender shall be deemed to have waived, by reason of making its Loan, any
Default which may arise by reason of such representation or warranty proving to
have been false or misleading, notwithstanding that such Lender or the
Administrative Agent may have had notice or knowledge or reason to believe that
such representation or warranty was false or misleading at the time such Loan
was made.
11.08 Captions. The table of contents and captions and section
--------
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
11.09 Counterparts. This Agreement may be executed in any number of
------------
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
11.10 Governing Law; Submission to Jurisdiction. This Agreement and
-----------------------------------------
the Notes shall be governed by, and construed in accordance with, the law of the
State of New York. The Company hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern District of New York and of
any New York state court sitting in New York City for the purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. The Company irrevocably waives, to the fullest extent
permitted by applicable 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.
11.11 Waiver of Jury Trial. EACH OF THE COMPANY, THE ADMINISTRATIVE
--------------------
AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, 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.
11.12 Treatment of Certain Information; Confidentiality.
-------------------------------------------------
(a) The Company acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
the Company or one or more of its Subsidiaries (in connection with this
Agreement or otherwise) by any Lender or by one or more subsidiaries or
affiliates of such Lender and the Company hereby authorizes each
Credit Agreement
----------------
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Lender to share any information delivered to such Lender by the Company and its
Subsidiaries pursuant to this Agreement, or in connection with the decision of
such Lender to enter into this Agreement, to any such subsidiary or affiliate,
it being understood that any such subsidiary or affiliate receiving such
information shall be bound by the provisions of clause (b) below as if it were a
Lender hereunder.
(b) Each Lender and the Administrative Agent agrees (on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of this nature and in accordance with safe and sound banking practices, any non-
public information supplied to it by the Company pursuant to this Agreement
which is identified by the Company as being confidential at the time the same is
delivered to the Lenders or the Administrative Agent, provided that nothing
--------
herein shall limit the disclosure of any such information (i) to the extent
required by statute, rule, regulation or judicial process, (ii) to counsel for
any of the Lenders or the Administrative Agent, (iii) to bank examiners,
auditors or accountants, (iv) to the Administrative Agent or any other Lender
(or to Chase Securities Inc.), (v) in connection with any litigation to which
any one or more of the Lenders or the Administrative Agent is a party, (vi) to a
subsidiary or affiliate of such Lender as provided in clause (a) above or (vii)
to any assignee or participant (or prospective assignee or participant) so long
as such assignee or participant (or prospective assignee or participant) first
executes and delivers to the respective Lender a Confidentiality Agreement
substantially in the form of Exhibit C hereto; provided, further, that in no
-------- -------
event shall any Lender or the Administrative Agent be obligated or required to
return any materials furnished by the Company. The obligations of each Lender
under this Section 11.12 shall supersede and replace the obligations of such
Lender under the confidentiality letter in respect of this financing signed and
delivered by such Lender to the Company prior to April 21, 1992.
11.13 Amendment Fees. Anything in this Agreement to the contrary
--------------
notwithstanding, the Company, the Administrative Agent and each Lender hereby
agrees that any payment of fees after the date hereof by the Company to the
Lenders in connection with effecting any amendment hereto (other than an
amendment of the type described in Section 11.04(b) or (c) hereof) shall be made
for account of all of the Lenders who execute and deliver such amendment in
accordance with the respective unpaid principal amounts of the Loans held by
them, provided however, that in no event (i) shall the amendment fee payable to
--------
the Fixed Rate Lender (for its execution and delivery of any amendment) pursuant
to the foregoing provision be less than the greatest amount of any such
amendment fee payable to any Revolving Credit Lender and (ii) shall the
foregoing provision apply to any payment of any fee to the Administrative Agent.
11.14 Pledge Agreement.
----------------
Credit Agreement
----------------
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(a) Amendment to Pledge Agreement. By its signature below, each of
-----------------------------
the parties hereto agrees that references to the "Credit Agreement" in the
Pledge Agreement shall be deemed to references to this Amended and Restated
Credit Agreement.
(b) Termination of Pledge Agreement. By its signature below, each of
-------------------------------
the parties hereto agrees that upon the repayment of the Fixed Rate Loan and all
other amounts owing to the Fixed Rate Lender hereunder (including, without
limitation, interest and fees), and upon notice in writing from the Fixed Rate
Lender to the Administrative Agent to such effect, the Pledge Agreement shall
terminate and no longer be in force and effect.
Credit Agreement
----------------
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
THE FIRST AMERICAN FINANCIAL
CORPORATION
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
Title: Executive Vice President and Chief
Financial Officer
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
Title: V.P./Secretary
Address for Notices:
The First American Financial
Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Credit Agreement
----------------
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LENDERS
-------
Revolving Credit THE CHASE MANHATTAN BANK
Commitment
----------------
$18,750,000
By /s/ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
--------------------------
Title: Vice President
Lending Office for all Loans:
The Chase Manhattan Bank
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Address for Notices:
The Chase Manhattan Bank
1 Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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New York Agency
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Credit Agreement
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Revolving Credit SANWA BANK CALIFORNIA
Commitment
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$18,750,000
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
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Title: Vice President
Lending Office:
Sanwa Bank California
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Address for Notices:
Sanwa Bank California
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Attention: ▇▇▇▇ ▇▇▇ Chaydhuri
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Credit Agreement
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Revolving Credit UNION BANK OF CALIFORNIA, N.A.
Commitment
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$18,750,000
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Title: Vice President
Lending Office:
Union Bank of California, N.A.
Commercial Portfolio Administration
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Address for Notices:
Union Bank of California, N.A.
Commercial Portfolio Administration
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Vice President
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Credit Agreement
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Revolving Credit COMERICA BANK
Commitment
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$18,750,000
By /s/ EMMANUEL SKIVOFILAX
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Title: Corporate Banking Officer
Lending Office:
Comerica Bank
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Address for Notices:
Comerica Bank
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Credit Agreement
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Revolving Credit ▇▇▇▇▇ FARGO BANK, N.A.
Commitment
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$ 0
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Title: Vice President
Address for Notices:
▇▇▇▇▇ Fargo Bank, N.A.
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Credit Agreement
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Revolving Credit NBD BANK, N.A.
Commitment (formerly National Bank of Detroit)
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$ 0
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Title: First Vice President
Address for Notices:
NBD First Chicago
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Managing Director
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Credit Agreement
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of the THE CANADA LIFE ASSURANCE COMPANY
Fixed Rate Loan as of
the Effective Date
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$6,140,000 CHASE MANHATTAN BANK, AS NOMINEE FOR
THE CANADA LIFE ASSURANCE COMPANY
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Title: Vice President
Lending Office:
The Canada Life Assurance Company
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Attention: U.S. Private
Placements
Address for Notices:
The Canada Life Assurance Company
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Attention: Supervisor,
Securities Accounting
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Credit Agreement
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as Administrative Agent
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Title: Vice President
Address for Notices to
Chase as Administrative Agent:
The Chase Manhattan Bank
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New York Agency
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Schedule I
The First American Financial Corporation and Subsidiary Companies
Environmental Matters
-None-
Schedule II
The First American Financial Corporation and Subsidiary Companies
Liens Securing Indebtedness Greater Than or Equal to $5,000,000
-None-
Schedule III
The First American Financial Corporation and Subsidiary Companies
Indebtedness Greater Than or Equal to $5,000,000
Description Rate Balance
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Capital Securities (Liquidation Amount $1,000 per 8.50% $100,000,000
Capital Security) issued by First American Capital
Trust 1 (the "Trust") pursuant to the Amended and
Restated Declaration of Trust dated as of April 22, 1997,
among The First American Financial Corporation (the
"Company"), as sponsor, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as regular trustees of the Trust, and
Wilmington Trust Company, as Delaware trustee and
property trustee of the Trust, which Capital Securities,
together with the Common Securities of the Trust
(collectively, the "Trust Securities"), represent undivided
beneficial ownership interests in the $103,093,000 aggregate
principal amount of 8.50% Junior Subordinated Debentures
due April 15, 2012, issued by the Company pursuant to the
Junior Subordinated Indenture dated as of April 22, 1997,
between the Company and Wilmington Trust Company, as
trustee, and acquired by the Trust. The Company has guaranteed
certain payments in respect of the Trust Securities pursuant
to the Guarantee Agreement, dated as of April 22, 1997, made by
the Company in favor of Wilmington Trust Company, as guarantee
trustee for the benefit of the holders of the Trust Securities.
Sale/leaseback of furniture, fixtures and equipment 10.34% $16,960,000
pursuant to Master Lease Agreement dated as of
December 12, 1994, between the Company and
General Electric Capital Corporation, for
itself and as agent for certain participants.
EXHIBIT A
REVOLVING CREDIT NOTE
$18,750,000 July 29, ▇▇▇▇
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FOR VALUE RECEIVED, THE FIRST AMERICAN FINANCIAL CORPORATION, a
California corporation (the "Company"), hereby promises to pay to SANWA BANK
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CALIFORNIA (the "Lender"), for account of the Lender's respective Applicable
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Lending Offices provided for by the Credit Agreement (as such term is defined
below), at the principal office of The Chase Manhattan Bank in New York, New
York, the principal sum of Eighteen Million Seven Hundred Fifty Thousand Dollars
(or such lesser amount as shall equal the unpaid principal amount of the
Revolving Credit Loans made to the Company under the Credit Agreement and held
by the Lender), in lawful money of the United States of America and in
immediately available funds, in installments on the dates and in the principal
amounts provided in the Credit Agreement, and to pay interest on the unpaid
principal amount of each such Loan, at such office, in like money and funds, for
the period commencing on the date of such Loan until such Loan shall be paid in
full, at the rates per annum and on the dates provided in the Credit Agreement.
The date, amount, Type, interest rate and duration of Interest Period
(if applicable) of each of the Revolving Credit Loans made by the Lender to the
Company, and each payment made on account of the principal thereof, shall be
recorded by the Lender on its books and, prior to any transfer of this Note,
endorsed by the Lender on the schedule attached hereto or any continuation
thereof, provided that the failure of the Lender to make any such recordation or
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endorsement shall not affect the obligations of the Company to make a payment
when due of any amount owing under the Credit Agreement or hereunder in respect
of such Loans.
This Note is one of the Revolving Credit Notes referred to in the
Amendment and Restatement dated as of July 29, 1997 of the Amendment and
Restatement dated as of April 28, 1993 of the Credit Agreement dated as of April
21, 1992 (as amended and supplemented from time to time, the "Credit Agreement")
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between the Company, the lenders named therein and The Chase Manhattan Bank, as
Administrative Agent, and evidences Revolving Credit Loans made thereunder and
held by the Lender and is entitled to the benefits of certain security as
further described therein. Terms used but not defined in this Note have the
respective meanings assigned to them in the Credit Agreement.
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The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of the Loans
evidenced hereby upon the terms and conditions specified therein.
Except as permitted by Section 11.06(b) of the Credit Agreement, this
Note may not be assigned by the Lender to any other Person.
This Note shall be governed by, and construed in accordance with, the
law of the State of New York.
THE FIRST AMERICAN FINANCIAL
CORPORATION
By_________________________
Title:
By_________________________
Title:
SCHEDULE OF REVOLVING CREDIT LOANS
This Note evidences Revolving Credit Loans made, Continued or
Converted under the within-described Credit Agreement, on the dates, in the
principal amounts, of the Types, bearing interest at the rates and having
Interest Periods (if applicable) of the durations set forth below, subject to
the payments, Continuations, Conversions and prepayments of principal set forth
below:
Date
Loan Made, Amount
Paid, Pre- Duration Paid, Pre- Unpaid
paid, Con- Principal Type of paid, Con- Prin-
tinued or Amount of of Interest Interest tinued or cipal Notation
Converted Loan Loan Rate Period Converted Amount Made by
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EXHIBIT B
[Form of Opinion of Counsel to the Company]
___________, 1997
To the Lenders party to the
Credit Agreement referred to
below and The Chase Manhattan
Bank, as Administrative Agent
Re: Amended and Restated Credit Agreement
Ladies and Gentlemen:
I am corporate counsel of The First American Financial Corporation, a
California corporation (the "Company"), and have acted in such capacity in
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connection with the Amendment and Restatement dated as of __________, 1997 to
the Amendment and Restatement dated as of April 28, 1993, of the Credit
Agreement dated as of April 21, 1992, among the Company, the lenders party
thereto and The Chase Manhattan Bank, as Administrative Agent (the "Credit
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Agreement"). Unless otherwise defined herein, capitalized terms shall have the
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meanings given thereto in the Credit Agreement.
In rendering the opinions expressed below, I have examined the Credit
Agreement and the Notes issued in connection therewith (collectively, the
"Credit Documents"), and the originals or conformed copies of such resolutions,
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corporate records, agreements and instruments of the Company and its
Subsidiaries, certificates of public officials and of officers of the Company
and its Subsidiaries, and such other documents and records, and such matters of
law, as I have deemed appropriate as a basis for the opinions hereinafter
expressed. In such examination and investigation, I have assumed the
genuineness of all signatures (other than those of officers of the Company), the
legal capacity of natural persons, the authenticity of all documents submitted
as originals and the conformity to original documents of documents submitted as
certified or photostatic copies. I have also assumed that each of the Credit
Documents has been or will be duly authorized, executed and delivered by the
parties thereto other than the Company and constitutes or will constitute a
valid, legal and binding obligation of all such other parties.
In rending this opinion, I do not express any opinion concerning any law
other than the law of the State of California and the federal law of the United
States.
Based upon the foregoing and subject to the limitations, qualifications,
exceptions and assumptions set forth below, I am of the opinion that:
1. The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of California and has the necessary
corporate power to
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make and perform the Credit Agreement and the Notes and to borrow under the
Credit Agreement.
2. The execution, delivery and performance by the Company of the Credit
Documents and the borrowing by the Company under the Credit Agreement have been
duly authorized by all necessary corporate action, and do not and will not
violate any provision of law or regulation or any provision of the Company's
charter or bylaws or result in the breach of, or constitute a default or require
any consent (other than consents which have been obtained) under, or (except for
the Liens created pursuant to the Pledge Agreement) result in the creation of
any Lien upon any of the Properties, revenues or assets of the Company pursuant
to, any indenture or other agreement or instrument of which I have knowledge
(after due inquiry) to which the Company is a party or by which the Company or
its Properties may be bound.
3. The Credit Agreement constitutes, and each of the Notes, when executed
and delivered for value, will constitute, legal, valid and binding obligations
of the Company enforceable against it in accordance with their respective terms,
except (a) as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights of
creditors generally, (b) that the enforceability of such Credit Documents is
subject to the application of general principles of equity (regardless of
whether considered in a proceeding in equity or at law), including, without
limitation, (i) the possible unavailability of specific performance, injunctive
relief or any other equitable remedy and (ii) concepts of materiality,
reasonableness, good faith and fair dealing.
4. Except as disclosed to the Lenders prior to the date hereof, there are
no legal or arbitral proceedings, and no proceedings by or before any
governmental or regulatory authority or agency, pending or (to my knowledge
after due inquiry) threatened against or affecting the Company, or any
Properties or rights of the Company, which, if adversely determined, would have
a Material Adverse Effect.
5. Except for the filing by the Company of the Relevant 8-K Report and
copies of the Credit Agreement with the Securities and Exchange Commission and
the New York Stock Exchange, Inc., no authorizations, consents, approvals,
licenses, filings or registrations with, any governmental or regulatory
authority or agency are required in connection with the execution, delivery or
performance by the Company for the Credit Documents.
6. Neither the Company nor any of its Subsidiaries is (a) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
7. The foregoing opinions are also subject to the following additional
limitations, qualifications, exceptions and assumptions:
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a. In rending my opinion in paragraph 3 above, I have assumed that
the Credit Documents are governed by the laws of the State of
California.
b. I express no opinion as to whether or not the execution, delivery
or performance by the Company of the Credit Documents will conflict with
or result in a breach of, or constitute a default under, any covenant,
restriction or provision with respect to financial ratios or tests or
any aspect of the financial condition or results of operation of the
Company (other than covenants or restrictions that relate to the
incurrence of indebtedness and the incurrence of liens) under any
indenture or other agreement or instrument.
c. I express no opinion as to whether a federal or state court would
give effect to the choice of New York law provided for in the Credit
Documents.
d. In rendering my opinion set forth in paragraph 4, I advise you
that I have not conducted any search of any court docket.
e. I express no opinion as to (i) Section 4.07(c) of the Credit
Agreement, (ii) the second sentence of Section 11.10 of the Credit
Agreement insofar as such sentence relates to the subject matter
jurisdiction of the United State District Court for the Southern
District of New York to adjudicate any controversy related to any of the
Credit Documents or (iii) the waiver of inconvenient forum set forth in
Section 11.10 of the Credit Agreement with respect to proceedings in the
United States District Court for the Southern District of New York.
f. I express no opinion as to whether a court would grant specific
performance or any other suitable remedy with respect to any Credit
Document. However, the Credit Documents contain, in my opinion,
adequate remedial provisions for the practical realization of the rights
and benefits purported to be afforded thereby.
g. The enforceability of Section 11.03 of the Credit Agreement may be
limited by laws rendering unenforceable indemnification contrary to
federal or state securities laws and the public policy underlying such
laws.
h. The enforceability of provisions in the Credit Documents to the
effect that terms may not be waived or modified except in writing may be
limited under certain circumstances.
i. I express no opinion as to the effect of the laws of any
jurisdiction in which any Lender is located (other than any California)
that limits the interest, fees or other charges it may impose.
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j. To the extent that my opinions set forth above involve factual
determinations as to what may, or may not, constitute a Material Adverse
Effect, I have relied with your approval upon certifications of the
Company.
k. I am a member of the Bar of the State of California and do not
hold myself out as being conversant with, and express no opinion as to,
the laws of any jurisdiction other than those of the United States of
America and the State of California.
The opinions expressed herein are solely for your benefit (and for the
benefit of your successors and assigns) and may not be relied upon in any manner
for any purpose by any other person without my prior written consent in each
instance.
Very truly yours,
EXHIBIT C
[Form of Confidentiality Agreement]
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and
Address of Prospective
Participant or Assignee]
Re: Amended and Restated Credit Agreement dated as of ___________, 1997
(the "Credit Agreement"), between The First American Financial
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Corporation (the "Company"), the lenders named therein and The Chase
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Manhattan Bank, as Administrative Agent.
Dear Ladies and Gentlemen:
As a Lender party to the Credit Agreement, we have agreed with the Company
pursuant to Section 11.12 of the Credit Agreement to use reasonable precautions
to keep confidential, except as otherwise provided therein, all non-public
information identified by the Company as being confidential at the time the same
is delivered to us pursuant to the Credit Agreement.
As provided in said Section 11.12, we are permitted to provide you, as a
prospective [holder of a participation in the Loans (as defined in the Credit
Agreement)][assignee Lender], with certain of such non-public information
subject to the execution and delivery by you, prior to receiving such non-public
information, of a Confidentiality Agreement in this form. Such information will
not be made available to you until your execution and return to us of this
Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you agree (on behalf of
yourself and each of your affiliates, directors, officers, employees and
representatives) that (A) such information will not be used by you except in
connection with the proposed [participation][assignment] mentioned above and (B)
you shall use reasonable precautions, in accordance with your customary
procedures for handling confidential information and in accordance with safe and
sound banking practices, to keep such information confidential, provided that
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nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to your
counsel or to counsel for any of the Lenders or the Administrative Agent, (iii)
to bank examiners, auditors or accountants, (iv) to the Administrative Agent or
any other Lender (or to Chase Securities Inc.),
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(v) in connection with any litigation to which you or any one or more of the
Lenders or the Agent are a party, (vi) to a subsidiary or affiliate of yours as
provided in Section 11.12(a) of the Credit Agreement or (vii) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first executes and delivers
to you a Confidentiality Agreement substantially in the form hereof; provided,
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further, that in no event shall you be obligated to return any materials
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furnished to you pursuant to this Confidentiality Agreement.
Please indicate your agreement to the foregoing by signing as provided
below the enclosed copy of this Confidentiality Agreement and returning the same
to us.
Very truly yours,
[INSERT NAME OF LENDER]
By_________________________
The foregoing is agreed to
as of the date of this letter.
[INSERT NAME OF PROSPECTIVE
PARTICIPANT OR ASSIGNEE]
By___________________________