EXHIBIT 4.1(a)
$50,000,000
CREDIT AGREEMENT
among
AMERICAN MEDICAL SECURITY GROUP, INC.
as Borrower,
THE LENDERS NAMED HEREIN
and
LASALLE BANK NATIONAL ASSOCIATION,
as Agent
DATED AS OF
December 30, 2002
TABLE OF CONTENTS
PAGE
I. DEFINITIONS..............................................................................................1
II. THE CREDITS.............................................................................................15
2.1. Commitment.....................................................................................15
2.2. Required Payments; Termination.................................................................16
2.3. Ratable Loans..................................................................................16
2.4. Types of Advances..............................................................................16
2.5. Facility Fee; Reductions in Aggregate Commitment...............................................16
2.6. Minimum Amount of Each Advance.................................................................16
2.7. Optional Principal Payments....................................................................17
2.8. Mandatory Commitment Reductions................................................................17
2.9. Method of Selecting Types and Interest Periods for New Advances................................17
2.10. Conversion and Continuation of Outstanding Advances............................................18
2.11. Changes in Interest Rate, etc..................................................................18
2.12. Rates Applicable After Default.................................................................18
2.13. Method of Payment..............................................................................19
2.14. Evidence of Indebtedness.......................................................................19
2.15. Telephonic Notices.............................................................................20
2.16. Interest Payment Dates; Interest and Fee Basis.................................................20
2.17. Notification of Advances, Interest Rates, Prepayments and Commitment Reductions................20
2.18. Lending Installations..........................................................................20
2.19. Non-Receipt of Funds by the Agent..............................................................21
III. YIELD PROTECTION; TAXES.................................................................................21
3.1. Yield Protection...............................................................................21
3.2. Changes in Capital Adequacy Regulations........................................................22
3.3. Availability of Types of Advances..............................................................22
3.4. Funding Indemnification........................................................................23
3.5. Taxes..........................................................................................23
3.6. Lender Statements; Survival of Indemnity.......................................................24
3.7. Substitution of Lender.........................................................................25
IV. CONDITIONS PRECEDENT....................................................................................25
4.1. Effectiveness..................................................................................25
4.2. Each Advance...................................................................................28
V. REPRESENTATIONS AND WARRANTIES..........................................................................28
5.1. Existence and Standing.........................................................................28
5.2. Authorization and Validity.....................................................................28
5.3. No Conflict; Government Consent................................................................29
5.4. Financial Statements...........................................................................29
5.5. Material Adverse Change........................................................................29
5.6. Taxes..........................................................................................30
5.7. Litigation and Contingent Obligations..........................................................30
5.8. Subsidiaries...................................................................................30
5.9. ERISA..........................................................................................30
5.10. Accuracy of Information........................................................................30
5.11. Federal Reserve Regulations....................................................................31
5.12. Material Agreements............................................................................31
5.13. Compliance With Laws...........................................................................31
5.14. Ownership of Properties........................................................................31
5.15. Plan Assets; Prohibited Transactions...........................................................31
5.16. Environmental Matters..........................................................................31
5.17. Investment Company Act.........................................................................32
5.18. Public Utility Holding Company Act.............................................................32
5.19. Insurance......................................................................................32
5.20. Solvency.......................................................................................32
5.21. Insurance Licenses.............................................................................32
5.22. Reinsurance....................................................................................33
5.23. Reserves.......................................................................................33
5.24. UWLIC Capital and Surplus......................................................................33
5.25. Defaults.......................................................................................33
5.26. Certain Fees...................................................................................34
5.27. Indebtedness...................................................................................34
5.28. Employee Controversies.........................................................................34
5.29. Dividends......................................................................................34
5.30. Security.......................................................................................34
VI. COVENANTS...............................................................................................34
6.1. Financial Reporting............................................................................35
6.2. Use of Proceeds................................................................................37
6.3. Required Notices...............................................................................38
6.4. Conduct of Business............................................................................38
6.5. Taxes..........................................................................................39
6.6. Insurance......................................................................................39
6.7. Compliance with Laws...........................................................................39
6.8. Maintenance of Properties......................................................................39
6.9. Inspection.....................................................................................39
6.10. Dividends......................................................................................40
6.11. Indebtedness...................................................................................40
6.12. Merger.........................................................................................41
6.13. Sale of Assets.................................................................................41
6.14. Investments and Acquisitions...................................................................42
6.15. Liens..........................................................................................45
6.16. Affiliates.....................................................................................46
6.17. Other Indebtedness.............................................................................46
6.18 Contingent Obligations.........................................................................46
6.19. Financial Covenants............................................................................46
6.19.1. Fixed Charge Coverage Ratio.........................................................46
6.19.3. Leverage Ratio......................................................................46
6.19.4. Consolidated Net Worth..............................................................46
6.19.5. Statutory Capital and Surplus.......................................................47
6.19.6. Risk-Based Capital..................................................................47
6.21. Reinsurance....................................................................................47
6.22. Tax Consolidation..............................................................................47
6.23. ERISA Compliance...............................................................................47
6.24. Environmental Matters..........................................................................48
6.25. Change in Corporate Structure; Fiscal Year.....................................................48
6.26. Inconsistent Agreements........................................................................48
6.27. Capital Expenditures...........................................................................49
6.27. Capital Expenditures...........................................................................49
VII. DEFAULTS ...............................................................................................49
VIII. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES..........................................................52
8.1. Acceleration...................................................................................52
8.2. Amendments.....................................................................................52
8.3. Preservation of Rights.........................................................................53
IX. GENERAL PROVISIONS......................................................................................53
9.1. Survival of Representations....................................................................53
9.2. Governmental Regulation........................................................................53
9.3. Headings.......................................................................................53
9.4. Entire Agreement...............................................................................53
9.5. Several Obligations; Benefits of this Agreement................................................53
9.6. Expenses; Indemnification......................................................................54
9.7. Numbers of Documents...........................................................................54
9.8. Accounting.....................................................................................54
9.9. Severability of Provisions.....................................................................55
9.10. Nonliability of Lenders........................................................................55
9.11. Confidentiality................................................................................55
9.12. Nonreliance....................................................................................55
9.13. Disclosure.....................................................................................55
X. THE AGENT...............................................................................................56
10.1. Appointment; Nature of Relationship............................................................56
10.2. Powers.........................................................................................56
10.3. General Immunity...............................................................................56
10.4. No Responsibility for Loans, Recitals, etc.....................................................56
10.5. Action on Instructions of Lenders..............................................................57
10.6. Employment of Agents and Counsel...............................................................57
10.7. Reliance on Documents; Counsel.................................................................57
10.8. Agent's Reimbursement and Indemnification......................................................57
10.9. Notice of Default..............................................................................58
10.10. Rights as a Lender.............................................................................58
10.11. Lender Credit Decision.........................................................................58
10.12. Successor Agent................................................................................58
10.13. Agent's Fee....................................................................................59
10.14. Delegation to Affiliates.......................................................................59
XI SETOFF; RATABLE PAYMENTS................................................................................59
11.1. Setoff.........................................................................................59
11.2. Ratable Payments...............................................................................60
XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.......................................................60
12.1. Successors and Assigns.........................................................................60
12.2. Participations.................................................................................61
12.2.1. Permitted Participants; Effect.....................................................61
12.2.2. Voting Rights......................................................................61
12.2.3. Benefit of Setoff..................................................................61
12.3. Assignments....................................................................................61
12.3.1. Permitted Assignments..............................................................61
12.3.2. Effect; Effective Date.............................................................62
12.4. Dissemination of Information...................................................................62
12.5. Tax Treatment..................................................................................62
XIII. NOTICES.................................................................................................63
13.1. Notices........................................................................................63
13.2. Change of Address..............................................................................63
XIV. COUNTERPARTS............................................................................................63
XV. CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL............................................63
15.1. CHOICE OF LAW..................................................................................63
15.2. CONSENT TO JURISDICTION........................................................................64
15.3. WAIVER OF JURY TRIAL...........................................................................64
EXHIBITS
Exhibit A - Form of Compliance Certificate
Exhibit B - Form of Assignment Agreement
Exhibit C - Form of Revolving Note
Exhibit D - Form of Guaranty
Exhibit E - Form of Pledge Agreement
SCHEDULES
Pricing Schedule
Schedule 5.3 - Consents
Schedule 5.7 - Litigation and Contingent Obligations
Schedule 5.8 - Subsidiaries
Schedule 5.21 - Insurance Licenses
Schedule 5.22 - Reinsurance
Schedule 5.23 - Reserves
Schedule 5.27 - Indebtedness
Schedule 6.11 - Additional Indebtedness
Schedule 6.15 - Liens
Schedule 6.27 - Capital Expenditures
CREDIT AGREEMENT
This Credit Agreement, dated as of December 30, 2002, is among American
Medical Security Group, Inc., a Wisconsin corporation ("Borrower"), the Lenders
and LaSalle Bank National Association ("LaSalle"), as Agent.
R E C I T A L S:
WHEREAS, the Lenders have agreed to make available to Borrower a revolving
credit facility, upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which Borrower or any of
its Subsidiaries (a) acquires any going business or all or substantially all of
the assets of any firm, corporation or limited liability company, or division
thereof, whether through purchase of assets, merger or otherwise or (b) directly
or indirectly acquires (in one transaction or as the most recent transaction in
a series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage or voting power) of the
outstanding ownership interests of a partnership or limited liability company.
"Advance" means a borrowing hereunder (or conversion or continuation
thereof) consisting of the aggregate amount of the several Revolving Loans made
on the same Borrowing Date (or date of conversion or continuation) by the
Lenders to Borrower of the same Type and, in the case of LIBOR Advances, for the
same Interest Period.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Affected Lender" is defined in SECTION 3.7.
"Agent" means LaSalle in its capacity as contractual representative of the
Lenders pursuant to ARTICLE X, and not in its individual capacity as a Lender,
and any successor Agent appointed pursuant to ARTICLE X.
"Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders, which, as of the Initial Closing Date shall be $50,000,000, as reduced
from time to time pursuant to the terms hereof
"Agreement" means this credit agreement, as it may be amended or modified
and in effect from time to time.
"Agreement Accounting Principles" means GAAP as in effect from time to
time, applied in a manner consistent with those used in preparing the financial
statements referred to in SECTION 5.4(A) and (B).
"Annual Statement" means the annual statutory financial statement of any
Insurance Subsidiary required to be filed with the insurance commissioner (or
similar authority) of its jurisdiction of incorporation, which statement shall
be in the form required by such Insurance Subsidiary's jurisdiction of
incorporation or, if no specific form is so required, in the form of financial
statements permitted by such insurance commissioner (or such similar authority)
to be used for filing annual statutory financial statements and shall contain
the type of information permitted by such insurance commissioner (or such
similar authority) to be disclosed therein, together with all exhibits or
schedules filed therewith
"Applicable Margin", means, at any time, the percentage rate per annum
applicable to LIBOR Advances, as set forth on the PRICING SCHEDULE.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Asset Disposition" means any sale, transfer or other disposition of any
asset of Borrower or any Subsidiary in a single transaction or in a series of
related transactions, other than the sale of Investments in the ordinary course
of business by Insurance Subsidiaries.
"Authorized Officer" of a Person means any of the president, any executive
vice president, any senior vice president, the chief financial officer, the
controller, the treasurer or the assistant treasurer of such Person, acting
singly.
"Borrower" means American Medical Security Group, Inc., a Wisconsin
corporation.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in SECTION 2.9.
"Business Day" means (a) with respect to any borrowing, payment or rate
selection of LIBOR Advances, a day (other than a Saturday or Sunday) on which
banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities and on which dealings
in United States dollars are carried on in the London interbank market and (b)
for all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Chicago for the conduct of substantially all of their
commercial lending activities.
"Capital Expenditures" means, without duplication, any expenditures for any
purchase or other acquisition for value of any asset that is classified on a
consolidated balance sheet of Borrower and its Subsidiaries prepared in
accordance with Agreement Accounting Principles as a fixed or capital asset
excluding (a) the cost of assets acquired under Capitalized Lease Obligations,
(b) expenditures of insurance proceeds to rebuild or replace any asset after a
casualty loss, and (c) leasehold improvement expenditures for which Borrower or
a Subsidiary is reimbursed promptly by the lessor.
"Capitalized Lease" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Equivalent Investments" means (a) short-term obligations of, or fully
guaranteed by, the United States of America, (b) commercial paper rated A-1 or
better by S&P or P-1 or better by ▇▇▇▇▇'▇, (c) demand deposit accounts
maintained in the ordinary course of business, and (d) certificates of deposit
issued by, and overnight repurchase agreements and time deposits with,
commercial banks (whether domestic or foreign) having capital and surplus in
excess of $100,000,000; PROVIDED, in each case that the same provides for
payment of both principal and interest (and not principal alone or interest
alone) and is not subject to any contingency regarding the payment of principal
or interest.
"Change in Control" means (a) the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) or voting control, directly or indirectly, of 30% or more of the
outstanding shares of voting stock of Borrower, (b) Borrower shall cease to own,
free and clear of all Liens other than Permitted Liens, 100% of the outstanding
shares of voting stock of Holdings on a fully diluted basis (other than pursuant
to a merger of Holdings with and into Borrower in accordance with SECTION 6.12);
(c) Holdings shall cease to own, free and clear of all Liens other than
Permitted Liens, 100% of the outstanding shares of voting stock of UWLIC on a
fully diluted basis; or (d) during any period of 25 consecutive calendar months,
commencing on the date of this Agreement, the ceasing of those individuals (the
"Continuing Directors") who (i) were directors of Borrower on the first day of
each such period or (ii) subsequently became directors of Borrower and whose
initial election or initial nomination for election subsequent to that date was
approved by a majority of the Continuing Directors then on the board of
directors of Borrower to constitute a majority of the board of directors of
Borrower.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender to make
Loans not exceeding the amount set forth opposite its signature below or as set
forth in any Notice of Assignment relating to any assignment that has become
effective pursuant to SECTION 12.3.2, as such amount may be modified from time
to time pursuant to the terms hereof.
"Consolidated Indebtedness" means at any time the Indebtedness of Borrower
and its Subsidiaries calculated on a consolidated basis as of such time that
consists of Indebtedness for borrowed money to any Lender or any other financial
institution including, without limitation, all Indebtedness shown as "Notes
Payable" on the consolidated financial statements of Borrower and its
Subsidiaries delivered pursuant to SECTION 6.1(A) or (b).
"Consolidated Interest Expense" means, with reference to any period, the
interest expense of Borrower and its Subsidiaries calculated on a consolidated
basis for such period.
"Consolidated Net Income" means, with reference to any period, the net
income (or loss) of Borrower and its Subsidiaries calculated on a consolidated
basis for such period.
"Consolidated Net Worth" means at any time the consolidated stockholders'
equity of Borrower and its Subsidiaries calculated on a consolidated basis as of
such time, after appropriate deduction for any minority interests in
Subsidiaries, in accordance with GAAP, excluding treasury stock and also
excluding unrealized net losses and gains on assets held for sale pursuant to
Statement of Financial Accounting Standards ("SFAS") No. 115 and other
accumulated comprehensive income pursuant to SFAS No. 133.
"Consolidated Person" means, for the taxable year of reference, each Person
which is a member of the affiliated group of Borrower if consolidated returns
are or shall be filed for such affiliated group for federal income tax purposes
or any combined or unitary group of which Borrower, Holdings or UWLIC is a
member for state income tax purposes.
"Consolidated Total Capitalization" means at any time the sum of
Consolidated Indebtedness and Consolidated Net Worth, each calculated at such
time.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, but excluding Contingent Obligations in respect of insurance
policies issued in the ordinary course of business.
"Conversion/Continuation Notice" is defined in SECTION 2.10.
"Controlled Group" means all members of a controlled group of corporations
or other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with Borrower or any of its
Subsidiaries, are treated as a single employer under Section 414 of the Code.
"Default" means an event described in ARTICLE VII.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
America, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization or similar debtor relief laws of the United States of America
(including any Federal, state or local equivalents) or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.
"EBITDA" means, for any period, for Borrower and its Subsidiaries on a
consolidated basis, determined in accordance with GAAP, the sum of (a) the net
income (or net loss) for such period, PLUS (b) all amounts treated as expenses
for depreciation and interest and the amortization of intangibles of any kind to
the extent included in the determination of such net income (or loss), PLUS (c)
all accrued taxes on or measured by income to the extent included in the
determination of such net income (or loss).
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to (a) the
protection of the environment, (b) the effect of the environment on human
health, (c) emissions, discharges or releases of pollutants, contaminants,
hazardous substances or wastes into surface water, ground water or land, or (d)
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Excluded Taxes" means, in the case of each Lender or applicable Lending
Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (a) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or (b) the jurisdiction in
which the Agent's or such Lender's principal executive office or such Lender's
applicable Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another document
is specifically referenced.
"Existing Reinsurance Agreements" is defined in SECTION 5.23.
"Facility Termination Date" means December 30, 2005.
"Federal Funds Effective Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor publication, "H.15(519)") on the preceding Business Day opposite
the caption "Federal Funds (Effective)"; or, if for any relevant day such rate
is not so published on any such preceding Business Day, the rate for such day
will be the arithmetic mean as determined by the Agent of the rates for the last
transaction in overnight Federal funds arranged prior to 9:00 A.M. (New York
City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.
"Financial Contract" of a Person means (a) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, or (b) any agreements, devices or
arrangements providing for payments related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to, interest rate
exchange agreements, forward currency exchange agreements, interest rate cap or
collar protection agreements, forward rate currency or interest rate options.
"Fiscal Quarter" means one of the four three-month accounting periods
comprising a Fiscal Year.
"Fiscal Year" means the twelve-month accounting period ending December 31
of each year.
"Fixed Charge Coverage Ratio" means, as of any date of determination, the
RATIO of (a) the SUM of (i) Borrower's EBITDA for such period minus (ii) the sum
of all amounts paid out as dividends or other dividend-like distributions by
Borrower or any Subsidiary to any Person other than Borrower or one or more of
its Subsidiaries during such period, TO (b) the SUM of (i) Consolidated Interest
Expense for the period of four Fiscal Quarters ending on such date, plus (ii)
required payments of principal of Consolidated Indebtedness made during such
period, plus (iii) the sum of all amounts paid by Borrower and its Subsidiaries
under any Operating Lease during such period.
"Floating Rate" means, for any day, a rate of interest per annum equal to
the higher of (a) the Prime Rate for such day and (b) the sum of the Federal
Funds Effective Rate for such day plus 1/2% per annum.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the Floating
Rate.
"GAAP" shall mean generally accepted accounting principles in the United
States of America.
"Governmental Authority" means any government (foreign or domestic) or any
state or other political subdivision thereof or any governmental body, agency,
authority, department or commission (including without limitation any board of
insurance, insurance department or insurance commission and any taxing authority
or political subdivision) or any instrumentality or officer thereof (including
without limitation any court or tribunal) exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
and any corporation, partnership or other entity directly or indirectly owned or
controlled by or subject to the control of any of the foregoing.
"Guaranty Agreement" means that certain Guaranty Agreement dated as of the
date hereof by Holdings in favor of the Agent and the Lenders, as the same may
be amended, supplemented or modified from time to time.
"Holdings" means American Medical Security Holdings, Inc., a Wisconsin
corporation.
"Indebtedness" of a Person means such Person's (a) obligations for borrowed
money, (b) obligations representing the deferred purchase price of Property or
services (other than accounts payable arising in the ordinary course of such
Person's business payable on terms customary in the trade), (c) obligations,
whether or not assumed, secured by Liens or payable out of the proceeds or
production from Property now or hereafter owned or acquired by such Person, (d)
obligations which are evidenced by notes, acceptances, or other instruments, (e)
obligations of such Person to purchase securities or other property arising out
of or in connection with the sale of the same or substantially similar
securities or property, (f) Capitalized Lease Obligations, (g) Contingent
Obligations, (h) obligations for which such Person is obligated pursuant to or
in respect of a Letter of Credit, (i) Off-Balance Sheet Liabilities, (j)
obligations for which such person is obligated pursuant to or in respect of a
Sale and Leaseback Transaction, (k) Net ▇▇▇▇-to-Market Exposure of Rate Hedging
Agreements and other Financial Contracts, and (l) other obligations for borrowed
money or other financial accommodations which, in accordance with Agreement
Accounting Principles or SAP, as applicable, would be shown as a liability on
the consolidated balance sheet of such Person.
"Initial Closing Date" means December 30, 2002.
"Insurance Subsidiary" means any Subsidiary which is engaged in the
insurance business.
"Interest Coverage Ratio" means, as of any date of determination, the RATIO
of (a) the SUM of (i) Borrower's EBITDA for such period minus (ii) the sum of
all amounts paid out as dividends or other dividend-like distributions by
Borrower or any Subsidiary to any Person other than Borrower or one or more of
its Subsidiaries during such period TO (b) Consolidated Interest Expense for the
period of four Fiscal Quarters ending on such date.
"Interest Period" means, with respect to a LIBOR Advance, a period of one,
two or three months commencing on a Business Day selected by Borrower pursuant
to this Agreement. Such Interest Period shall end on the day which corresponds
numerically to such date one, two or three months thereafter; PROVIDED, that if
there is no such numerically corresponding day in such next, second or third
succeeding month, such Interest Period shall end on the last Business Day of
such next, second or third succeeding month. If an Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period shall
end on the next succeeding Business Day; PROVIDED, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Investment" of a Person means (a) any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; (b) any stocks, bonds, mutual
funds, partnership interests, notes, debentures or other securities owned by
such Person; (c) any deposit accounts and certificates of deposit owned by such
Person; and (d) any structured notes, derivative financial instruments and other
similar instruments or contracts owned by such Person.
"LaSalle" means LaSalle Bank National Association in its individual
capacity, and its successors.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent, the
office, branch, subsidiary or affiliate of such Lender or the Agent listed on
the signature pages hereof or on a Schedule or otherwise selected by such Lender
or the Agent pursuant to SECTION 2.18.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Leverage Ratio" means, as of any date of calculation, the ratio of (a)
Consolidated Indebtedness outstanding on such date to (b) Consolidated Total
Capitalization on such date.
"LIBOR Advance" means an Advance which bears interest at the applicable
LIBOR Rate.
"LIBOR Loan" means a Loan which bears interest at the applicable LIBOR
Rate.
"LIBOR Rate" means, with respect to a LIBOR Advance for the relevant
Interest Period, the rate of interest determined by the Agent equal to the per
annum rate of interest at which United States dollar deposits in an amount
comparable to the amount of the relevant LIBOR Loan and for a period equal to
the relevant Interest Period are offered in the London Interbank Eurodollar
market at 11:00 a.m. (London time) two Business Days prior to the commencement
of each Interest Period, as displayed in the Bloomberg Financial Markets system,
or other authoritative source selected by the Agent in its sole discretion,
divided by a number determined by subtracting from 1.00 the maximum reserve
percentage for determining reserves to be maintained by member banks of the
Federal Reserve System for Eurocurrency liabilities, such rate to remain fixed
for such Interest Period. The Agent's determination of the LIBOR Rate shall be
conclusive, absent manifest error.
"License" means any license, certificate of authority, permit or other
authorization which is required to be obtained from any Governmental Authority
in connection with the operation, ownership or transaction of insurance
business.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's loan made pursuant to
ARTICLE II (or any conversion or continuation thereof) in the form of a
Revolving Loan.
"Loans" means the Revolving Loans.
"Loan Documents" means this Agreement, any Notes issued pursuant to SECTION
2.14, the Guaranty Agreement, the Pledge Agreements and the other documents and
agreements contemplated hereby and executed by Borrower or Holdings in favor of
the Agent or any Lender.
"Material Adverse Effect" means a material adverse effect on (a) the
business, Property, condition (financial or otherwise), operations, performance
or prospects of Borrower and its Subsidiaries taken as a whole, (b) the ability
of Borrower or Holdings to perform its obligations under the Loan Documents to
which it is a party, or (c) the validity or enforceability of any of the Loan
Documents or the rights or remedies of the Agent or the Lenders thereunder.
"Material Indebtedness" is defined in SECTION 7.5.
"Material Insurance Subsidiary" means an Insurance Subsidiary with a
Statutory Capital and Surplus of greater than $7,500,000.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which Borrower or any member of
the Controlled Group is a party to which more than one employer is obligated to
make contributions.
"NAIC" means the National Association of Insurance Commissioners or any
successor thereto, or in lieu thereof, any other association, agency or other
organization performing advisory, coordination or other like functions among
insurance departments, insurance commissioners and similar Governmental
Authorities of the various states of the United States toward the promotion of
uniformity in the practices of such Governmental Authorities.
"Net Available Proceeds" means (a) with respect to any Asset Disposition,
the sum of cash or readily marketable cash equivalents received (including by
way of a cash generating sale or discounting of a note or account receivable)
therefrom, whether at the time of such disposition or subsequent thereto, or (b)
with respect to any sale or issuance of equity securities of Borrower or any
Subsidiary, cash or readily marketable cash equivalents received therefrom,
whether at the time of disposition or subsequent thereto, net, in either case,
of all legal, tax and recording expenses, commissions and other fees and all
costs and expenses incurred and, in the case of an Asset Disposition, net of all
payments made by Borrower or any Subsidiary on any Indebtedness which is secured
by such assets pursuant to a permitted Lien upon or with respect to such assets
or which must, by the terms of such Lien, in order to obtain a necessary consent
to such Asset Disposition, or by applicable law, be repaid out of the proceeds
from such Asset Disposition.
"Net ▇▇▇▇-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Hedging Agreements and other Financial
Contracts. "Unrealized losses" means the fair market value of the cost to such
Person of replacing such Rate Hedging Agreement or Financial Contract as of the
date of determination (assuming the Rate Hedging Agreement or Financial Contract
were to be terminated as of that date), and "unrealized profits" means the fair
market value of the gain to such Person of replacing such Rate Hedging Agreement
or Financial Contract as of the date of determination (assuming such Rate
Hedging Agreement or Financial Contract were to be terminated as of that date).
"Non-U.S. Lender" is defined in SECTION 3.5(D).
"Non-Use Fee Rate" means, at any time, the percentage rate per annum at
which non-use fees shall accrue on the unused amount of the Aggregate
Commitment, as set forth on the PRICING SCHEDULE.
"Notes" means, collectively, any Revolving Notes then issued at the request
of the applicable Lender.
"Notice of Assignment" is defined in SECTION 12.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid interest
on the Loans, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of Borrower to the Lenders or to any Lender,
the Agent or any indemnified party arising under the Loan Documents and any Rate
Hedging Obligations or foreign exchange contracts of Borrower owing to the Agent
or any Lender.
"Off-Balance Sheet Liability" of a Person means (a) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (b) any liability under any Sale and Leaseback
Transaction which does not create a liability on the balance sheet of such
Person, (c) any liability under any financing lease or so-called "synthetic
lease" transaction entered into by such Person, or (d) any obligation arising
with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the
balance sheet of such Person, but excluding Operating Leases.
"Operating Lease" means any lease or other agreement conveying the right to
use of any personal property by Borrower or any Subsidiary, as lessee, other
than any Capitalized Lease, that consists of computers and peripherals,
telephones and telephone systems and mainframe(s) and storage.
"Other Taxes" is defined in SECTION 3.5(B).
"Participants" is defined in SECTION 12.2.1.
"Payment Date" means the last day of each calendar month.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Liens" means Liens described in SECTION 6.15.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which Borrower or any member of the Controlled Group may have any
liability.
"Pledge Agreements" means, collectively, (a) that certain Stock Pledge
Agreement dated as of the date hereof between Borrower and the Agent, and (b)
that certain Stock Pledge Agreement dated as of the date hereof between Holdings
and the Agent, as either may be amended, supplemented or modified from time to
time.
"Pricing Schedule" means the Pricing Schedule attached to and made a part
of this Agreement used to determine the Applicable Margin and the Non-Use Fee
Rate.
"Prime Rate" means, for any day, the rate of interest in effect for such
day as publicly announced from time to time by LaSalle as its prime rate
(whether or not such rate is actually charged by LaSalle). Any change in the
Prime Rate announced by LaSalle shall take effect at the opening of business on
the day specified in the public announcement of such change.
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Pro Rata Share" means, as to any Lender, (a) at any time at which the
Aggregate Commitment remains outstanding, the percentage equivalent (expressed
as a decimal rounded to the ninth decimal place) at such time of such Lender's
Commitment divided by the Aggregate Commitment, and (b) after the termination of
the Aggregate Commitment, the percentage equivalent (expressed as a decimal,
rounded to the ninth decimal place) at such time of the principal amount of such
Lender's outstanding Loans divided by the aggregate principal amount of the
outstanding Loans of all of the Lenders.
"Purchasers" is defined in SECTION 12.3.1.
"Quarterly Statement" means the quarterly statutory financial statement of
any Insurance Subsidiary required to be filed with the insurance commissioner
(or similar authority) of its jurisdiction of incorporation or, if no specific
form is so required, in the form of financial statements permitted by such
insurance commissioner (or such similar authority) to be used for filing
quarterly statutory financial statements and shall contain the type of financial
information permitted by such insurance commissioner (or such similar authority)
to be disclosed therein, together with all exhibits or schedules filed
therewith.
"Rate Hedging Agreement" means an agreement, device or arrangement
providing for payments which are related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to,
dollar-denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts and warrants.
"Rate Hedging Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all Rate
Hedging Agreements, and (b) any and all cancellations, buy backs, reversals,
terminations or assignments of any Rate Hedging Agreement.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Regulation T" means Regulation T of the Board of Governors of the Federal
Reserve System as from time to time in effect and shall include any successor or
other regulation or official interpretation of such Board of Governors relating
to the extension of credit by securities brokers and dealers for the purpose of
purchasing or carrying margin stocks applicable to such Persons.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Regulation X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and shall include any successor or
other regulation or official interpretation of said Board of Governors relating
to the extension of credit by the specified lenders for the purpose of
purchasing or carrying margin stocks applicable to such Persons.
"Replacement Lender" is defined in SECTION 3.7.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event; PROVIDED, that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.
"Reports" is defined in SECTION 9.6.
"Required Lenders" means those Lenders in the aggregate having at least
66-2/3% of the Aggregate Commitment.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Revolving Note" means any promissory note issued at the request of a
Lender pursuant to SECTION 2.16 in the form of EXHIBIT C.
"Revolving Loan" is defined in SECTION 2.1.
"Risk Based Capital Act" means the Risk-Based Capital (RBC) for Life and/or
Health Insurers Model Act as in effect as the date of this Agreement.
"S&P" means Standard and Poor's Ratings Service, a division of The McGraw
Hill Companies, Inc.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"SAP" means, with respect to any Insurance Subsidiary, the statutory
accounting practices prescribed or permitted by the insurance commissioner (or
other similar authority) in the jurisdiction of such Person for the preparation
of annual statements and other financial reports by insurance companies of the
same type as such Person in effect from time to time, applied in a manner
consistent with those used in preparing the financial statements referred to in
SECTION 5.4(C) and (D).
"Schedule" refers to a specific schedule to this Agreement, unless another
document is specifically referenced.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Single Employer Plan" means a Plan maintained by Borrower or any member of
the Controlled Group for employees of Borrower or any member of the Controlled
Group.
"Statutory Capital and Surplus" means, with respect to any Insurance
Subsidiary at any time, the capital and surplus of such Insurance Subsidiary at
such time, as determined in accordance with SAP ("Liabilities, Surplus and Other
Funds" statement, Page 3, Column 1, Line 38 of the Annual Statement).
"Statutory Net Income" means, with respect to any Insurance Subsidiary for
any computation period, the net income earned by such Insurance Subsidiary
during such period, as determined in accordance with SAP ("Summary of
Operations" statement, Page 4, Column 1, Line 33 of the Annual Statement).
"Statutory Surplus" means, with respect to any Insurance Subsidiary at any
time, the surplus as regards policyholders of such Insurance Subsidiary at such
time, as determined in accordance with SAP ("Liabilities, Surplus and Other
Funds" statement, Page 3, Column 1, Line 37 of the Annual Statement).
"Subordinated Indebtedness" shall mean unsecured Indebtedness of Borrower
or any of its Subsidiaries which has subordination terms, covenants, pricing and
other terms which have been approved in writing by the Required Lenders.
"Subsidiary" of a Person means (a) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(b) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of Borrower.
"Substantial Portion" means, with respect to the Property of any Person,
Property which (a) represents more than 10% of the consolidated assets of such
Person as would be shown in the consolidated financial statements of such Person
as at the end of the Fiscal Quarter next preceding the date on which such
determination is made, or (b) is responsible for more than 10% of the
consolidated net revenues or of the consolidated net income of such Person as
reflected in the consolidated financial statements as at the end of the Fiscal
Quarter next preceding the date on which such determination is made using the
results of that Fiscal Quarter and each of the three immediately preceding
Fiscal Quarters.
"Taxes" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes.
"Transferee" is defined in SECTION 12.4.
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance or a LIBOR Advance.
"Unfunded Liabilities" means the amount (if any) by which the present value
of all vested and unvested accrued benefits under all Single Employer Plans
exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"UWLIC" means United Wisconsin Life Insurance Company, a Wisconsin life
insurance company.
"Wholly-Owned Subsidiary" of a Person means (a) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (b) any partnership, limited liability company, association,
joint venture or similar business organization 100% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms. References herein to particular columns,
lines or sections of any Person's Annual Statement shall be deemed, where
appropriate, to be references to the corresponding column, line or section of
such Person's Quarterly Statement, or if no such corresponding column, line or
section exists or if any report form changes, then to the corresponding item
referenced thereby. References herein to the Risk Based Capital Act shall be
deemed to be references to such act as in effect on the date of this Agreement;
PROVIDED, that the Agent, the Lenders and Borrower agree to make mutually
acceptable modifications to SECTION 6.19.5 hereof following the request by any
thereof upon any modification to such act so as to equitably reflect such
modifications in order that the criteria for evaluating the Insurance
Subsidiaries will be the same after such modifications as if such modifications
had not occurred. Each accounting term used herein which is not otherwise
defined herein shall be defined in accordance with Agreement Accounting
Principles unless otherwise specified.
In the event that any changes in Agreement Accounting Principles and/or SAP
occur after the date of this Agreement and such changes result in a material
variation in the method of calculation of financial covenants or other terms of
this Agreement, then Borrower, the Agent and the Lenders agree to amend such
provisions of this Agreement so as to equitably reflect such changes in order
that the criteria for evaluating Borrower's financial condition will be the same
after such changes as if such changes had not occurred.
ARTICLE II
THE CREDITS
2.1. COMMITMENT. (a) From and including the date of this Agreement and
prior to the Facility Termination Date, each Lender severally agrees, on the
terms and conditions set forth in this Agreement, to make Loans (each such Loan,
a "REVOLVING LOAN") to Borrower from time to time in amounts which shall not
exceed in the aggregate at any one time outstanding the amount of its
Commitment. Subject to the terms of this Agreement, Borrower may borrow, repay
and reborrow Revolving Loans at any time prior to the Facility Termination Date.
The Commitments to lend hereunder shall expire on the Facility Termination Date.
(b) Borrower hereby agrees that if at any time, as a result in
reductions in the Aggregate Commitment pursuant to SECTION 2.8 or otherwise,
the outstanding principal amount of the Loans exceeds the Aggregate Commitment,
Borrower shall repay immediately its then outstanding Loans in such amount as
may be necessary to eliminate such excess.
2.2. REQUIRED PAYMENTS; TERMINATION. Any outstanding Advances and all other
unpaid Obligations shall be paid in full by Borrower on the Facility Termination
Date.
2.3. RATABLE LOANS. Each Advance hereunder shall consist of Revolving Loans
made from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment.
2.4. TYPES OF ADVANCES. The Advances may be Floating Rate Advances or LIBOR
Advances, or a combination thereof, selected by Borrower in accordance with
SECTIONS 2.9 and 2.10.
2.5. NON-USE FEE; REDUCTIONS IN AGGREGATE COMMITMENT. Borrower agrees to
pay to the Agent for the account of each Lender a non-use fee at a per annum
rate equal to the Non-Use Fee Rate times such Lender's Pro Rata Share (as
adjusted from time to time) of the daily average of the unused amount of the
Aggregate Commitment from the date hereof to and including the Facility
Termination Date, payable in arrears on the last day of each calendar quarter
and on the Facility Termination Date. For purposes of calculating usage
hereunder for any particular day, the Aggregate Commitment shall be deemed used
to the extent of the aggregate principal amount of all outstanding Revolving
Loans on such day. Borrower may permanently reduce the Aggregate Commitment in
whole, or in part ratably among the Lenders, in a minimum amount of $1,000,000
(and in multiples of $500,000 if in excess thereof) upon at least three Business
Days' written notice to the Agent, which notice shall specify the amount of any
such reduction; PROVIDED, that the amount of the Aggregate Commitment may not be
reduced below the aggregate principal amount of the outstanding Advances. All
accrued non-use fees shall be payable on the effective date of any termination
or reduction of the obligations of the Lenders to make Loans hereunder.
2.6. MINIMUM AMOUNT OF EACH ADVANCE. Each Advance shall be in the minimum
amount of $1,000,000 (and in multiples of $500,000 if in excess thereof);
PROVIDED, that any Floating Rate Advance may be in the amount of the unused
Aggregate Commitment.
2.7. OPTIONAL PRINCIPAL PAYMENTS. Borrower may from time to time pay,
without penalty or premium, all outstanding Advances or, in a minimum aggregate
amount of $1,000,000 or any integral multiple of $500,000 in excess thereof, any
portion of the outstanding Advances upon two Business Days' prior notice to the
Agent, subject, in the case of LIBOR Advances, to the payment of any funding
indemnification amounts required by SECTION 3.4 but otherwise without penalty or
premium.
2.8. MANDATORY COMMITMENT REDUCTIONS. (a) Borrower shall make permanent
reductions in the Aggregate Commitment in amounts equal to the following:
(i) within 30 days after the receipt thereof by Borrower or any
Subsidiary, an amount equal to 50% of the aggregate Net Available Proceeds
realized upon all Asset Dispositions of $1,000,000 or greater in any Fiscal
Year of Borrower; PROVIDED, that no such prepayment or commitment reduction
shall be required (A) if such amount is less than $1,000,000 in any Fiscal
Year, or (B) as a result of any Asset Disposition permitted pursuant to
SECTION 6.13(A), (B) or (C) ; and
(ii) within 30 days after the receipt thereof by Borrower or any
of its Subsidiaries an amount equal to 50% of the Net Available Proceeds
realized upon the sale by Borrower or such Subsidiary of any of its equity
securities (including the reissuance of any treasury stock).
(b) Any reduction in the Aggregate Commitment pursuant to this
SECTION 2.8 or otherwise shall ratably reduce the Commitment of each
Lender.
2.9. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR NEW ADVANCES.
Borrower shall select the Type of Advance and, in the case of each LIBOR
Advance, the Interest Period applicable thereto from time to time. Borrower
shall give the Agent irrevocable notice (a "BORROWING NOTICE") not later than
11:00 a.m. (Chicago time) on the Borrowing Date of each Floating Rate Advance
and three Business Days before the Borrowing Date for each LIBOR Advance,
specifying:
(a) the Borrowing Date, which shall be a Business Day, of such
Advance,
(b) the aggregate amount of such Advance,
(c) the Type of Advance selected, and
(d) in the case of each LIBOR Advance, the Interest Period applicable
thereto, which shall end on or prior to the Facility Termination
Date.
Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Revolving Loan or Loans in funds immediately available in
Chicago to the Agent at its address specified pursuant to ARTICLE XIII. The
Agent will make the funds so received from the Lenders available to Borrower at
the Agent's aforesaid address. No more than five (5) LIBOR Loans may be
outstanding at any one time.
2.10. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES. Floating Rate
Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are converted into LIBOR Advances pursuant to this SECTION 2.10 or
are repaid in accordance with SECTION 2.7. Each LIBOR Advance shall continue as
a LIBOR Advance until the end of the then applicable Interest Period therefor,
at which time such LIBOR Advance shall be automatically converted into a
Floating Rate Advance unless (x) such LIBOR Advance is or was repaid in
accordance with SECTION 2.7 or (y) Borrower shall have given the Agent a
Conversion/Continuation Notice (as defined below) requesting that, at the end of
such Interest Period, such LIBOR Advance continue as a LIBOR Advance for the
same or another Interest Period. Subject to the terms of SECTION 2.6, Borrower
may elect from time to time to convert all or any part of a Floating Rate
Advance into a LIBOR Advance. Borrower shall give the Agent irrevocable notice
(a "CONVERSION/CONTINUATION NOTICE") of each conversion of a Floating Rate
Advance into a LIBOR Advance or continuation of a LIBOR Advance not later than
10:00 a.m. (Chicago time) at least three Business Days prior to the date of the
requested conversion or continuation, specifying:
(a) the requested date of such conversion or continuation, which shall
be a Business Day,
(b) the aggregate amount and Type of the Advance which is to be
converted or continued, and
(c) the amount of such Advance which is to be converted into or
continued as a LIBOR Advance and the duration of the Interest
Period applicable thereto.
2.11. INTEREST RATES AND CHANGES IN RATES, ETC. Each Floating Rate Advance
shall bear interest on the outstanding principal amount thereof, for each day
from and including the date such Advance is made or is automatically converted
from a LIBOR Advance into a Floating Rate Advance pursuant to SECTION 2.10, to
but excluding the date it is paid or is converted into a LIBOR Advance pursuant
to SECTION 2.10 hereof, at a rate per annum equal to the Floating Rate for such
day. Changes in the rate of interest on that portion of any Advance maintained
as a Floating Rate Advance will take effect simultaneously with each change in
the Floating Rate. Each LIBOR Advance shall bear interest on the outstanding
principal amount thereof from and including the first day of the Interest Period
applicable thereto to (but not including) the last day of such Interest Period
at the interest rate determined by the Agent as applicable to such LIBOR Advance
based upon Borrower's selections under SECTION 2.9 and 2.10 and otherwise in
accordance with the terms hereof. No Interest Period may end after the Facility
Termination Date.
2.12. RATES APPLICABLE AFTER DEFAULT. Notwithstanding anything to the
contrary contained in SECTION 2.9 or 2.10, during the continuance of a Default
or Unmatured Default the Required Lenders may, at their option, by notice to
Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of SECTION 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued as a LIBOR Advance. During the continuance of a
Default the Required Lenders may, at their option, by notice to Borrower (which
notice may be revoked at the option of the Required Lenders notwithstanding any
provision of SECTION 8.2 requiring unanimous consent of the Lenders to changes
in interest rates), declare that each Loan shall bear interest at the higher of
the LIBOR Rate or the Floating Rate then in effect, plus the applicable margin
then in effect from time to time, plus 2.00% per annum; PROVIDED, that during
the continuance of a Default under SECTION 7.6 or 7.7, the interest rate set
forth above shall be applicable to all Loans without any election or action on
the part of the Agent or any Lender.
2.13. METHOD OF PAYMENT. All payments of the Obligations hereunder shall be
made, without setoff, deduction, or counterclaim, in immediately available funds
to the Agent at the Agent's address specified pursuant to ARTICLE XIII, or at
any other Lending Installation of the Agent specified in writing by the Agent to
Borrower, by noon (local time) on the date when due and shall be applied ratably
by the Agent among the Lenders. Each payment delivered to the Agent for the
account of any Lender shall be delivered promptly by the Agent to such Lender in
the same type of funds that the Agent received at its address specified pursuant
to ARTICLE XIII or at any Lending Installation specified in a notice received by
the Agent from such Lender. The Agent is hereby authorized to charge the account
of Borrower maintained with LaSalle for each payment of principal, interest and
fees payable thereby as it becomes due hereunder.
2.14. EVIDENCE OF INDEBTEDNESS.
(a) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the Obligations of Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder.
(b) The Agent shall also maintain accounts in which it will record (i)
the amount of each Loan made hereunder, the Type thereof and the Interest Period
with respect thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from Borrower to each Lender ereunder and
(iii) the amount of any sum received by the Agent hereunder from Borrower and
each Lender's share thereof.
(c) The entries maintained in the accounts maintained pursuant to
paragraphs (a) and (b) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; PROVIDED, that the failure of the
Agent or any Lender to maintain such accounts or any error therein shall not in
any manner affect the obligation of Borrower to repay the Obligations in
accordance with their terms.
(d) Each Lender's Commitment for Revolving Loans shall be evidenced by
a promissory note (a "REVOLVING NOTE"). Borrower shall prepare, execute and
deliver to such Lender a Revolving Note payable to the order of such Lender in a
form supplied by the Agent. Thereafter, the Loans evidenced by such Revolving
Note and interest thereon shall at all times (including after any assignment
pursuant to SECTION 12.3) be represented by one or more Revolving Notes payable
to the order of the payee named therein or any assignee pursuant to SECTION
12.3, except to the extent that any such Lender or assignee subsequently returns
any such Revolving Note for cancellation and requests that such Revolving Loans
once again be evidenced as described in paragraphs (a) and (b) above.
2.15. TELEPHONIC NOTICES. Borrower hereby authorizes the Lenders and the
Agent to extend, convert or continue Advances, effect selections of Types of
Advances and to transfer funds, based in each case on telephonic notices made by
any person or persons the Agent or any Lender in good faith believes to be
acting on behalf of Borrower. Borrower agrees to deliver promptly to the Agent a
written confirmation, if such confirmation is requested by the Agent or any
Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.
2.16. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS. Interest accrued on
each Floating Rate Loan shall be payable in arrears on each Payment Date,
commencing with the first such date to occur after the date hereof and at
maturity. Interest accrued on each LIBOR Loan shall be payable on the last day
of its applicable Interest Period, on any date on which the LIBOR Loan is
prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued
on each LIBOR Loan having an Interest Period longer than three months shall also
be payable on the last day of each three-month interval during such Interest
Period. Interest and non-use fees shall be calculated for actual days elapsed on
the basis of a 360-day year. Interest shall be payable for the day an Advance is
made but not for the day of any payment on the amount paid if payment is
received prior to noon (local time) at the place of payment. If any payment of
principal of or interest on an Advance or payment of any fees shall become due
on a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal payment, such extension
of time shall be included in computing interest in connection with such payment.
2.17. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND COMMITMENT
REDUCTIONS. Promptly after receipt thereof, the Agent will notify each Lender of
the contents of each Aggregate Commitment reduction notice, Borrowing Notice,
Conversion/Continuation Notice, and repayment notice received by it hereunder.
The Agent will notify each Lender of the interest rate applicable to each LIBOR
Advance promptly upon determination of such interest rate and will give each
Lender prompt notice of each change in the Floating Rate.
2.18. LENDING INSTALLATIONS. Each Lender may book its Loans at any Lending
Installation selected by such Lender and may change its Lending Installation
from time to time. All terms of this Agreement shall apply to any such Lending
Installation and the Loans and any Notes issued hereunder shall be deemed held
by each Lender for the benefit of such Lending Installation. Each Lender may, by
written notice to the Agent and Borrower in accordance with ARTICLE XIII,
designate replacement or additional Lending Installations through which Loans
will be made by it and for whose account Loan payments are to be made.
2.19. NON-RECEIPT OF FUNDS BY THE AGENT. Unless Borrower or a Lender, as
the case may be, notifies the Agent prior to the date on which it is scheduled
to make payment to the Agent of (a) in the case of a Lender, the proceeds of a
Loan or (b) in the case of Borrower, a payment of principal, interest or fees to
the Agent for the account of the Lenders, that it does not intend to make such
payment, the Agent may assume that such payment has been made. The Agent may,
but shall not be obligated to, make the amount of such payment available to the
intended recipient in reliance upon such assumption. If such Lender or Borrower,
as the case may be, has not in fact made such payment to the Agent, the
recipient of such payment shall, on demand by the Agent, repay to the Agent the
amount so made available together with interest thereon in respect of each day
during the period commencing on the date such amount was so made available by
the Agent until the date the Agent recovers such amount at a rate per annum
equal to (x) in the case of payment by a Lender, the Federal Funds Effective
Rate for such day or (y) in the case of payment by Borrower, the interest rate
applicable to the relevant Loan.
ARTICLE III
YIELD PROTECTION; TAXES
3.1. YIELD PROTECTION. If, on or after the Initial Closing Date, any Lender
determines that the adoption of or change in any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law), or any change in the interpretation or
administration thereof by any governmental or quasi-governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender or applicable Lending
Installation with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency:
(a) subjects any Lender or any applicable Lending Installation to any
Taxes, or changes the basis of taxation of payments (other than with
respect to Excluded Taxes) to any Lender in respect of its LIBOR
Loans, or
(b) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by,
any Lender or any applicable Lending Installation (other than reserves
and assessments taken into account in determining the interest rate
applicable to LIBOR Advances), or
(c) imposes any other condition the result of which is to increase the
cost to any Lender or any applicable Lending Installation of
agreeing to make or making, funding or maintaining its LIBOR Loans or
reduces any amount receivable by any Lender or any applicable Lending
Installation in connection with its LIBOR Loans, or requires any
Lender or any applicable Lending Installation to make any payment
calculated by reference to the amount of LIBOR Loans held or interest
received by it, by an amount deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation of making, funding or maintaining its LIBOR
Loans or Commitment or to reduce the return received by such Lender or
applicable Lending Installation in connection with such LIBOR Loans or
Commitment, then, within 15 days of demand by such Lender, Borrower shall pay
such Lender such additional amount or amounts as will compensate such Lender
for such increased cost or reduction in amount received.
3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender determines the
amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change, then, within 15 days of demand by such
Lender, Borrower shall pay such Lender the amount necessary to compensate for
any shortfall in the rate of return on the portion of such increased capital
which such Lender determines is attributable to this Agreement, its Loans or its
Commitment to make Loans hereunder (after taking into account such Lender's
policies as to capital adequacy); PROVIDED, that if any Lender fails to notify
Borrower within 180 days after it obtains actual knowledge of any event giving
rise to the payment of additional amounts under this SECTION 3.2, then such
Lender shall only be entitled to payment for additional amounts incurred from
and after the date which is 180 days prior to the date that such Lender gives
such notice. "CHANGE" means (a) any change after the Initial Closing Date in or
change in the interpretation of the Risk-Based Capital Guidelines or (b) any
adoption of or change in or change in the interpretation of any other law,
governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
date of this Agreement which affects the amount of capital required or expected
to be maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "RISK-BASED CAPITAL GUIDELINES" means (x) the risk-based
capital guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (y) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
3.3. AVAILABILITY OF TYPES OF ADVANCES. If any Lender determines that
maintenance of its LIBOR Loans at a suitable Lending Installation would violate
any applicable law, rule, regulation, or directive, whether or not having the
force of law, or if the Required Lenders determine that (a) deposits of a type
and maturity appropriate to match fund LIBOR Advances are not available or (b)
the interest rate applicable to a Type of Advance does not accurately reflect
the cost of making or maintaining such Advance, then the Agent shall suspend the
availability of the affected Type of Advance and require any affected LIBOR
Advances to be repaid or converted to Floating Rate Advances, subject to the
payment of any funding indemnification amounts required by SECTION 3.4.
3.4. FUNDING INDEMNIFICATION. If any payment of a LIBOR Advance occurs on a
date which is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment or otherwise, or a LIBOR Advance is not made
on the date specified by Borrower for any reason other than default by the
Lenders, Borrower will indemnify each Lender for any loss or cost incurred by it
resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain such LIBOR
Advance.
3.5. TAXES.
(a) All payments by Borrower to or for the account of any Lender or
the Agent hereunder or under any Note shall be made free and clear of and
without deduction for any and all Taxes. If Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder to any Lender
or the Agent, (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this SECTION 3.5) such Lender or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) Borrower shall make such deductions, (iii)
Borrower shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (iv) Borrower shall furnish to the Agent the
original copy of a receipt evidencing payment thereof within 30 days after such
payment is made.
(b) In addition, Borrower hereby agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under any Note or
from the execution or delivery of, or otherwise with respect to, this Agreement
or any Note ("OTHER TAXES").
(c) Borrower hereby agrees to indemnify the Agent and each Lender for
the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed on amounts payable under this SECTION 3.5) paid
by the Agent or such Lender and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, in each case whether or not
such Taxes or Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. Payments due under this indemnification shall
be made within 30 days of the date the Agent or such Lender makes demand
therefor pursuant to SECTION 3.6.
(d) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "NON-U.S. LENDER") agrees that it
will, not less than ten Business Days after the date of this Agreement, (i)
deliver to each of Borrower and the Agent two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224, certifying in either case
that such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, and (ii)
deliver to each of Borrower and the Agent a United States Internal Revenue Form
W-8 or W-9, as the case may be, and certify that it is entitled to an exemption
from United States backup withholding tax. Each Non-U.S. Lender further
undertakes to deliver to each of Borrower and the Agent (x) renewals or
additional copies of such form (or any successor form) on or before the date
that such form expires or becomes obsolete, and (y) after the occurrence of any
event requiring a change in the most recent forms so delivered by it, such
additional forms or amendments thereto as may be reasonably requested by
Borrower or the Agent. All forms or amendments described in the preceding
sentence shall certify that such Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes, unless an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form or amendment with respect to it and such Lender advises Borrower and the
Agent that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.
(e) For any period during which a Non-U.S. Lender has failed to
provide Borrower with an appropriate form pursuant to clause (d) above (unless
such failure is due to a change in treaty, law or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
this SECTION 3.5 with respect to Taxes imposed by the United States; PROVIDED,
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (d) above, Borrower shall take such
steps as such Non-U.S. Lender shall reasonably request to assist such Non-U.S.
Lender to recover such Taxes.
(f) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
Borrower (with a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate.
3.6. LENDER STATEMENTS; SURVIVAL OF INDEMNITY. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its LIBOR Loans to reduce any liability of Borrower to such Lender
under SECTIONS 3.1, 3.2 and 3.5 or to avoid the unavailability of LIBOR Advances
under SECTION 3.3, so long as such designation is not, in the judgment of such
Lender, disadvantageous to such Lender. Each Lender shall deliver a written
statement of such Lender to Borrower (with a copy to the Agent) as to the amount
due, if any, under SECTION 3.1, 3.2, 3.4 or 3.5. Such written statement shall
set forth in reasonable detail the calculations upon which such Lender
determined such amount and shall be final, conclusive and binding on Borrower in
the absence of manifest error. Determination of amounts payable under such
Sections in connection with a LIBOR Loan shall be calculated as though each
Lender funded its LIBOR Loan through the purchase of a deposit of the type and
maturity corresponding to the deposit used as a reference in determining the
LIBOR Rate applicable to such Loan, whether in fact that is the case or not.
Unless otherwise provided herein, the amount specified in the written statement
of any Lender shall be payable on demand after receipt by Borrower of such
written statement. The obligations of Borrower under SECTIONS 3.1, 3.2, 3.4 and
3.5 shall survive payment of the Obligations and termination of this Agreement.
3.7. SUBSTITUTION OF LENDER. Upon the receipt by Borrower from any Lender
(an "AFFECTED LENDER") of a claim for compensation under SECTION 3.1, 3.2 or 3.5
or a notice in accordance with SECTION 3.3 regarding the unavailability of a
Type of Advance, Borrower may: (a) request the Affected Lender to use
commercially reasonable efforts to obtain a replacement bank or other entity
satisfactory to Borrower to acquire and assume all or a ratable part of all of
such Affected Lender's Loans and Commitment at the face amount thereof (a
"REPLACEMENT LENDER"); (b) request one or more of the other Lenders to acquire
and assume all or part of such Affected Lender's Loans and Commitment (which
request each such other Lender may decline or agree to in its sole discretion);
or (c) designate a Replacement Lender. Any such designation of a Replacement
Lender under clause (a) or (c) shall be subject to the prior written consent of
the Agent (which consent shall not unreasonably be withheld). Any transfer of
Loans or Commitment pursuant to this Section shall be made in accordance with
SECTION 12.3 and SECTION 3.4, if applicable.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. EFFECTIVENESS. This Agreement shall not be effective unless Borrower
shall have furnished to the Agent with sufficient copies for the Lenders:
(a) GOOD STANDING CERTIFICATES. Copies of a certificate of existence
(or its equivalent) for each of Borrower, Holdings and UWLIC, each
certified by the appropriate governmental officer in its jurisdiction of
incorporation.
(b) RESOLUTIONS. Copies, certified by the Secretary or Assistant
Secretary of each of Borrower and Holdings of its Board of Directors'
resolutions authorizing the transactions described herein and the entry
into the Loan Documents to which Borrower or Holdings, as applicable, is a
party and identifying by name and title the Authorized Officers of Borrower
or Holdings authorized to sign the Loan Documents to which Borrower or
Holdings, as applicable, is a party, and, in respect of Borrower, to make
borrowings hereunder.
(c) SECRETARY'S CERTIFICATE. Incumbency certificates, executed by the
Secretary or Assistant Secretary of each of Borrower and Holdings, which
shall identify by name and title and bear the signatures of the Authorized
Officers identified in the resolutions of Borrower or Holdings,
respectively, upon which certificates the Agent and the Lenders shall be
entitled to rely until informed of any change in writing by Borrower.
(d) OFFICER'S CERTIFICATE. A certificate, dated the date of this
Agreement, signed by an Authorized Officer of Borrower, in form and
substance satisfactory to the Agent, to the effect that: (i) on such date
(both before and after giving effect to the making of the Loans hereunder,
the execution and delivery of the Guaranty Agreement and the Pledge
Agreements and the consummation of the other transactions contemplated
hereby and by the other Loan Documents (collectively, the "CLOSING
TRANSACTIONS") no Default or Unmatured Default has occurred and is
continuing; (ii) no injunction or temporary restraining order which would
prohibit the making of the Loans or the consummation of any of the Closing
Transactions, or other litigation which could reasonably be expected to
have a Material Adverse Effect, is pending or, to the best of such Person's
knowledge, threatened; (iii) all orders, consents, approvals, licenses,
authorizations or validations of, or filings, recordings or registrations
with, or exemptions by, any governmental or public body or authority, or
any subdivision thereof, required to make or consummate the Closing
Transactions have been or, prior to the time required, will have been,
obtained, given, filed or taken and are or will be in full force and effect
(or Borrower or Holdings, as applicable, have obtained effective relief
with respect to the application thereof) and all applicable waiting periods
have expired; (iv) each of the representations and warranties set forth in
ARTICLE V of this Agreement is true and correct on and as of such date; and
(v) since the date of the most recent Financial Statements (as hereinafter
defined) delivered to Agent, no event or change has occurred that has
caused or evidences a Material Adverse Effect.
(e) LEGAL OPINION. A written opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel
to Borrower and the Guarantors, addressed to the Agent and the Lenders in
form and substance reasonably acceptable to the Agent and its counsel.
(f) LETTERS OF DIRECTION. Written money transfer instructions with
respect to the Loans in form and substance acceptable to the Agent and its
counsel addressed to the Agent and signed by an Authorized Officer,
together with such other related money transfer authorizations as the Agent
may have reasonably requested.
(g) CREDIT AGREEMENT. Executed originals of this Agreement in form and
substance satisfactory to the Lenders.
(h) NOTES. Executed originals of such Notes as may be requested by a
Lender pursuant to SECTION 2.14 payable to the order of each such
requesting Lender.
(i) GUARANTY AGREEMENT. An executed original of the Guaranty Agreement
in form and substance satisfactory to the Lenders.
(j) PLEDGE AGREEMENTS. Executed originals of the Pledge Agreements in
form and substance satisfactory to the Lenders together with:
(1) all of the pledged securities referred to therein, endorsed
in blank or together with undated stock powers executed in blank, as
appropriate;
(2) all regulatory approvals required in connection with the
initial pledge of the stock of each Material Insurance Subsidiary
shall have been obtained and remain in full force and effect; and
(3) evidence that all other actions necessary or, in the
reasonable opinion of the Agent, desirable to perfect and protect the
security interests purported to be created by the Pledge Agreements
have been taken or will be taken promptly after the Initial Closing
Date.
(k) OTHER LOAN DOCUMENTS. Executed originals of such other Loan
Documents in form and substance satisfactory to the Lenders, together with
all schedules, exhibits, certificates, instruments, opinions, documents and
financial statements required to be delivered pursuant hereto and thereto,
also in form and substance satisfactory to the Lenders.
(l) SOLVENCY CERTIFICATE. A written solvency certificate from the vice
president and controller of Borrower in form and content satisfactory to
the Agent, dated the date of this Agreement, with respect to the value,
solvency and other factual information of, or relating to, as the case may
be, Borrower and its Subsidiaries, taken as a whole, both before and after
giving effect to the Closing Transactions.
(m) REGULATORY MATTERS. Receipt of any required regulatory approvals
from any Governmental Authority with respect to the Closing Transactions.
(n) CONSOLIDATED NET WORTH. A written certificate from an Authorized
Officer of Borrower that Borrower's Consolidated Net Worth on the Initial
Closing Date is not less than $175,000,000.
(o) INDEBTEDNESS. On the Initial Closing Date and after giving effect
to the consummation of the transactions described herein, the only
Indebtedness of Borrower and its Subsidiaries shall consist of (a) the
Obligations incurred pursuant to the Loan Documents and (b) Indebtedness
reflected on Schedule 5.28 (other than Indebtedness in a principal amount
not exceeding $50,000 for a single item of Indebtedness and $100,000 in the
aggregate for all such Indebtedness listed).
(p) PAYMENT OF FEES AND EXPENSES. All costs, fees and expenses
(including, without limitation, reasonable legal fees and expenses), and
all other compensation contemplated by this Agreement or the other Loan
Documents, due to the Agent shall have been paid to the extent due.
(q) INSURANCE. The Agent shall have received evidence of insurance
complying with the terms hereof for the business and properties of Borrower
and its Subsidiaries, in form and substance reasonably satisfactory to the
Agent.
(r) OTHER. Such other documents as the Agent, any Lender or their
counsel may have reasonably requested including information regarding
litigation, tax, accounting, labor, insurance, pension liabilities (actual
or contingent), real estate leases, material contracts, debt agreements,
property ownership, and contingent liabilities of Borrower and its
Subsidiaries.
4.2. EACH ADVANCE. The Lenders shall not be required to make any Advance
(other than an Advance that, after giving effect thereto and to the application
of the proceeds thereof, does not increase the aggregate amount of outstanding
Advances), unless on the applicable Borrowing Date:
(a) There exists no Default or Unmatured Default.
(b) The representations and warranties contained in the Loan Documents
are true and correct in all material respects as of such Borrowing
Date except to the extent any such representation or warranty
is stated to relate solely to an earlier date, in which case such
representation or warranty shall have been true and correct on and
as of such earlier date.
(c) All legal matters incident to the making of such Advance shall be
reasonably satisfactory to the Lenders and their counsel.
Each Borrowing Notice and/or Conversion/Continuation Notice with respect to each
such Advance shall constitute a representation and warranty by Borrower that the
conditions contained in SECTION 4.2(A) and (B) have been satisfied. Any Lender
may require a duly completed compliance certificate in substantially the form of
EXHIBIT A as a condition to making an Advance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to the Lenders that, both before and after
giving effect to the Closing Transactions:
5.1. EXISTENCE AND STANDING. Each of Borrower and each Subsidiary is a
corporation, partnership (in the case of Subsidiaries only) or limited liability
company duly and properly incorporated or organized, as the case may be, validly
existing and (to the extent such concept applies to such entity) in good
standing under the laws of its jurisdiction of incorporation or organization and
has all requisite authority to conduct its business in each jurisdiction in
which its business is conducted, except where the failure to be so qualified,
licensed or authorized could not reasonably be expected to have a Material
Adverse Effect.
5.2. AUTHORIZATION AND VALIDITY. Each of Borrower and Holdings has the
power and authority and legal right to execute and deliver the Loan Documents to
which it is a party and to perform its obligations thereunder. The execution and
delivery by Borrower and Holdings of the Loan Documents to which it is a party
and the performance of its obligations thereunder have been duly authorized by
proper corporate proceedings, and the Loan Documents to which each such Person
is a party constitute legal, valid and binding obligations of such Person
enforceable against such Person in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.
5.3. NO CONFLICT; GOVERNMENT CONSENT. Neither the execution and delivery by
any of Borrower or Holdings of the Loan Documents to which it is a party, the
consummation of the Closing Transactions nor compliance with the provisions of
the Loan Documents will, or at the relevant time did, violate (a) any law, rule,
regulation (including Regulations T, U and X), order, writ, judgment,
injunction, decree or award binding on Borrower or any of its Subsidiaries, (b)
Borrower's or any of its Subsidiaries' articles or certificate of incorporation,
partnership agreement, certificate of partnership, articles or certificate of
organization, by-laws, or operating or other management agreement, as the case
may be, or (c) the provisions of any indenture, instrument or agreement to which
Borrower or any of its Subsidiaries is a party or is subject, or by which it, or
its Property, is bound, or conflict with or constitute a default thereunder, or
result in, or require, the creation or imposition of any Lien in, of or on the
Property of Borrower or any Subsidiary pursuant to the terms of any such
indenture, instrument or agreement, except for any violation of any such law,
rule, regulation, order, writ, judgment, injunction, decree, award, indenture,
instrument or agreement that could not reasonably be expected to have a Material
Adverse Effect. Except as set forth in SCHEDULE 5.3 hereto, no order, consent,
adjudication, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, or other action in respect of
any Governmental Authority, or any subdivision thereof, or any other Person
(including without limitation the stockholders of any Person) is required to be
obtained by Borrower or any Subsidiary in connection with the execution and
delivery of the Loan Documents, the borrowings under this Agreement, the payment
and performance by Borrower of the Obligations, the execution and delivery of
the Guaranty Agreement and the Pledge Agreements or the legality, validity,
binding effect or enforceability of any of the Loan Documents or the
consummation of any of the Closing Transactions.
5.4. FINANCIAL STATEMENTS. Borrower has heretofore furnished to the Agent
and each of the Lenders (a) the December 31, 2001 audited consolidated financial
statements of Borrower and its Subsidiaries, (b) the unaudited consolidated
financial statements of Borrower and its Subsidiaries through September 30,
2002, (c) the December 31, 2001 audited Annual Statement of each Material
Insurance Subsidiary and (d) the September 30, 2002 Quarterly Statement of each
Material Insurance Subsidiary (collectively, the "FINANCIAL STATEMENTS"). Each
of the Financial Statements was prepared in accordance with GAAP or statutory
accounting practices, as applicable, and (in the case of the Financial
Statements prepared in accordance with GAAP) fairly presents the consolidated
financial condition and operations of Borrower and its Subsidiaries at such
dates and the consolidated results of their operations for the respective
periods then ended (except, in the case of such unaudited statements, for normal
year-end audit adjustments).
5.5. MATERIAL ADVERSE CHANGE. Since September 30, 2002, there has been no
change in the business, Property, prospects, performance, condition (financial
or otherwise) or operations of Borrower and its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect.
5.6. TAXES. Borrower and each of its Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by Borrower or any such Subsidiary, except such taxes, if
any, as are being contested in good faith and as to which adequate reserves have
been provided in accordance with Agreement Accounting Principles or SAP, as
applicable, and as to which no Lien exists. No tax liens have been filed and no
claims are being asserted with respect to any such taxes. The charges, accruals
and reserves on the books of Borrower and its Subsidiaries in respect of any
taxes or other governmental charges are in accordance with Agreement Accounting
Principles or SAP, as applicable.
5.7. LITIGATION AND CONTINGENT OBLIGATIONS. Except as disclosed on SCHEDULE
5.7, (a) there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting Borrower or any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect or which seeks to
prevent, enjoin or delay the making of any Loans or the consummation of any
other Closing Transaction, and (b) other than any liability incident to any
litigation, arbitration or proceeding that could not reasonably be expected to
have a Material Adverse Effect, none of Borrower or any of its Subsidiaries has
any material contingent obligations not provided for or disclosed in the
Financial Statements.
5.8. SUBSIDIARIES. SCHEDULE 5.8 contains an accurate list of all
Subsidiaries of Borrower as of the date of this Agreement, setting forth their
respective jurisdictions of organization and the percentage of their respective
capital stock or other ownership interests owned by Borrower or other
Subsidiaries. All of the issued and outstanding shares of capital stock or other
ownership interests of such Subsidiaries have been (to the extent such concepts
are relevant with respect to such ownership interests) duly authorized and
issued and are fully paid and non-assessable.
5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans do not in
the aggregate exceed $250,000. Neither Borrower nor any other member of the
Controlled Group maintains, or is obligated to contribute to, any Multiemployer
Plans. Each Plan complies in all material respects with all applicable
requirements of law and regulations, no Reportable Event has occurred with
respect to any Plan, neither Borrower nor any other member of the Controlled
Group has withdrawn from any Plan or initiated steps to do so, and no steps have
been taken to reorganize or terminate any Plan.
5.10. ACCURACY OF INFORMATION. No information, exhibit or report furnished
by Borrower or any of its Subsidiaries to the Agent or to any Lender in
connection with the negotiation of, or compliance with, the Loan Documents
contained any material misstatement of fact or omitted to state a material fact
or any fact necessary to make the statements contained therein not misleading.
5.11. FEDERAL RESERVE REGULATIONS. Neither Borrower nor any of its
Subsidiaries is engaged, directly or indirectly, principally, or as one of its
important activities, in the business of extending, or arranging for the
extension of, credit for the purpose of purchasing or carrying Margin Stock. No
part of the proceeds of any Loan will be used in a manner which would violate,
or result in a violation of, Regulation T, Regulation U or Regulation X. Neither
the making of any Loan hereunder nor the use of the proceeds thereof will
violate or be inconsistent with the provisions of Regulation T, Regulation U or
Regulation X. Following the application of the proceeds of the Loans, less than
25% of the value (as determined by any reasonable method) of the assets of
Borrower and its Subsidiaries which are subject to any limitation on sale,
pledge, or other restriction hereunder taken as a whole have been, and will
continue to be, represented by Margin Stock.
5.12. MATERIAL AGREEMENTS. Neither Borrower nor any Subsidiary is a party
to any agreement or instrument or subject to any charter or other corporate
restriction which could reasonably be expected to have a Material Adverse
Effect. Neither Borrower nor any Subsidiary is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in (a) any agreement to which it is a party, which default could
reasonably be expected to have a Material Adverse Effect or (b) any agreement or
instrument evidencing or governing any Material Indebtedness.
5.13. COMPLIANCE WITH LAWS. Borrower and its Subsidiaries have complied
with all applicable statutes, rules, regulations, orders and restrictions of any
domestic or foreign government or any instrumentality or agency thereof having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Property except where the failure to comply with any of the
foregoing would not reasonably be expected to have a Material Adverse Effect.
5.14. OWNERSHIP OF PROPERTIES. On the date of this Agreement, Borrower and
its Subsidiaries have good title, free of all Liens other than Permitted Liens,
to all of the Property and assets reflected in Borrower's most recent
consolidated financial statements provided to the Agent as owned by Borrower and
its Subsidiaries.
5.15. PLAN ASSETS; PROHIBITED TRANSACTIONS. Borrower is not an entity
deemed to hold "plan assets" within the meaning of 29 C.F.R. ss. 2510.3-101 of
an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject
to Title I of ERISA or any plan (within the meaning of Section 4975 of the
Code), and neither the execution of this Agreement nor the making of Loans
hereunder gives rise to a prohibited transaction within the meaning of Section
406 of ERISA or Section 4975 of the Code.
5.16. ENVIRONMENTAL MATTERS. In the ordinary course of its business, the
officers of Borrower consider the effect of Environmental Laws on the business
of Borrower and its Subsidiaries, in the course of which they identify and
evaluate potential risks and liabilities accruing to Borrower due to
Environmental Laws. On the basis of this consideration, Borrower has concluded
that Environmental Laws cannot reasonably be expected to have a Material Adverse
Effect. Neither Borrower nor any of its Subsidiaries has received any notice to
the effect that its operations are not in material compliance with any of the
requirements of applicable Environmental Laws or are the subject of any federal
or state investigation evaluating whether any remedial action is needed to
respond to a release of any toxic or hazardous waste or substance into the
environment, which non-compliance or remedial action could reasonably be
expected to have a Material Adverse Effect.
5.17. INVESTMENT COMPANY ACT. Neither Borrower nor any Subsidiary is an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
5.18. PUBLIC UTILITY HOLDING COMPANY ACT. Neither Borrower nor any
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
5.19. INSURANCE. Borrower and its Subsidiaries maintain insurance on their
Property with such companies, in such amounts and covering such risks as is, in
each case, consistent with sound business practice.
5.20. SOLVENCY. Immediately after the consummation of the Closing
Transactions and immediately following the making of each Loan, if any, made on
the date hereof and after giving effect to the application of the proceeds of
such Loans, (a) the fair value of the assets of Borrower and its Subsidiaries on
a consolidated basis, at a fair valuation, will exceed the debts and
liabilities, subordinated, contingent or otherwise, of Borrower and its
Subsidiaries on a consolidated basis; (b) the present fair saleable value of the
assets of Borrower and its Subsidiaries on a consolidated basis will be greater
than the amount that will be required to pay the probable liability of Borrower
and its Subsidiaries on a consolidated basis on their debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) Borrower and its Subsidiaries on a
consolidated basis will be able to pay their debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (d) Borrower and its Subsidiaries on a consolidated
basis will not have unreasonably small capital with which to conduct the
businesses in which they are engaged as such businesses are now conducted and
are proposed to be conducted after the date hereof.
5.21. INSURANCE LICENSES. SCHEDULE 5.21 hereto lists the jurisdiction of
domicile of each Material Insurance Subsidiary, the line or lines of insurance
in which each Material Insurance Subsidiary is engaged and the jurisdictions in
which each Material Insurance Subsidiary holds a License and is authorized to
transact insurance business, in each case as of the date of this Agreement.
Except as disclosed on SCHEDULE 5.21, no License, the loss of which could
reasonably be expected to have a Material Adverse Effect, is the subject of a
proceeding for suspension or revocation. Except as disclosed on SCHEDULE 5.21,
to Borrower 's knowledge, there is no sustainable basis for such suspension or
revocation, and no such suspension or revocation has been threatened by any
Governmental Authority. To Borrower's knowledge, no Material Insurance
Subsidiary has received written notice from any Governmental Authority that it
is deemed to be "commercially domiciled" for insurance regulatory purposes in
any jurisdiction other than that indicated on SCHEDULE 5.21.
5.22. REINSURANCE. SCHEDULE 5.22 lists all ceded or assumed reinsurance
agreements to which any Material Insurance Subsidiary (other than United
Wisconsin Insurance Company and United Heartland Life Insurance Company) is, as
of the date of this Agreement, a party, which are currently in force, and under
which there is liability by either party to the agreement (collectively, the
"EXISTING REINSURANCE AGREEMENTS"). If requested by any Lender, Borrower agrees
to provide such Lender with any such lists with respect to United Wisconsin
Insurance Company or United Heartland Life Insurance Company. Each of the
Existing Reinsurance Agreements is in full force and effect, is valid and
binding in all material respects in accordance with its terms, and, as of the
date hereof, no Material Insurance Subsidiary has, to Borrower 's knowledge,
received notice (other than provisional notices of cancellation received in the
ordinary course of business) that any other party to an in-force Existing
Reinsurance Agreement will cancel or not renew such agreement, which
cancellation or nonrenewal could reasonably be expected to have a Material
Adverse Effect. Borrower has no knowledge as of the date hereof that any amount
recoverable by any Material Insurance Subsidiary pursuant to any Existing
Reinsurance Agreement is not fully collectible in due course. To the knowledge
of Borrower, no Material Insurance Subsidiary is in default in any material
respect as to any Existing Reinsurance Agreement. Except as disclosed in
SCHEDULE 5.22, each Material Insurance Subsidiary is entitled to take full
credit in its statutory financial statements for ceded reinsurance under the
Existing Reinsurance Agreements pursuant to applicable insurance laws. Except as
disclosed in SCHEDULE 5.22, there is no claim under any Existing Reinsurance
Agreement in excess of $100,000 which is disputed by any other party to such
agreement.
5.23. RESERVES. Except as set forth on SCHEDULE 5.23, each reserve and
other material liability amount in respect of the insurance business, including,
without limitation, material reserve and other material liability amounts in
respect of insurance policies of each Material Insurance Subsidiary, established
or reflected in the SAP Financial Statements for the year ended December 31,
2001 of such Material Insurance Subsidiary, was determined in accordance with
generally accepted actuarial standards consistently applied, was fairly stated
in accordance with sound actuarial principles and was in compliance with the
requirements of the insurance laws, rules and regulations of its state of
domicile as of the date thereof. Each Material Insurance Subsidiary owns assets
that qualify as admitted assets under applicable law in an amount at least equal
to the sum of all such reserves and liability amounts and its minimum Statutory
Capital and Surplus as required by the insurance laws, rules and regulations of
its state of domicile.
5.24. UWLIC CAPITAL AND SURPLUS. As of the date of this Agreement, UWLIC
has a Statutory Capital and Surplus of at least $125,000,000.
5.25. DEFAULTS. No Default or Unmatured Default has occurred and is
continuing.
5.26. CERTAIN FEES. No broker's or finder's fee or commission was, is or
will be payable by Borrower or any Subsidiary with respect to any of the
transactions contemplated by this Agreement or any other Closing Transaction.
Borrower hereby agrees to indemnify the Agent and the Lenders against and agrees
that it will hold each of them harmless from any claim, demand or liability for
broker's or finder's fees or commissions alleged to have been incurred by
Borrower or any of its Subsidiaries in connection with any of the transactions
contemplated by this Agreement or any other Closing Transaction and any expenses
(including, without limitation, attorneys' fees and time charges of attorneys
for the Agent or any Lender, which attorneys may be employees of the Agent or
any Lender) arising in connection with any such claim, demand or liability. No
other similar fee or commissions will be payable by Borrower or any Subsidiary
for any other services rendered to Borrower or any Subsidiary ancillary to any
of the transactions contemplated by this Agreement or any other Closing
Transaction.
5.27. INDEBTEDNESS. Attached hereto as SCHEDULE 5.27 is a complete and
correct list of all Indebtedness of Borrower and its Subsidiaries outstanding on
the date of this Agreement (other than Indebtedness in a principal amount not
exceeding $50,000 for a single item of Indebtedness and $100,000 in the
aggregate for all such Indebtedness listed), showing the aggregate principal
amount which was outstanding on such date after giving effect to the Closing
Transactions.
5.28. EMPLOYEE CONTROVERSIES. There are no strikes, work stoppages or
controversies pending or threatened between Borrower or any of its Subsidiaries
and any of its employees, other than employee grievances arising in the ordinary
course of business, which, in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
5.29. DIVIDENDS. No Insurance Subsidiary is subject to any regulatory
prohibition regarding the declaration or payment of dividends that is not
generally applicable to all insurance companies which are domiciled in the same
jurisdiction and are engaged in the same line of business as such Insurance
Subsidiary.
5.30. SECURITY. Each Pledge Agreement is effective to create and give the
Agent, for the benefit of the Lenders, as security for the repayment of the
obligations secured thereby, a legal, valid and perfected first priority Lien
upon and security interest in the capital stock pledged thereunder, which is
enforceable in accordance with the terms of such Pledge Agreement.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. FINANCIAL REPORTING. Borrower will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with GAAP, consistently applied, and furnish to the Lenders:
(a) As soon as practicable and in any event within 90 days after the
close of each of its Fiscal Years, an unqualified (except for qualifications
relating to changes in accounting principles or practices reflecting changes
in GAAP and required or approved by Borrower's independent certified public
accountants) audit report certified by independent certified public accountants
acceptable to the Lenders, prepared in accordance with Agreement Accounting
Principles on a consolidated and consolidating basis (consolidating statements
need not be certified by such accountants) for itself and its Subsidiaries,
including balance sheets as of the end of such period and related statements
of income, retained earnings and cash flows, accompanied by (i) any management
letter prepared by said accountants, (ii) a certificate of said accountants
that, in the course of their examination necessary for their certification of
the foregoing, they have obtained no knowledge of any Default or Unmatured
Default, or if, in the opinion of such accountants, any Default or Unmatured
Default shall exist, stating the nature and status thereof, and (iii) a letter
from said accountants addressed to the Lenders acknowledging that the Lenders
are extending credit in primary reliance on such financial statements and
authorizing such reliance.
(b) As soon as practicable and in any event within 60 days after the
close of each Fiscal Quarter, for itself and its Subsidiaries, consolidated and
consolidating unaudited balance sheets as at the close of each such period and
consolidated and consolidating statements of income, retained earnings and cash
flows for the period from the beginning of such fiscal year to the end of such
quarter, all prepared in accordance with Agreement Accounting Principles and
certified by its chief financial officer or controller.
(c) (i) Upon the earlier of (A) fifteen days after the regulatory
filing date or (B) March 15 of each Fiscal Year of each Material Insurance
Subsidiary, copies of the unaudited Annual Statement of each Material Insurance
Subsidiary, certified by the chief financial officer or controller of such
Material Insurance Subsidiary, all such statements to be prepared in accordance
with SAP consistently applied throughout the periods reflected therein and (ii)
no later than each June 15, copies of annual financial statements each Material
Insurance Subsidiary, prepared in accordance with SAP, audited and certified by
independent certified public accountants of recognized national standing.
(d) Upon the earlier of (i) ten (10) days after the regulatory filing
date or (ii) 60 days after the close of each of the first three Fiscal Quarters
of each Fiscal Year of each Material Insurance Subsidiary, copies of the
Quarterly Statement of each Material Insurance Subsidiary, certified by the
chief financial officer or controller of such Material Insurance Subsidiary, all
such statements to be prepared in accordance with SAP consistently applied
through the period reflected herein.
(e) Promptly and in any event within ten days after (i) learning
thereof, notification of any changes after the date hereof in the rating given
by A.M. Best & Co. in respect of any Insurance Subsidiary and (ii) receipt
thereof, copies of any ratings analysis by A.M. Best & Co. relating to any
Material Insurance Subsidiary.
(e) As soon as available and in any event within 90 days after the
close of each Fiscal Year, a "Statement of Actuarial Opinion" and "Management
Discussion and Analysis" including review of year-end loss reserves for each
Material Insurance Subsidiary (prepared in accordance with SAP) for such Fiscal
Year by an actuary reasonably acceptable to Agent (who may be an employee of
American Medical Security, Inc.) as filed with the applicable regulatory
insurance authority in compliance with the requirements thereof (or a report
containing equivalent information for each Material Insurance Subsidiary if such
Material Insurance Subsidiary is not so required to file the foregoing with
the applicable regulatory insurance authority).
(g) Copies of any other actuarial certificates prepared with respect
to each Material Insurance Subsidiary, promptly after the receipt thereof.
(h) As soon as available, but in any event within 90 days after the
beginning of each Fiscal Year of Borrower, a copy of the plan and forecast of
Borrower and its Subsidiaries for such Fiscal Year.
(i) Together with the financial statements required by clauses (a) and
(b) above, a compliance certificate in substantially the form of EXHIBIT A
signed by its chief financial officer or controller showing the calculations
necessary to determine compliance with this Agreement and stating that no
Default or Unmatured Default exists, or if any Default or Unmatured Default
exists, stating the nature and status thereof.
(j) Within 270 days after the close of each Fiscal Year, a statement
of the Unfunded Liabilities of each Single Employer Plan, if any, certified as
correct by an actuary enrolled under ERISA.
(k) As soon as possible and in any event within 10 days after Borrower
knows that any Reportable Event has occurred with respect to any Plan, a
statement, signed by the chief financial officer or controller of Borrower,
describing said Reportable Event and the action proposed to be taken with
respect thereto, and as soon as possible and in any event within ten (10) days
after learning thereof, notification of any Lien imposed by the PBGC or the IRS
on the assets of any member of the Controlled Group in respect of any Plan
maintained by any such member (or any other employee pension benefit plan as to
which any such member may be liable) which, together with all such Liens,
relates to liabilities in excess of ten percent of the net worth (determined
according to GAAP and without reduction for any reserve for such liabilities) of
Borrower and its Subsidiaries.
(l) As soon as possible and in any event within 10 days after receipt
by Borrower or any of its Subsidiaries, a copy of (i) any notice or claim to
the effect that Borrower or any of its Subsidiaries is or may be liable to any
Person as a result of the release by Borrower, any of its Subsidiaries
or any other Person of any toxic or hazardous waste or substance into the
environment, and (ii) any notice alleging any violation of any federal, state
or local environmental, health or safety law or regulation by Borrower or any
of its Subsidiaries which could, in the case of either clause (i) or (ii),
reasonably be expected to have a Material Adverse Effect.
(m) Promptly upon the furnishing thereof to the shareholders of
Borrower copies of all financial statements, reports and proxy statements so
furnished.
(n) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports which
Borrower or any of its Subsidiaries files with the Securities and Exchange
Commission, the National Association of Securities Dealers, any securities
exchange, the NAIC or any insurance commission or department or analogous
Governmental Authority (including without limitation, any filing made by
Borrower or any Subsidiary pursuant to any insurance holding company act or
related rules or regulations), but excluding routine or non-material filings
with the NAIC, any insurance commissioner or department or analogous
Governmental Authority (such routine or non-material filings to include, but not
be limited to, (i) new or renewal applications for licensure as a third party
administrator, managing general agent, agent, agency, adjuster, multiple
employer trust, multiple employer welfare arrangement, managed care
organization, utilization review agent or any related filing, (ii) Form B or
Form C filings, (iii) Form D filings made in the ordinary course of business,
(iv) applications for a Certificate of Authority to act as a foreign life,
health or accident insurer, (v) Secretary of State or County Clerk filings,
or (vi) State Department of Commerce or Department of Financial Institution
filings including but not limited to UCC filings or renewals.
(o) Promptly and in any event within ten (10) days after learning
thereof, notification of (i) any tax assessment, demand, notice of proposed
deficiency or notice of deficiency received by Borrower or any other
Consolidated Person or (ii) the filing of any tax Lien or commencement of any
judicial proceeding by or against any such Consolidated Person, if any such
assessment, demand, notice, Lien or judicial proceeding (or all such
assessments, demands, notices, Liens and judicial proceedings, in the
aggregate) relates to tax liabilities in excess of ten percent (10%) of the net
worth (determined according to generally accepted accounting standards and
without reduction for any reserve for such liabilities) of Borrower and its
Subsidiaries taken as a whole.
(p) Such other information (including, without limitation, the annual
Best's Advance Report Service report prepared with respect to each Insurance
Subsidiary rated by A.M. Best & Co.) as the Agent or any Lender may from time to
time reasonably request.
6.2. USE OF PROCEEDS. Borrower will, and will cause each Subsidiary to, use
the proceeds of the Loans to (a) to repay in full the outstanding Indebtedness
of Borrower and its Subsidiaries, and each of them under that certain Credit
Agreement, dated as of March 24, 2000 between Borrower, the Lenders name therein
and Agent, other than the Indebtedness reflected in Section 5.8 (or Indebtedness
in a principal amount not exceeding $50,000 for a single item of Indebtedness
and $100,000 in the aggregate for all such Indebtedness) and approved by Agent,
and (b) meet working capital and general corporate needs of Borrower and its
Subsidiaries, including UWLIC. Borrower will not permit any Subsidiary to use
any of the proceeds of the Loans to purchase or carry any "margin stock" (as
defined in Regulation U), nor will Borrower use any of the proceeds of the
Loans, or permit any Subsidiary to use any such proceeds to finance the Purchase
of any Person which has not been approved and recommended by the Board of
Directors (or functional equivalent thereof) of such Person. Following the
application of the proceeds of the Loans with respect to any repurchase by
Borrower of its outstanding stock as permitted pursuant to Section 6.10 hereof,
neither Borrower nor any Subsidiary will permit more than 25% of the value (as
determined by any reasonable method) of the assets of Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge or other
restriction hereunder taken as a whole to have been, and to continue to be,
represented by margin stock.
6.3. REQUIRED NOTICES. Borrower will, and will cause each Subsidiary to,
give prompt notice in writing to the Lenders of (a) the occurrence of any
Default or Unmatured Default, (b) the occurrence of any other development,
financial or otherwise relating specifically to Borrower or any of its
Subsidiaries (and not of a general economic or political nature) which could
reasonably be expected to have a Material Adverse Effect, (c) the receipt of any
notice from any Governmental Authority of the expiration without renewal,
revocation or suspension of, or the institution of any proceedings to revoke or
suspend, any License now or hereafter held by any Insurance Subsidiary which is
required to conduct insurance business in compliance with all applicable laws
and regulations and the expiration, revocation or suspension of which could
reasonably be expected to have a Material Adverse Effect, (d) the receipt of any
notice from any Governmental Authority of the institution of any disciplinary
proceedings against or in respect of any Insurance Subsidiary, or the issuance
of any order, the taking of any action or any request for an extraordinary audit
for cause by any Governmental Authority which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect, (e) any judicial or
administrative order limiting or controlling the insurance business of any
Insurance Subsidiary (and not the insurance industry generally) which has been
issued or adopted and which has had, or could reasonably be expected to have, a
Material Adverse Effect, or (f) the receipt of any notice of the commencement of
any litigation which could reasonably be expected to create a Material Adverse
Effect.
6.4. CONDUCT OF BUSINESS. Borrower will, and will cause each Subsidiary to,
(a) carry on and conduct its business only in substantially the same manner and
in substantially the same fields of enterprise as it is presently conducted, (b)
with respect to each Insurance Subsidiary, only engage in the life, accident and
health insurance and reinsurance business, (c) do all things necessary to remain
duly incorporated, validly existing and in good standing in its jurisdiction of
incorporation and its jurisdiction of domicile and maintain all requisite
authority to conduct its business in each other jurisdiction in which its
business is conducted unless failure to remain duly incorporated, validly
existing and in good standing could not reasonably be expected to have a
Material Adverse Effect, and (d) do all things necessary to renew, extend and
continue in effect all Licenses which may at any time and from time to time be
necessary for any Insurance Subsidiary to operate its insurance business in
compliance with all applicable laws and regulations; PROVIDED, that any
Insurance Subsidiary may withdraw from or otherwise discontinue one or more
operations in one or more states (other than its state of domicile) as an
admitted insurer if such withdrawal or discontinuance is determined by such
Insurance Subsidiary's Board of Directors to be in the best interest of such
Insurance Subsidiary and could not reasonably be expected to have a Material
Adverse Effect. No Material Insurance Subsidiary shall change its state of
domicile or incorporation without the prior written consent of the Required
Lenders, which shall not unreasonably be withheld or delayed. Each Wholly-Owned
Subsidiary in existence as of the date of this Agreement shall continue to be a
Wholly-Owned Subsidiary; PROVIDED, that all of the capital stock of any
Subsidiary (other than UWLIC) may be sold in compliance with SECTION 6.13
hereof.
6.5. TAXES. Borrower will, and will cause each Subsidiary to, timely file
complete and correct United States federal and applicable foreign, state and
local tax returns required by law and pay when due all taxes, assessments and
governmental charges and levies upon it or its income, profits or Property,
except those which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside in accordance
with Agreement Accounting Principles.
6.6. INSURANCE. Borrower will, and will cause each Subsidiary to, maintain
with financially sound and reputable insurance companies insurance on their
Property in such amounts and covering such risks as is consistent with sound
business practice, and Borrower will furnish to the Agent or any Lender upon
request full information as to the insurance carried.
6.7. COMPLIANCE WITH LAWS. Borrower will, and will cause each Subsidiary
to, comply with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject including, without
limitation, all Environmental Laws, the failure to comply with which could
reasonably be expected to have a Material Adverse Effect.
6.8. MAINTENANCE OF PROPERTIES. Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times.
6.9. INSPECTION. Borrower will, and will cause each Subsidiary to, permit
the Agent and the Lenders, by their respective representatives and agents, to
inspect any of the Property, books and financial records of Borrower and its
Subsidiaries, to examine and make copies of the books of accounts and other
financial records of Borrower and its Subsidiaries, and to discuss the affairs,
finances and accounts of Borrower and its Subsidiaries with, and to be advised
as to the same by, their respective officers at such reasonable times and
intervals as the Agent or any Lender may designate; PROVIDED, that so long as no
Default or Unmatured Default has occurred and is continuing, the Agent and the
Lenders shall provide advance notice of any inspection or examination. Borrower
will keep or cause to be kept, and cause each Subsidiary to keep or cause to be
kept, appropriate records and books of account in which complete entries are to
be made reflecting its and their business and financial transactions, such
entries to be made in accordance with Agreement Accounting Principles or SAP, as
applicable, consistently applied.
6.10. DIVIDENDS. Borrower will not, nor will it permit any Subsidiary to,
declare or pay any dividends or make any distributions on its capital stock
(other than dividends payable in its own capital stock) or redeem, repurchase or
otherwise acquire or retire any of its capital stock at any time outstanding,
except, so long as no Default or Unmatured Default has occurred and is
continuing,:
(i) any Subsidiary may declare and pay dividends to a
Wholly-Owned Subsidiary or to Borrower;
(ii) Borrower may repurchase its outstanding stock from ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ ("▇▇▇▇▇▇") pursuant to the terms of that certain Restricted
Stock Agreement, dated as of July 9, 2001 between Borrower and ▇▇▇▇▇▇;
and
(iii) Borrower may repurchase its outstanding stock during the
periods referenced below, subject to the following limitations and
conditions:
(A) in an aggregate amount not to exceed $15,000,000 from
the Initial Closing Date through and including December 30, 2003;
(B) in an aggregate amount not to exceed $10,000,000 from
December 30, 2003 through and including December 30, 2004; and
(C) in an aggregate amount not to exceed $5,000,000 from
December 30, 2004 through and including the Facility Termination
Date.
Notwithstanding the foregoing, (1) in the event that Borrower does not
utilize the maximum repurchase limitation set forth in 6.10(iii)(A) above,
Borrower may carry over from such period an aggregate unutilized amount of not
more than $5,000,000 to the period referenced in 6.10(iii)(B) above for an
aggregate repurchase amount not to exceed $15,000,000 for such period, and (2)
in the event that Borrower does not utilize the maximum limitation set forth in
6.10(iii)(B) above, Borrower may carry over from such period an aggregate
unutilized amount of not more than $10,000,000 to the period referenced in
6.10(iii)(C) above for an aggregate repurchase amount not to exceed $15,000,000
for such period; PROVIDED, HOWEVER, that any repurchases permitted under this
SECTION 6.10(III) are contingent upon evidence satisfactory to Agent that (x)
Borrower or UWLIC has obtained all necessary regulatory and other required
approval for such repurchase, (y) after taking into effect any repurchase,
Borrower shall maintain compliance with all financial covenants set forth in
SECTION 6.19 hereof, and (z) no repurchase would cause the occurrence of a
Default or Unmatured Default.
6.11. INDEBTEDNESS. Borrower will not, nor will it permit any Subsidiary
to, create, incur or suffer to exist any Indebtedness, except:
(a) the Loans;
(b) Indebtedness existing on the Initial Closing Date and described in
SCHEDULE 5.28 and refinancings thereof or amendments or modifications thereto
which do not have the effect of increasing the principal amount thereof or
changing the amortization thereof (other than to extend the same) and which
are otherwise on terms and conditions no less favorable to Borrower, any
Subsidiary, the Agent or any Lender than the terms of the Indebtedness being
refinanced, amended or modified;
(c) Indebtedness arising under Rate Hedging Agreements related to the
Loans;
(d) Contingent Obligations permitted pursuant to SECTION 6.18(A), (B),
(C) or (D);
(e) Indebtedness owing by Borrower to any Wholly-Owned Subsidiary or
by any Wholly-Owned Subsidiary to Borrower or any other Wholly-Owned Subsidiary,
to the extent such Indebtedness constitutes an Investment permitted under
SECTION 6.14;
(f) additional Indebtedness including Capitalized Leases, and
additional Indebtedness secured by Liens permitted by SECTIONS 6.15(J) and (K)
and extensions, renewals and refinancings thereof; with an aggregate principal
outstanding not in excess of $7,000,000, of which not more than $2,500,000 may
consist of obligations for borrowed money;
(g) additional Indebtedness including Capitalized Leases for the
anticipated completion of Borrower's system financing as more particularly
described on SCHEDULE 6.11; and
(h) Subordinated Indebtedness.
6.12. MERGER. Borrower will not, nor will it permit any Subsidiary to,
merge or consolidate with or into any other Person, except that (a) a Subsidiary
may merge into Holdings or a Wholly-Owned Subsidiary, (b) a Subsidiary may merge
with another Person if the surviving entity is a Wholly-Owned Subsidiary of
Borrower, (c) Holdings may merge into Borrower and (d) Borrower may merge or
consolidate with another Person so long as (i) the surviving or successor
corporation is organized under the laws of any state of the United States and
assumes the Obligations by written instrument acceptable in form and substance
to the Agent and each Lender, (ii) no Default or Unmatured Default has occurred
and is continuing or would occur after giving effect thereto (determined with
respect to the covenants set forth in SECTION 6.19 on a pro forma basis as of
the last day of the most recent Fiscal Quarter for which financial statements
are available) and Borrower delivers pro forma financial statements, reasonably
satisfactory to Agent and Lenders, for the next four Fiscal Quarters
demonstrating such compliance, and (iii) unless Borrower is the surviving
corporation, each Lender has given its prior written consent to such
transaction, which consent shall not unreasonably be withheld.
6.13. SALE OF ASSETS. Borrower will not, nor will it permit any Subsidiary
to, lease, sell or otherwise dispose of its Property to any other Person,
except:
(a) sales of Investments in the ordinary course of business by
Insurance Subsidiaries;
(b) leases, sales or other dispositions by Borrower to any
Wholly-Owned Subsidiary or by any Subsidiary to Borrower or any Wholly-Owned
Subsidiary to the extent permitted under SECTION 6.14;
(c) sales and other dispositions of obsolete equipment in the ordinary
course of business to the extent the proceeds thereof are used to replace such
disposed equipment; and
(d) leases, sales or other dispositions of its Property that, together
with all other Property of Borrower and its Subsidiaries previously leased, sold
or disposed of (other than Investments sold in the ordinary course of business
by Insurance Subsidiaries) as permitted by this SECTION 6.13(D) in any
consecutive 12 month period, do not constitute a Substantial Portion of the
Property of Borrower and its Subsidiaries.
6.14. INVESTMENTS AND ACQUISITIONS. (a) Borrower will not, nor will it
permit any Subsidiary which is not an Insurance Subsidiary to, make or suffer to
exist any Investments (including, without limitation, loans and advances to, and
other Investments in, Subsidiaries), or commitments therefor, or to create any
Subsidiary or to become or remain a partner in any partnership or joint venture,
or to make any Acquisition of any Person, except:
(i) Cash and Cash Equivalent Investments;
(ii) Investments in existence on the Initial Closing Date (including
Investments in Subsidiaries) and, to the extent they consist of loans,
refinancings thereof or amendments or modifications thereof which do not
have the effect of increasing the principal amount thereof or changing the
amortization thereof (other than to extend the same) and which are
otherwise on terms and conditions no less favorable to Borrower, any
Subsidiary, the Agent or any Lender than the terms of the Investment being
refinanced, amended or modified;
(iii) Other Investments in Subsidiaries in existence as of the Initial
Closing Date, so long as no Default or Unmatured Default has occurred and
is continuing either before or after giving effect thereto (determined, in
respect of the covenants set forth in SECTION 6.19, on a pro forma basis as
of the last day of the most recent Fiscal Quarter for which financial
statements are available);
(iv) Other Investments in Subsidiaries which consist of intercompany
loans, accounts or balances made in the ordinary course of business, so
long as no Default or Unmatured Default has occurred and is continuing
either before or after giving effect thereto (determined, in respect of the
covenants set forth in SECTION 6.19, on a pro forma basis as of the last
day of the most recent Fiscal Quarter for which financial statements are
available);
(v) Acquisitions (other than hostile takeovers) of businesses or
entities (1) engaged in the life, accident and health insurance business
that maintain a rating by A.M. Best & Co. of B++ or better (and Investments
in Subsidiaries formed to acquire such businesses or acquired after the
date of this Agreement) unless Borrower obtains Agent's prior written
consent, which consent shall not be unreasonably withheld, that such lower
rating is acceptable, and/or (2) engaged in businesses which are directly
related to the life, accident and health insurance business such as
provider networks, third party administrators, utilization review
organizations, managed care organizations or similar entities (and
Investments in Subsidiaries formed to acquire such businesses or acquired
after the date of this Agreement) made (A) for consideration consisting of
Borrower's capital stock not to exceed $35,000,000 in the aggregate after
the Initial Closing Date (measured by reference to the market value of such
stock as of the consummation of such Acquisition) or (B) for other types of
consideration not to exceed (x) $15,000,000 in the aggregate after the
Initial Closing Date (including the amount of any consideration other than
Borrower's capital stock paid in connection with Acquisitions made pursuant
to clause (A)), less (y) the aggregate consideration paid in respect of any
Acquisitions made pursuant to SECTION 6.14(B)(VI); PROVIDED, that if any
such acquisition is an acquisition of stock, the outstanding stock thereof
shall be pledged to Agent on behalf of the Lenders upon Agent's request,
subject to obtaining regulatory approval for any such pledge that Borrower
shall use its commercially reasonable efforts to obtain;
(vi) Up to $5,000,000 in the aggregate at any time outstanding of
other Investments which do not constitute Acquisitions; and
(vii) Up to $15,000,000 in the aggregate at any time outstanding of
Commission Advances to independently contracted agents or agencies;
PROVIDED, that no single Commission Advance to any one agent or agency
shall exceed $3,000,000 (other than any Commission Advance to ▇▇▇▇ ▇▇▇▇
and/or Universal Marketing of America which collectively shall not exceed
$5,000,000 at any time), and; PROVIDED, further, that upon any Lender's
request, Borrower shall provide such Lender with back-up information
regarding any Commission Advances as such Lender shall request. For
purposes of this Section 6.14(a)(vii), "Commission Advances" or "Commission
Advance" shall mean commissions advanced by Borrower pursuant to one or
more written commission advance agreements with its sales force of agents
and general agents on insurance products where such commissions are
advanced for a period of time and are to be repaid to Borrower through
subsequent premiums collected.
(b) Borrower will not permit any Insurance Subsidiary to make or
suffer to exist any Investments (including, without limitation, loans and
advances to and other Investments in, Subsidiaries), or commitments therefor,
or to create any Subsidiary or to become or remain a partner in any partnership
or joint venture, or to make any Acquisition of any Person, except:
(i) Cash and Cash Equivalent Investments;
(ii) Investments in debt securities rated BBB- or better by S&P,
Baa-3 or better by ▇▇▇▇▇'▇ or NAIC-2 or better by the NAIC; PROVIDED,
that any such Investment which, at any time after which it is made,
ceases to meet such rating requirements (A) shall cease to be
permitted hereby if then permitted by SECTION 6.14(B)(III) and (B) if
not then permitted by SECTION 6.14(B)(III) shall remain permitted
hereby until the earlier of the time it is permitted under SECTION
6.14(B)(III) and the date which is 30 days after the date on which
such rating requirement is no longer met;
(iii) Other Investments of a quality acceptable to the insurance
commissioner in the respective domiciliary state of such Insurance
Subsidiary not otherwise permitted under this SECTION 6.14(B);
PROVIDED, that such Investments of (A) each such Insurance Subsidiary
that is a Material Insurance Subsidiary do not exceed, in the
aggregate at any one time outstanding, 20% of the Statutory Capital
and Surplus of such Material Insurance Subsidiary or (B) all other
Insurance Subsidiaries as a group, if such other Insurance
Subsidiaries have an aggregate Statutory Capital and Surplus in excess
of $5,000,000, do not exceed 20% of such aggregate Statutory Capital
and Surplus;
(iv) Existing Investments in Subsidiaries and other Investments
in existence on the Initial Closing Date and, to the extent they
consist of loans, refinancings thereof or amendments or modifications
thereto which do not have the effect of increasing the principal
amount thereof or changing the amortization thereof (other than to
extend the same) and which are otherwise or terms and conditions no
less favorable to Borrower, any Subsidiary, the Agent or any Lender
than the terms of the Investment being refinanced, amended or
modified;
(v) Acquisitions of blocks of life, accident or health insurance
business through assumptive reinsurance, coinsurance or indemnity
reinsurance, so long as the only consideration paid in connection
therewith consists of (A) premium sharing and/or ceding commissions
and (B) payments of up to $5,000,000 in the aggregate after the date
hereof; and
(vi) Acquisitions (other than hostile takeovers) of businesses or
entities (1) engaged in the life, accident and health insurance
business that maintain a rating by A.M. Best & Co. of B++ or better
(and Investments in Subsidiaries formed to acquire such businesses or
acquired after the date of this Agreement) unless Borrower obtains
Agent's prior written consent, which consent shall not be unreasonably
withheld, that such lower rating is acceptable, and/or (2) engaged in
businesses which are directly related to the life, accident and health
insurance business such as provider networks, third party
administrators, utilization review organizations, managed care
organizations or similar entities (and Investments in Subsidiaries
formed to acquire such businesses or acquired after the date of this
Agreement) made after the Initial Closing Date for an aggregate
consideration not to exceed (A) $15,000,000 (including the amount of
any consideration paid in connection with reinsurance transactions
permitted pursuant to Section 6.14(b)(v)), less (B) the aggregate
consideration paid in respect of any Acquisitions made pursuant to
SECTION 6.14(A)(V)(B); PROVIDED, that if any such acquisition is an
acquisition of stock, the outstanding stock thereof shall be pledged
to Agent on behalf of the Lenders upon Agent's request, subject to
obtaining regulatory approval for any such pledge that Borrower shall
use its commercially reasonable efforts to obtain.
6.15. LIENS. Borrower will not, nor will it permit any Subsidiary to,
create, incur, or suffer to exist any lien or encumbrance in, of or on the
Property of Borrower or any of its Subsidiaries, except the following Permitted
Liens:
(a) Liens for taxes, assessments or governmental charges or levies on
its Property if the same shall not at the time be delinquent or thereafter can
be paid without penalty, or are being contested in good faith and by appropriate
proceedings and for which adequate reserves in accordance with Agreement
Accounting Principles or SAP, as applicable, shall have been set aside on its
books;
(b) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary course of
business which secure payment of obligations not more than 60 days past due or
which are being contested in good faith by appropriate proceedings and for which
adequate reserves shall have been set aside on its books;
(c) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other social
security or retirement benefits, or similar legislation;
(d) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which do not in
any material way affect the marketability of the same or interfere with the use
thereof in the business of Borrower or its Subsidiaries;
(e) Deposits made by any Insurance Subsidiary with the insurance
regulatory authority in its jurisdiction of domicile or other statutory Liens or
Liens or claims imposed or required by applicable insurance law or regulation
against the assets of any Insurance Subsidiary, in each case in favor of all
policy holders of such Insurance Subsidiary and in the ordinary course of
such Insurance Subsidiary's business;
(f) Liens existing on the Initial Closing Date and described in
SCHEDULE 6.15;
(g) Liens securing the Indebtedness described in SECTION 6.11(F), so
long as such Liens extend only to the equipment leased thereunder;
(h) other Liens securing Indebtedness or obligations in an aggregate
principal amount not in excess of $2,500,000 at any one time outstanding;
(i) Liens created by the Loan Documents in favor of Agent for the
benefit of the Lenders;
(j) Liens existing on Property at the time of the acquisition thereof
by Borrower or any Subsidiary (and not created in contemplation of such
acquisition); and
(k) Liens that constitute purchase money security interests on any
Property securing debt incurred for the purpose of financing such Property,
PROVIDED, that any such Lien attaches solely to the Property so acquired.
6.16. AFFILIATES. Borrower will not, nor will it permit any Subsidiary to,
enter into any transaction (including, without limitation, the purchase or sale
of any Property or service) with, or make any payment or transfer to, any
Affiliate except in the ordinary course of business and pursuant to the
reasonable requirements of Borrower's or such Subsidiary's business and upon
fair and reasonable terms no less favorable to Borrower or such Subsidiary than
Borrower or such Subsidiary would obtain in a comparable arms-length
transaction.
6.17. OTHER INDEBTEDNESS. Borrower will not, nor will it permit any
Subsidiary to, directly or indirectly voluntarily prepay, defease or in
substance defease, purchase, redeem, retire or otherwise acquire, any
Indebtedness prior to the date due (other than the Loans) while a Default or
Unmatured Default has occurred and is continuing or would occur after giving
effect thereto (determined, in respect of the covenants set forth in SECTION
6.19, on a pro forma basis as of the last day of the most recent Fiscal Quarter
for which financial statements are available).
6.18. CONTINGENT OBLIGATIONS. Borrower will not, nor will it permit any
Subsidiary to, make or suffer to exist any Contingent Obligation (including,
without limitation, any Contingent Obligation with respect to the obligations of
a Subsidiary), except (a) the Contingent Obligations described on SCHEDULE 5.7,
(b) Contingent Obligations in respect of insurance contracts or policies issued
in the ordinary course of business, (c) Contingent Obligations in respect of the
endorsement of instruments for deposit or collection in the ordinary course of
business, (d) Contingent Obligations in respect of the Indebtedness described in
SECTION 6.11(F), and (e) Contingent Obligations permitted under SECTION 6.11(G).
6.19. FINANCIAL COVENANTS.
6.19.1. FIXED CHARGE COVERAGE RATIO. Borrower will not permit its Fixed
Charge Coverage Ratio, determined as of the end of each Fiscal Quarter for the
period of four Fiscal Quarters ending on such date, to be less than 4:00 to
1.00; PROVIDED, HOWEVER, there shall be excluded from the calculation of EBITDA
within the Fixed Charge Coverage Ratio the balloon payment due in the year 2004
on the loan made by M&I ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Bank that is secured by the real
property of Borrower and it Subsidiaries located at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
6.19.2. LEVERAGE RATIO. Borrower will not permit its Leverage Ratio,
determined as of the end of each of Fiscal Quarter, to be greater than 0.30 to
1.0.
6.19.3. CONSOLIDATED NET WORTH. Borrower will at all times maintain a
Consolidated Net Worth of not less than the sum of (a) $175,000,000, PLUS (b)
50% of the positive Consolidated Net Income earned by Borrower in each Fiscal
Year commencing on December 31, 2003 and on or prior to the date of
determination (excluding changes in unrealized gain/loss), PLUS (c) 25% of the
Net Available Proceeds received by Borrower or any Subsidiary from the issuance
of equity securities after the Initial Closing Date.
6.19.4. STATUTORY CAPITAL AND SURPLUS. Borrower will at all times cause
UWLIC to maintain a Statutory Capital and Surplus of not less than the sum of
(a) $125,000,000, plus (b) 50% of the positive Statutory Net Income earned by
UWLIC in each Fiscal Year commencing on December 31, 2003 and on or prior to the
date of determination (excluding changes in unrealized gain/loss).
6.19.6. RISK-BASED CAPITAL. At all times after the date hereof, Borrower
will cause each Material Insurance Subsidiary to maintain a ratio of (a) Total
Adjusted Capital (as defined in the Risk-Based Capital Act or in the rules and
procedures prescribed from time to time by the NAIC with respect thereto) to (b)
the Company Action Level RBC (as defined in the Risk-Based Capital Act or in the
rules and procedures prescribed from time to time by the NAIC with respect
thereto) of at least 175%. Borrower shall also provide the Lenders with copies
of the IRIS ratio calculations for each Material Insurance Subsidiary by March
31 of each year.
6.21. REINSURANCE. Borrower will not permit any Insurance Subsidiary to (a)
enter into bulk reinsurance arrangements, including without limitation any bulk
financial reinsurance arrangements, or (b) enter into any other (or renew,
extend or materially modify any existing) reinsurance arrangements except in the
ordinary course of business (i) with reinsurers rated at least "A-" (at the time
such reinsurance arrangements are entered into) by A.M. Best & Co. or its
equivalent by another reputable rating agency or reinsurers whose obligations to
the Insurance Subsidiaries are secured by letters of credit or other collateral
reasonably acceptable to the Required Lenders or (ii) with other reinsurers so
long as the aggregate corresponding credits to reserves (page 3, lines 1, 2, 3
and 4 of the Annual Statement) of all Insurance Subsidiaries in respect of
reinsurance arrangements with all such other reinsurers does not exceed 3% of
the aggregate of such reserves of all Insurance Subsidiaries; PROVIDED, that
notwithstanding the foregoing, any Insurance Subsidiary may enter into any
reinsurance arrangement in order to effect the Acquisition of a block of
insurance business which is permitted under SECTION 6.14(B)(V).
6.22. TAX CONSOLIDATION. Neither Borrower nor any Subsidiary will (a) file
or consent to the filing of any consolidated, combined or unitary income tax
return with any Person other than Borrower and its Subsidiaries or (b) enter
into any tax sharing agreement or similar arrangement other than a tax sharing
agreement among Borrower and its Subsidiaries.
6.23. ERISA COMPLIANCE. With respect to any Plan, neither Borrower nor any
Subsidiary shall or shall permit any other member of the Controlled Group to:
(a) engage in any "prohibited transaction" (as such term is defined in
Section 406 of ERISA or Section 4975 of the Code) for which a civil penalty
pursuant to Section 502(i) of ERISA or a tax pursuant to Section 4975 of the
Code in excess of $250,000 for all Plans in the aggregate could reasonably be
expected to be imposed;
(b) permit an "accumulated funding deficiency" (as such term is
defined in Section 302 of ERISA) in excess of $250,000 for all Plans in the
aggregate to be incurred whether or not waived, or permit any Unfunded Liability
which could reasonably be expected to have a Material Adverse Effect;
(c) permit the occurrence of any Reportable Event which could
reasonably be expected to result in liability (i) to Borrower or any Subsidiary
in excess of $250,000 for all Plans in the aggregate or (ii) to any other member
of the Controlled Group in an amount which could reasonably be expected to have
a Material Adverse Effect;
(d) fail to make any contribution or payment to any Multiemployer Plan
which any member of the Controlled Group may be required to make under any
agreement relating to such Multiemployer Plan or any law pertaining thereto
which results in or could result in a liability (i) of Borrower or any
Subsidiary in excess of $250,000 for all Plans in the aggregate or (ii) of any
other member of the Controlled Group which could reasonably be expected to have
a Material Adverse Effect; or
(e) permit the establishment or amendment of any Plan or cause or
permit any Plan to fail to comply with the applicable provisions of ERISA and
the Code, which establishment, amendment or failure could reasonably be expected
to result in liability to any member of the Controlled Group which individually
or in the aggregate could reasonably be expected to have a Material Adverse
Effect.
6.24. ENVIRONMENTAL MATTERS. Borrower shall, and shall cause each of its
Subsidiaries to, (a) at all times comply in all material respects with all
applicable Environmental Laws and (b) promptly take any and all necessary
remedial actions in response to the presence, storage, use, disposal,
transportation or release of any hazardous or toxic materials on, under or about
any real property owned, leased or operated by Borrower or any of its
Subsidiaries, if, in each case, the failure to do so could reasonably be
expected to have a Material Adverse Effect.
6.25. CHANGE IN CORPORATE STRUCTURE; FISCAL YEAR. Borrower shall not, nor
shall it permit any Subsidiary to, (a) permit any amendment or modification to
be made to its certificate or articles of incorporation or by-laws which is
materially adverse to the interests of the Lenders (provided that Borrower shall
notify the Agent of any other amendment or modification thereto as soon as
practicable thereafter) or (b) change its Fiscal Year to end on any date other
than December 31 of each year.
6.26. INCONSISTENT AGREEMENTS. Borrower shall not, nor shall it permit any
Subsidiary to, enter into any indenture, agreement, instrument or other
arrangement which, (a) directly or indirectly prohibits or restrains, or has the
effect of prohibiting or restraining, or imposes materially adverse conditions
upon, the incurrence of the Obligations, the granting of Liens to secure the
Obligations, the extension of the Guaranty Agreement, the continuation of the
Pledge Agreements, the amending of the Loan Documents, or the ability of any
Subsidiary to (i) pay dividends or make other distributions on its capital
stock, (ii) make loans or advances to Borrower or (iii) repay loans or advances
from Borrower or (b) contains any provision which would be violated or breached
by the making of Advances or by the performance by Borrower or Holdings of any
of its obligations under any Loan Document.
6.27. CAPITAL EXPENDITURES. Borrower will not, nor will it permit any
Subsidiary to, expend, or be committed to expend for Capital Expenditures
(including, without limitation, for the acquisition of fixed assets) in excess
of $8,000,000 in any Fiscal Year PLUS the amount in any Fiscal Year of those
Capital Expenditures more particularly described on SCHEDULE 6.27; PROVIDED,
that any amount not used in any Fiscal Year may be used in the next succeeding
Fiscal Year; PROVIDED, FURTHER, that permitted Capital Expenditures for each
Fiscal Year shall first be applied in such Fiscal Year to that year's permitted
amount and then to any amount carried over from the prior Fiscal Year.
6.28. A.M. BEST RATING. UWLIC shall at all times maintain an A.M. Best
rating of at least B++.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall constitute
a Default:
7.1. Any representation or warranty made or deemed made by or on behalf of
Borrower or any of its Subsidiaries to the Lenders or the Agent under or in
connection with this Agreement, any Loan, or any certificate or information
delivered in connection with this Agreement or any other Loan Document shall be
materially false on the date as of which made.
7.2. Nonpayment of principal of any Loan when due, or nonpayment of
interest upon any Loan or of any non-use fee or other obligations under any of
the Loan Documents within five (5) days of when due.
7.3. The breach by Borrower of any of the terms or provisions of SECTION
6.1, SECTION 6.2, SECTION 6.4 or SECTIONS 6.10 through 6.27.
7.4. The breach by Borrower (other than a breach which constitutes a
Default under another Section of this ARTICLE VII) of any of the terms or
provisions of any Loan Document which is not remedied within twenty (20) days
after the earlier of (i) the receipt by Borrower of notice thereof from Agent or
any Lender or (ii) having obtained knowledge thereof.
7.5. (a) Failure of Borrower or any of its Subsidiaries to make any payment
when due aggregating in excess of $1,500,000 ("MATERIAL INDEBTEDNESS") (whether
by scheduled maturity, required prepayment, acceleration, demand or otherwise)
in respect of any Indebtedness unless such failure to pay is, in Agent's
reasonable discretion, being contested in good faith with adequate reserves; or
(b) the default by Borrower or any of its Subsidiaries in the performance
(beyond the applicable grace period with respect thereto, if any) of any term,
provision or condition contained in any agreement under which any such Material
Indebtedness was created or is governed, or any other event shall occur or
condition exist, the effect of which default or event is to cause, or to permit
the holder or holders of such Material Indebtedness to cause, such Material
Indebtedness to become due prior to its stated maturity; or (c) any Material
Indebtedness of Borrower or any of its Subsidiaries shall be declared to be due
and payable or required to be prepaid or repurchased (other than by a regularly
scheduled payment) prior to the stated maturity thereof; or (d) Borrower or any
of its Subsidiaries becomes unable, or admits in writing its inability or fails
generally to pay its debts as they become due.
7.6. Borrower or any of its Subsidiaries shall (a) have an order for relief
entered with respect to it under any Debtor Relief Laws as now or hereafter in
effect, (b) make an assignment for the benefit of creditors, (c) apply for,
seek, consent to, or acquiesce in, the appointment of a receiver, custodian,
trustee, examiner, liquidator or similar official for it or any Substantial
Portion of its Property, (d) institute (or consent to the institution of) any
proceeding seeking an order for relief under any Debtor Relief Laws as now or
hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file an
answer or other pleading denying the material allegations of any such proceeding
filed against it, (e) take any corporate or partnership action to authorize or
effect any of the foregoing actions set forth in this SECTION 7.6 or (f) fail to
contest in good faith any appointment or proceeding described in SECTION 7.7.
7.7. Without the application, approval or consent of Borrower or any of its
Subsidiaries, a receiver, trustee, examiner, liquidator or similar official
shall be appointed for Borrower or any of its Subsidiaries or any Substantial
Portion of its Property, or a proceeding described in SECTION 7.6(A) shall be
instituted against Borrower or any of its Subsidiaries and such appointment
continues undischarged or such proceeding continues undismissed or unstayed for
a period of 60 consecutive days.
7.8. Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of, all or any portion of the
Property of Borrower or any of its Subsidiaries which, when taken together with
all other Property of Borrower and its Subsidiaries so condemned, seized,
appropriated, or taken custody or control of, during the twelve-month period
ending with the month in which any such action occurs, constitutes a Substantial
Portion.
7.9. Borrower or any of its Subsidiaries shall fail within 45 days to pay,
bond or otherwise discharge any judgment or order for the payment of money in
the amount of $1,000,000 in excess of insurance coverage (or multiple judgments
or orders for the payment of an aggregate amount of $2,000,000 in excess of
insurance coverage), which is not stayed on appeal or otherwise being
appropriately contested in good faith and as to which no enforcement actions
have been commenced.
7.10. The Unfunded Liabilities of all Single Employer Plans shall exceed in
the aggregate $250,000 or any Reportable Event shall occur in connection with
any Plan.
7.11. Any Change in Control shall occur.
7.12. Nonpayment by Borrower of any Rate Hedging Obligation owed to any
Lender within five (5) days of when due or the breach by Borrower of any term,
provision or condition contained in any agreement, device or arrangement giving
rise to any such Rate Hedging Obligation.
7.13. Any License of any Material Insurance Subsidiary issued in its state
of domicile or in a state in which its earned premiums in the prior Fiscal Year
constituted 10% or more of its aggregate earned premiums in such period (a)
shall be revoked by the Governmental Authority which issued such License, or any
formal action (administrative or judicial) to revoke such License shall have
been commenced against such Material Insurance Subsidiary and shall not have
been dismissed within 30 days after the commencement thereof, (b) shall be
suspended by such Governmental Authority for a period in excess of 30 days
(except in the case of UWLIC's License in the State of Florida, if such License
is suspended for a period in excess of 366 days) or (c) shall not be reissued or
renewed by such Governmental Authority upon the expiration thereof following
application for such reissuance or renewal of such Material Insurance
Subsidiary.
7.14. Any Insurance Subsidiary shall be the subject of a final
non-appealable order imposing a fine in an amount in excess of $1,000,000 in any
single instance or other such orders imposing fines in excess of $2,000,000 in
the aggregate after the date of this Agreement by or at the request of any state
insurance regulatory agency as a result of the violation by such Insurance
Subsidiary of such state's applicable insurance laws or the regulations
promulgated in connection therewith.
7.15. Any Insurance Subsidiary shall become subject to (a) any conservation
or liquidation order, directive or mandate issued by any Governmental Authority
or (b) any other directive or mandate issued by any Governmental Authority which
is materially adverse to such Insurance Subsidiary, which in either case is not
stayed within ten (10) days.
7.16. The Guaranty Agreement shall fail to remain in full force and effect
or any action shall be taken to discontinue or to assert the invalidity or
unenforceability of the Guaranty Agreement, or Holdings shall fail to comply
with any of the terms or provisions of the Guaranty Agreement or shall deny that
it has any further liability under the Guaranty Agreement or shall give notice
to that effect.
7.17. Any Pledge Agreement shall for any reason fail to create a valid and
perfected, first priority security interest in any collateral purported to be
covered thereby, except as permitted by the terms of such Pledge Agreement, or
any Pledge Agreement shall fail to remain in full force or effect or any action
shall be taken by any Person to discontinue such Pledge Agreement or by Borrower
or any of its Subsidiaries to assert the invalidity or unenforceability of such
Pledge Agreement, or a default shall occur under such Pledge Agreement.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. ACCELERATION. If any Default described in SECTION 7.6 or 7.7 occurs
with respect to Borrower, the obligations of the Lenders to make Loans hereunder
shall automatically terminate and the Obligations shall immediately become due
and payable without any election or action on the part of the Agent or any
Lender. If any other Default occurs, the Required Lenders (or the Agent with the
consent of the Required Lenders) may terminate or suspend the obligations of the
Lenders to make Loans hereunder, or declare the Obligations to be due and
payable, or both, whereupon the Obligations shall become immediately due and
payable, without presentment, demand, protest or notice of any kind, all of
which Borrower hereby expressly waives.
If, within ten (10) Business Days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described in
SECTION 7.6 or 7.7 with respect to Borrower) and before any judgment or decree
for the payment of the Obligations due shall have been obtained or entered, the
Required Lenders (in their sole discretion) shall so direct, the Agent shall, by
notice to Borrower, rescind and annul such acceleration and/or termination.
8.2. AMENDMENTS. Subject to the provisions of this ARTICLE VIII, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or Borrower hereunder or waiving any
Default hereunder; PROVIDED, that no such supplemental agreement shall, without
the consent of all of the Lenders:
(a) Extend the final maturity of any Loan or forgive all or any
portion of the principal amount thereof, or reduce the rate or extend the time
of payment of interest or fees thereon;
(b) Change the percentage specified in the definition of Required
Lenders;
(c) Extend the Facility Termination Date, or reduce the amount or
extend the payment date for, the mandatory payments required under SECTION 2.2
or the mandatory commitment reductions required under SECTION 2.8, or increase
the amount of the Commitment of any Lender hereunder, or permit Borrower to
assign its rights under this Agreement;
(d) Release Holdings from the terms of the Guaranty Agreement;
(e) Release all or a material portion of the collateral which is
subject to either Pledge Agreement; or
(f) Amend this SECTION 8.2.
No amendment of any provision of this Agreement relating to the Agent shall
be effective without the written consent of the Agent. The Agent may waive
payment of the fee required under SECTION 12.3.2 without obtaining the consent
of any other party to this Agreement.
8.3. PRESERVATION OF RIGHTS. No delay or omission of the Lenders or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan notwithstanding the existence of a Default or the inability of
Borrower to satisfy the conditions precedent to such Loan shall not constitute
any waiver or acquiescence. Any single or partial exercise of any such right
shall not preclude other or further exercise thereof or the exercise of any
other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to Section 8.2, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have been paid in
full.
ARTICLE IX
GENERAL PROVISIONS
9.1. SURVIVAL OF REPRESENTATIONS. All representations and warranties of
Borrower contained in this Agreement shall survive the making of the Loans
herein contemplated.
9.2. GOVERNMENTAL REGULATION. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3. HEADINGS. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
9.4. ENTIRE AGREEMENT. The Loan Documents embody the entire agreement and
understanding among Borrower, the Agent and the Lenders and supersede all prior
agreements and understandings among Borrower, the Agent and the Lenders relating
to the subject matter thereof other than the fee letter described in SECTION
10.13.
9.5. SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns.
9.6. EXPENSES; INDEMNIFICATION. (a) Borrower shall reimburse the Agent for
any costs, internal charges and out-of-pocket expenses (including attorneys'
fees and time charges of attorneys for the Agent, which attorneys may be
employees of the Agent) paid or incurred by the Agent in connection with the
preparation, negotiation, execution, delivery, syndication, review, amendment,
modification, and administration of the Loan Documents. Borrower also agrees to
reimburse the Agent and the Lenders for any costs, internal charges and
out-of-pocket expenses (including attorneys' fees and time charges of attorneys
for the Agent and the Lenders, which attorneys may be employees of the Agent or
the Lenders) paid or incurred by the Agent or any Lender in connection with the
collection and enforcement of the Loan Documents. Expenses being reimbursed by
Borrower under this Section include, without limitation, costs and expenses
incurred in connection with the Reports described in the following sentence.
Borrower acknowledges that from time to time LaSalle may prepare and may
distribute to the Lenders (but shall have no obligation or duty to prepare or to
distribute to the Lenders) certain audit reports (the "REPORTS") pertaining to
Borrower's assets for internal use by LaSalle from information furnished to it
by or on behalf of Borrower, after LaSalle has exercised its rights of
inspection pursuant to this Agreement.
(b) Borrower hereby further agrees to indemnify the Agent and each
Lender and the directors, officers and employees of each against all losses,
claims, damages, penalties, judgments, liabilities and expenses (including,
without limitation, all expenses of litigation or preparation therefor whether
or not the Agent or any Lender is a party thereto) which any of them may pay or
incur arising out of or relating to this Agreement, the other Loan Documents,
any merger of Holdings with Borrower, the transactions contemplated hereby, the
other Closing Transactions or the direct or indirect application or proposed
application of the proceeds of any Loan hereunder except to the extent that (i)
they are determined in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the party seeking indemnification or (ii) that they arise solely from any
dispute of or any litigation or other proceeding instituted by any Lender
against the Agent (if the Agent was determined to have breached its obligations
to such Lender hereunder) or (for Persons other than the Agent and its
directors, officers and employees) any other Lender. The obligations of Borrower
under this SECTION 9.6 shall survive the termination of this Agreement.
9.7. NUMBERS OF DOCUMENTS. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Agent with sufficient counterparts
so that the Agent may furnish one to each of the Lenders.
9.8. ACCOUNTING. Except as provided to the contrary herein, all accounting
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with Agreement Accounting Principles.
9.9. SEVERABILITY OF PROVISIONS. Any provision in any Loan Document that is
held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as
to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
9.10. NONLIABILITY OF LENDERS. The relationship between Borrower on the one
hand and the Lenders and the Agent on the other hand shall be solely that of
Borrower and lender. Neither the Agent nor any Lender shall have any fiduciary
responsibilities to Borrower. Neither the Agent nor any Lender undertakes any
responsibility to Borrower to review or inform Borrower of any matter in
connection with any phase of Borrower's business or operations. Borrower agrees
that neither the Agent nor any Lender shall have liability to Borrower (whether
sounding in tort, contract or otherwise) for losses suffered by Borrower in
connection with, arising out of, or in any way related to, the transactions
contemplated and the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless it is determined in
a final non-appealable judgment by a court of competent jurisdiction that such
losses resulted from the gross negligence or willful misconduct of the party
from which recovery is sought. Neither the Agent nor any Lender shall have any
liability with respect to, and Borrower hereby waives, releases and agrees not
to ▇▇▇ for, any special, indirect or consequential damages suffered by Borrower
in connection with, arising out of, or in any way related to the Loan Documents
or the transactions contemplated thereby.
9.11. CONFIDENTIALITY. Each of the Agent and each Lender agrees to hold any
confidential information which it may receive from Borrower pursuant to this
Agreement in confidence, except for disclosure (a) to its Affiliates and to
other Lenders and their respective Affiliates, (b) to legal counsel,
accountants, and other professional advisors to that Lender or to a Transferee,
(c) to regulatory officials, (d) to any Person as requested pursuant to or as
required by law, regulation, or legal process, provided that if not prohibited
by law, the Agent or such Lender will use reasonable efforts to provide notice
to Borrower of the requested disclosure and give Borrower a reasonable
opportunity to seek a protective order with respect to such information prior to
delivering confidential information in response thereto, (e) to any Person in
connection with any legal proceeding to which that Lender is a party, to the
extent reasonably necessary, and (f) permitted by SECTION 12.4.
9.12. NONRELIANCE. Each Lender hereby represents that it is not relying on
or looking to any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Loans provided
for herein.
9.13. DISCLOSURE. Borrower and each Lender hereby (a) acknowledge and agree
that any Lender and/or its Affiliates from time to time may make other loans to
or have other relationships with Borrower, and (b) waive any liability of any
such Lender or such Affiliate to Borrower or any other Lender, respectively,
arising out of or resulting from such loans or relationships other than
liabilities arising out of the gross negligence or willful misconduct of such
Lender or its Affiliates.
ARTICLE X
THE AGENT
10.1. APPOINTMENT; NATURE OF RELATIONSHIP. LaSalle is hereby appointed by
each of the Lenders as its contractual representative (herein referred to as the
"AGENT") hereunder and under each other Loan Document, and each of the Lenders
irrevocably authorizes the Agent to act as the contractual representative of
such Lender with the rights and duties expressly set forth herein and in the
other Loan Documents. The Agent agrees to act as such contractual representative
upon the express conditions contained in this ARTICLE X. Notwithstanding the use
of the defined term "Agent," it is expressly understood and agreed that the
Agent shall not have any fiduciary responsibilities to any Lender by reason of
this Agreement or any other Loan Document and that the Agent is merely acting as
the contractual representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan Documents. In its
capacity as the Lenders' contractual representative, the Agent (a) does not
hereby assume any fiduciary duties to any of the Lenders, (b) is a
"representative" of the Lenders within the meaning of Section 9-105 of the
Uniform Commercial Code and (c) is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. Each of the Lenders hereby agrees to
assert no claim against the Agent on any agency theory or any other theory of
liability for breach of fiduciary duty, all of which claims each Lender hereby
waives.
10.2. POWERS. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder, except any action specifically provided
by the Loan Documents to be taken by the Agent.
10.3. GENERAL IMMUNITY. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to Borrower, the Lenders or any
Lender for any action taken or omitted to be taken by it or them hereunder or
under any other Loan Document or in connection herewith or therewith except to
the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. Neither the Agent nor any
of its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into, or verify (a) any statement, warranty or
representation made in connection with any Loan Document or any borrowing
hereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in ARTICLE IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value, sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of Borrower or of any of
Borrower's Subsidiaries. The Agent shall have no duty to disclose to the Lenders
information that is not required to be furnished by Borrower to the Agent at
such time, but is voluntarily furnished by Borrower to the Agent (either in its
capacity as Agent or in its individual capacity).
10.5. ACTION ON INSTRUCTIONS OF LENDERS. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
10.6. EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute any of its
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7. RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled to rely
upon any note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8. AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (a) for any amounts not
reimbursed by Borrower for which the Agent is entitled to reimbursement by
Borrower under the Loan Documents, (b) for any other expenses incurred by the
Agent on behalf of the Lenders, in connection with the preparation, execution,
delivery, administration and enforcement of the Loan Documents (including,
without limitation, for any expenses incurred by the Agent in connection with
any dispute between the Agent and any Lender or between two or more of the
Lenders) and (c) for any liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind and
nature whatsoever which may be imposed on, incurred by or asserted against the
Agent in any way relating to or arising out of the Loan Documents or any other
document delivered in connection therewith or the transactions contemplated
thereby (including, without limitation, for any such amounts incurred by or
asserted against the Agent in connection with any dispute between the Agent and
any Lender or between two or more of the Lenders), or the enforcement of any of
the terms of the Loan Documents or of any such other documents; PROVIDED, that
no Lender shall be liable for any of the foregoing to the extent any of the
foregoing is found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Agent. The obligations of the Lenders under this SECTION 10.8 shall survive
payment of the Obligations and termination of this Agreement.
10.9. NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Unmatured Default hereunder unless
the Agent has received written notice from a Lender or Borrower referring to
this Agreement describing such Default or Unmatured Default and stating that
such notice is a "notice of default". In the event that the Agent receives such
a notice, the Agent shall give prompt notice thereof to the Lenders.
10.10. RIGHTS AS A LENDER. In the event the Agent is a Lender, the Agent
shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with Borrower or
Holdings or any Subsidiary in which Borrower or Holdings or such Subsidiary is
not restricted hereby from engaging with any other Person. The Agent, in its
individual capacity, is not obligated to remain a Lender.
10.11. LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by Borrower and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
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 credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
10.12. SUCCESSOR AGENT. The Agent may resign at any time by giving written
notice thereof to the Lenders and Borrower, such resignation to be effective
upon the appointment of a successor Agent or, if no successor Agent has been
appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of Borrower and the Lenders, a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders within thirty days after
the resigning Agent giving notice of its intention to resign, then the resigning
Agent may appoint, on behalf of Borrower and the Lenders, a successor Agent.
Notwithstanding the previous sentence, the Agent may at any time without the
consent of Borrower or any Lender, appoint any of its Affiliates which is a
commercial bank as a successor Agent hereunder. If the Agent has resigned or
been removed and no successor Agent has been appointed, the Lenders may perform
all the duties of the Agent hereunder and Borrower shall make all payments in
respect of the Obligations to the applicable Lender and for all other purposes
shall deal directly with the Lenders. No successor Agent shall be deemed to be
appointed hereunder until such successor Agent has accepted the appointment. Any
such successor Agent shall be a commercial bank having capital and retained
earnings of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning or removed Agent. Upon the effectiveness of the resignation or
removal of the Agent, the resigning or removed Agent shall be discharged from
its duties and obligations hereunder and under the Loan Documents. After the
effectiveness of the resignation or removal of an Agent, the provisions of this
ARTICLE X shall continue in effect for the benefit of such Agent in respect of
any actions taken or omitted to be taken by it while it was acting as the Agent
hereunder and under the other Loan Documents. In the event that there is a
successor to the Agent by merger, or the Agent assigns its duties and
obligations to an Affiliate pursuant to this SECTION 10.12, then the term "Prime
Rate" as used in this Agreement shall mean the prime rate, base rate or other
analogous rate of the new Agent.
10.13. AGENT'S FEE. Borrower agrees to pay to the Agent, for its own
account, the fees agreed to by Borrower and the Agent pursuant to that certain
fee letter agreement dated as of even date herewith, or as otherwise agreed from
time to time.
10.14. DELEGATION TO AFFILIATES. Borrower and the Lenders agree that the
Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under ARTICLES IX and X.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. SETOFF. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if Borrower becomes insolvent, however evidenced,
or any Default occurs, any and all deposits (including all account balances,
whether provisional or final and whether or not collected or available) and any
other Indebtedness at any time held or owing by any Lender or any Affiliate of
any Lender to or for the credit or account of Borrower may be offset and applied
toward the payment of the Obligations owing to such Lender, whether or not the
Obligations, or any part thereof, shall then be due; PROVIDED, HOWEVER, that any
Lender may first offset and apply any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) to the payment of any obligations or liabilities (other than the
Obligations) of Borrower to such Lender or any Affiliate of such Lender, whether
or not such obligations or liabilities (other than the Obligations), or any part
thereof, shall then be due.
11.2. RATABLE PAYMENTS. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans (other than payments received pursuant to
SECTION 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made. If an
amount to be setoff is to be applied to the Obligations of Borrower to a Lender
other than Indebtedness comprised of Loans made by such Lender, such amount
shall be applied ratably to such other Indebtedness and to the Indebtedness
comprised of the Loans.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of Borrower and the
Lenders and their respective successors and assigns, except that (a) Borrower
shall not have the right to assign its rights or obligations under the Loan
Documents and (b) any assignment by any Lender must be made in compliance with
SECTION 12.3. Notwithstanding clause (b) of this Section, any Lender may at any
time, without the consent of Borrower or the Agent, assign all or any portion of
its rights under this Agreement and any Note to a Federal Reserve Bank;
PROVIDED, that no such assignment to a Federal Reserve Bank shall release the
transferor Lender from its obligations hereunder. The Agent may treat the Person
which made any Loan or which holds any Note as the owner thereof for all
purposes hereof unless and until such Person complies with SECTION 12.3 in the
case of an assignment thereof or, in the case of any other transfer, a written
notice of the transfer is filed with the Agent. Any assignee or transferee of
the rights to any Loan or any Note agrees by acceptance of such transfer or
assignment to be bound by all the terms and provisions of the Loan Documents.
Any request, authority or consent of any Person, who at the time of making such
request or giving such authority or consent is the owner of the rights to any
Loan (whether or not a Note has been issued in evidence thereof), shall be
conclusive and binding on any subsequent holder, transferee or assignee of the
rights to such Loan.
12.2. PARTICIPATIONS.
12.2.1. PERMITTED PARTICIPANTS; EFFECT. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time sell
to one or more banks or other entities ("PARTICIPANTS") participating interests
in any Loan owing to such Lender, any Note held by such Lender, any Commitment
of such Lender or any other interest, right and/or obligation of such Lender
under the Loan Documents. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under the
Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
such Lender shall remain the owner of its Loans and the holder of any Note
issued to it in evidence thereof for all purposes under the Loan Documents, all
amounts payable by Borrower under this Agreement shall be determined as if such
Lender had not sold such participating interests, and Borrower and the Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under the Loan Documents.
12.2.2. VOTING RIGHTS. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, modification or
waiver of any provision of the Loan Documents other than any amendment,
modification or waiver with respect to any Loan or Commitment in which such
Participant has an interest which forgives principal, interest or fees or
reduces the interest rate or fees payable with respect to any such Loan or
Commitment, extends the Facility Termination Date, postpones any date fixed for
any regularly-scheduled payment of principal of, or interest or fees on, any
such Loan or Commitment, releases any Guarantors of any such Loan or releases
all or substantially all of the collateral, if any, securing any such Loan.
12.2.3. BENEFIT OF SETOFF. Borrower agrees that each Participant shall
be deemed to have the right of setoff provided in SECTION 11.1 in respect of its
participating interest in amounts owing under the Loan Documents to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under the Loan Documents, provided that each Lender shall retain the
right of setoff provided in SECTION 11.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree to share
with each Participant, and each Participant, by exercising the right of setoff
provided in SECTION 11.1, agrees to share with each Lender, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with SECTION 11.2 as if each Participant were a Lender.
12.3. ASSIGNMENTS.
12.3.1. PERMITTED ASSIGNMENTS. Any Lender may, in the ordinary course
of its business and in accordance with applicable law, at any time assign to one
or more banks or other entities ("PURCHASERS") all or any part of its rights and
obligations under the Loan Documents. Such assignment shall be substantially in
the form of EXHIBIT B or in such other form as may be agreed to by the parties
thereto. The consent of Borrower and the Agent shall be required prior to an
assignment becoming effective with respect to a Purchaser which is not a Lender
or an Affiliate thereof; PROVIDED, that if a Default has occurred and is
continuing, the consent of Borrower shall not be required. Such consent shall
not be unreasonably withheld or delayed. Each such assignment shall (unless (x)
each of Borrower and the Agent otherwise consents or (y) the proposed Purchaser
is already a Lender) be in an amount not less than the lesser of (a) $5,000,000
or (b) the remaining amount of the assigning Lender's Commitment (calculated as
at the date of such assignment).
12.3.2. EFFECT; EFFECTIVE DATE. Upon (a) delivery to the Agent of a
notice of assignment, substantially in the form attached as Exhibit I to EXHIBIT
B (a "NOTICE OF ASSIGNMENT"), together with any consents required by SECTION
12.3.1, and (b) payment of a $3,500 fee to the Agent for processing such
assignment, such assignment shall become effective on the effective date
specified in such Notice of Assignment. The Notice of Assignment shall contain a
representation by the Purchaser to the effect that none of the consideration
used to make the purchase of the Commitment and Loans under the applicable
assignment agreement are "plan assets" as defined under ERISA and that the
rights and interests of the Purchaser in and under the Loan Documents will not
be "plan assets" under ERISA. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by or on behalf of the Lenders
and shall have all the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party hereto, and no
further consent or action by Borrower, the Lenders or the Agent shall be
required to release the transferor Lender with respect to the percentage of the
Aggregate Commitment and Loans assigned to such Purchaser. Upon the
consummation of any assignment to a Purchaser pursuant to this SECTION 12.3.2,
the transferor Lender, the Agent and Borrower shall, if the transferor Lender or
the Purchaser desires that its Loans be evidenced by Notes, make appropriate
arrangements so that new Notes or, as appropriate, replacement Notes are issued
to such transferor Lender and new Notes or, as appropriate, replacement Notes,
are issued to such Purchaser, in each case in principal amounts reflecting
their respective Commitments, as adjusted pursuant to such assignment.
12.4. DISSEMINATION OF INFORMATION. Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "TRANSFEREE") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of Borrower, Holdings, UWLIC and the
Subsidiaries, including without limitation any information contained in any
Reports; PROVIDED, that each Transferee and prospective Transferee agrees to be
bound by SECTION 9.11 of this Agreement.
12.5. TAX TREATMENT. If any interest in any Loan Document is transferred to
any Transferee which is organized under the laws of any jurisdiction other than
the United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of SECTION 3.5(D).
ARTICLE XIII
NOTICES
13.1. NOTICES. Except as otherwise permitted by SECTION 2.17 with respect
to Borrowing Notices, all notices, requests and other communications to any
party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
at its address or facsimile number set forth on the signature pages hereof, or
(y) at such other address or facsimile number as such party may hereafter
specify for the purpose by notice to the Agent and Borrower in accordance with
the provisions of this SECTION 13.1. Each such notice, request or other
communication shall be effective (a) if given by facsimile transmission, when
transmitted to the facsimile number specified in this Section and confirmation
of receipt is received, (b) if given by mail, 72 hours after such communication
is deposited in the mail with first class postage prepaid, addressed as
aforesaid, or (c) if given by any other means, when delivered (or, in the case
of electronic transmission, received) at the address specified in this Section;
PROVIDED, that notices to the Agent under ARTICLE II shall not be effective
until received.
13.2. CHANGE OF ADDRESS. Borrower, the Agent and any Lender may each change
the address for service of notice upon it by a notice in writing to the other
parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of original counterparts, all
of which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such original counterpart. This
Agreement may also be executed in any number of e-mailed counterparts, all of
which taken together shall constitute one agreement, even if printed separately
from different print servers, and any of the parties hereto may execute this
Agreement by signing any such e-mailed counterpart. This Agreement shall be
effective when it has been executed by Borrower, the Agent and the Lenders and
each party has notified the Agent by facsimile transmission or telephone that it
has taken such action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
15.2. CONSENT TO JURISDICTION. BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT
SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND BORROWER HEREBY IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE
AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT
OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE
RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY BORROWER AGAINST
THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO,
ILLINOIS.
15.3. WAIVER OF JURY TRIAL. BORROWER, THE AGENT AND EACH LENDER HEREBY
WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
[Remainder of Page Intentionally Left Blank]
[This Page Intentionally Left Blank]
IN WITNESS WHEREOF, Borrower, the Lenders and the Agent have executed this
Agreement as of the date first above written.
AMERICAN MEDICAL SECURITY GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President, Finance and Controller
Address: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
COMMITMENTS
$20,000,000 LASALLE BANK NATIONAL ASSOCIATION,
Individually and as Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
Title: Commercial Banking Officer
------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
$15,000,000 ASSOCIATED BANK, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------
Title: Vice President
------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
$15,000,000 BANK ONE, N.A.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
Title: Vice President
------------------------------------------
Address: ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
===========
$50,000,000 Aggregate Commitment
EXHIBIT A
COMPLIANCE CERTIFICATE
I, ________________________ certify that I am the ________________________
of American Medical Security Group, Inc. ("Borrower"), and that as such I am
authorized to execute this Compliance Certificate on behalf of Borrower, and DO
HEREBY FURTHER CERTIFY on behalf of Borrower that:
1. I have reviewed the terms of that certain Credit Agreement, dated as of
December 30, 2002, among Borrower, the financial institutions named therein (the
"Lenders") and LaSalle Bank National Association, as agent (the "Agent") (as
amended, supplemented or modified from time to time, the "Credit Agreement") and
I have made, or have caused to be made by employees or agents under my
supervision, a detailed review of the transactions and conditions of Borrower
and its Subsidiaries (as this and other capitalized terms not defined herein are
defined in the Credit Agreement) during the accounting period covered by the
attached financial statements;
2. The examinations described in paragraph 1 did not disclose, and I have
no knowledge of, the existence of any condition or event which constitutes a
Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Compliance Certificate, except as set forth below; and
3. Schedule I attached hereto sets forth financial data and computations
evidencing compliance with the covenants set forth in Sections 6.11, 6.13, 6.14,
6.15 and 6.19 of the Credit Agreement, all of which data and computations are
true, complete and correct.
Described below are the exceptions, if any, to paragraph 2 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Compliance
Certificate in support hereof, are made and delivered this ____ day of
_____________, 20___.
AMERICAN MEDICAL SECURITY GROUP, INC.
By:
-----------------------------------------
Title:
--------------------------------------
SCHEDULE I
SECTION 6.19.1 -- FIXED CHARGE COVERAGE RATIO
1. Required Fixed Charge Coverage Ratio
(a) 4.0 to 1.0
2. Actual Fixed Charge Coverage Ratio
(a) EBITDA for such period (as adjusted, if necessary) $ EBITDA
-----------------
(b) amounts paid out as dividends during such period $
-----------------
(c) (a) minus (b) $
(d) Consolidated Interest Expense for the period of
four Fiscal Quarters ending on such date $
-----------------
(e) required payments of principal of Consolidated Indebtedness
during such period (as adjusted, if necessary, for the balloon
payment due in the year 2004 on the loan made by M&I
▇▇▇▇▇▇▇▇ & Ilsley Bank) $
-----------------
(f) amounts due under Operating Leases during such period $
-----------------
(g) sum of (d), (e) and (f) $
-----------------
(h) ratio of (c) to (g) ____ to 1.0
SECTION 6.19.2 -- LEVERAGE RATIO
1. Required Leverage Ratio 0.30 to 1.0
2. Actual Leverage Ratio:
(a) Consolidated Indebtedness $
(b) Consolidated Net Worth, determined without giving
effect to SFAS No. 115 or SFAS No. 133 $
-----------------
(c) Sum of (a) plus (b) $
(d) Ratio of (a) to (c) ____ to 1.0
SECTION 6.19.3 -- CONSOLIDATED NET WORTH
1. Required Consolidated Net Worth:
(a) $175,000,000
(b) Cumulative positive Consolidated Net Income for each Fiscal
Year commencing on December 31, 2003, and on or prior to the
date of determination (excluding changes
in unrealized gain/loss) $
-----------------
(c) .50 times (b) $
-----------------
(d) 25% of the Net Available Proceeds received by Borrower or any
Subsidiary from the issuance of equity securities after the
Initial Closing Date
(e) (a) PLUS (c) PLUS (d) $
2. Actual Consolidated Net Worth, determined without giving
effect to SFAS No. 115 or SFAS No. 133 $
-----------------
SECTION 6.19.5 -- UWLIC STATUTORY CAPITAL AND SURPLUS
1. Required UWLIC Statutory Capital and Surplus:
(a) $125,000,000
(b) Cumulative positive UWLIC Statutory Net Income for each Fiscal
Year commencing on December 31, 2003, and on or prior to the
date of determination (excluding
changes in unrealized gain/loss) $
-----------------
(c) .50 times (b) $
-----------------
(d) (a) PLUS (c) $
2. Actual UWLIC Statutory Capital and Surplus $
-----------------
SECTION 6.19.6 -- RISK BASED CAPITAL
For each Material Insurance Subsidiary:
1. Required Ratio of Total Adjusted Capital to
Company Action Level RBC 175%
2. Actual Ratio of Total Adjusted Capital to
Company Action Level RBC _____ %
EXHIBIT B
FORM OF
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
______________ (the "Assignor") and _______________________________ (the
"Assignee") is dated as of ____________________. The parties hereto agree as
follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to an Credit Agreement
(which, as it may be amended, supplemented, modified, renewed or extended from
time to time is herein called the "Credit Agreement") described in Item 1 of
SCHEDULE 1 attached hereto. Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed thereto in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement such that after giving effect to such assignment the Assignee shall
have purchased pursuant to this Assignment Agreement the percentage interest
specified in Item 3 of SCHEDULE 1 of all outstanding rights and obligations
under the Credit Agreement relating to the Loans and the other Loan Documents.
The aggregate Commitment (or Loans, if the applicable Commitment has been
terminated) purchased by the Assignee hereunder is set forth in Item 4 of
SCHEDULE 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 5 of SCHEDULE
1 or two Business Days (or such shorter period agreed to by the Agent) after a
Notice of Assignment substantially in the form of EXHIBIT I attached hereto has
been delivered to the Agent. Such Notice of Assignment must include any consents
required to be delivered to the Agent pursuant to Section 12.3.1 of the Credit
Agreement. In no event will the Effective Date occur if the payments required to
be made by the Assignee to the Assignor on the Effective Date under SECTION 4
hereof are not made on the proposed Effective Date. The Assignor will notify the
Assignee of the proposed Effective Date no later than the Business Day prior to
the proposed Effective Date. As of the Effective Date, (a) the Assignee shall
have the rights and obligations of a Lender under the Loan Documents with
respect to the rights and obligations assigned to the Assignee hereunder, and
(b) the Assignor shall relinquish its rights and be released from its
corresponding obligations under the Loan Documents with respect to the rights
and obligations assigned to the Assignee hereunder.
4. PAYMENT OBLIGATIONS. On and after the Effective Date, the Assignee shall
be entitled to receive from the Agent all payments of principal, interest and
fees with respect to the interest assigned hereby. The Assignee shall advance
funds directly to the Agent with respect to all Loans and reimbursement payments
made on or after the Effective Date with respect to the interest assigned
hereby. [In consideration for the sale and assignment of Loans hereunder, (a)
the Assignee shall pay the Assignor, on the Effective Date, an amount equal to
the principal amount of the portion of all Floating Rate Advances assigned to
the Assignee hereunder, and (b) with respect to each LIBOR Advance made by the
Assignor and assigned to the Assignee hereunder which is outstanding on the
Effective Date, (i) on the last day of the Interest Period therefor, (ii) on
such earlier date agreed to by the Assignor and the Assignee, or (iii) on the
date on which any such LIBOR Advance either becomes due (by acceleration or
otherwise) or is prepaid (the date as described in the foregoing clauses (i),
(ii) or (iii) being hereinafter referred to as the "Payment Date"), the Assignee
shall pay the Assignor an amount equal to the principal amount of the portion of
such LIBOR Advance assigned to the Assignee which is outstanding on the Payment
Date. If the Assignor and the Assignee agree that the Payment Date for such
LIBOR Advance shall be the Effective Date, they shall agree to the interest rate
applicable to the portion of such Loan assigned hereunder for the period from
the Effective Date to the end of the existing Interest Period applicable to such
LIBOR Advance (the "Agreed Interest Rate") and any interest received by the
Assignee in excess of the Agreed Interest Rate shall be remitted to the
Assignor. In the event interest for the period from the Effective Date to but
not including the Payment Date is not paid by Borrower with respect to any LIBOR
Advance sold by the Assignor to the Assignee hereunder, the Assignee shall pay
to the Assignor interest for such period on the portion of such LIBOR Advance
sold by the Assignor to the Assignee hereunder at the applicable rate provided
by the Credit Agreement. In the event a prepayment of any LIBOR Advance which is
existing on the Payment Date and assigned by the Assignor to the Assignee
hereunder occurs after the Payment Date but before the end of the Interest
Period applicable to such LIBOR Advance, the Assignee shall remit to the
Assignor the excess of the prepayment penalty paid with respect to the portion
of such LIBOR Advance assigned to the Assignee hereunder over the amount which
would have been paid if such prepayment penalty was calculated based on the
Agreed Interest Rate. The Assignee will also promptly remit to the Assignor (x)
any principal payments received from the Agent with respect to LIBOR Advances
prior to the Payment Date, and (y) any amounts of interest on Loans and fees
received from the Agent which relate to the portion of the Loans assigned to the
Assignee hereunder for periods prior to the Effective Date, in the case of
Floating Rate Loans, or the Payment Date, in the case of LIBOR Loans, and not
previously paid by the Assignee to the Assignor.]* In the event that either
party hereto receives any payment to which the other party hereto is entitled
under this Assignment Agreement, then the party receiving such amount shall
promptly remit it to the other party hereto.
* Each Assignor may insert its standard payment provisions in lieu of the
payment terms included in this Exhibit.
5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the Assignor a
fee on each day on which a payment of interest or non-use fees is made under the
Credit Agreement with respect to the amounts assigned to the Assignee hereunder
(other than a payment of interest or non-use fees for the period prior to the
Effective Date or, in the case of LIBOR Loans, the Payment Date, which the
Assignee is obligated to deliver to the Assignor pursuant to SECTION 4 hereof).
The amount of such fee shall be the difference between (a) the interest or fee,
as applicable, paid with respect to the amounts assigned to the Assignee
hereunder and (b) the interest or fee, as applicable, which would have been paid
with respect to the amounts assigned to the Assignee hereunder if each interest
rate was of 1% less than the interest rate paid by Borrower or if the non-use
fee was __ of 1% less than the non-use fee paid by Borrower, as applicable. In
addition, the Assignee agrees to pay __ % of the recordation fee required to be
paid to the Agent in connection with this Assignment Agreement.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor. It is
understood and agreed that the assignment and assumption hereunder are made
without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor nor
any of its officers, directors, employees, agents or attorneys shall be
responsible for (a) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectibility of any Loan Document, including,
without limitation, documents granting the Assignor and the other Lenders a
security interest in assets of Borrower or any guarantor, (b) any
representation, warranty or statement made in or in connection with any of the
Loan Documents, (c) the financial condition or creditworthiness of Borrower or
any guarantor, (d) the performance of or compliance with any of the terms or
provisions of any of the Loan Documents, (e) inspecting any of the Property,
books or records of Borrower, (f) the validity, enforceability, perfection,
priority, condition, value or sufficiency of any collateral securing or
purporting to secure the Loans, or (g) any mistake, error of judgment, or action
taken or omitted to be taken in connection with the Loans or the Loan Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (a) confirms that it has
received a copy of the Credit Agreement, together with copies of the financial
statements requested by the Assignee and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment Agreement, (b) agrees that it will, independently and
without reliance upon the Agent, the Assignor or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Documents, (c) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under the Loan Documents as are
delegated to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto, (d) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Loan Documents
are required to be performed by it as a Lender, (e) agrees that its payment
instructions and notice instructions are as set forth in the attachment to
SCHEDULE 1, (f) confirms that none of the funds, monies, assets or other
consideration being used to make the purchase and assumption hereunder are "plan
assets" as defined under ERISA and that its rights, benefits and interests in
and under the Loan Documents will not be "plan assets" under ERISA, [and (g)
attaches the forms prescribed by the Internal Revenue Service of the United
States certifying that the Assignee is entitled to receive payments under the
Loan Documents without deduction or withholding of any United States federal
income taxes].*
* to be inserted if the Assignee is not incorporated under the laws of the
United States, or a state thereof.
8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the Assignor
in connection with or arising in any manner from the Assignee's non-performance
of the obligations assumed under this Assignment Agreement. The obligations of
the Assignee under this SECTION 7 shall survive the payment of all amounts
hereunder and the termination of this Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee shall
have the right pursuant to and in accordance with Section 12.3 of the Credit
Agreement to assign the rights which are assigned to the Assignee hereunder to
any entity or person; PROVIDED, that (a) any such subsequent assignment does not
violate any of the terms and conditions of the Loan Documents or any law, rule,
regulation, order, writ, judgment, injunction or decree and that any consent
required under the terms of the Loan Documents has been obtained, and (b) unless
the prior written consent of the Assignor is obtained, the Assignee is not
thereby released from its obligations to the Assignor hereunder, if any remain
unsatisfied, including, without limitation, its obligations under SECTIONS 4, 5,
6, 7 and 8 hereof.
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the Aggregate
Commitment occurs between the date of this Assignment Agreement and the
Effective Date, the percentage interest specified in Item 3 of SCHEDULE 1 shall
remain the same, but the dollar amount purchased shall be recalculated based on
the reduced Aggregate Commitment.
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached Notice of
Assignment embody the entire agreement and understanding between the parties
hereto and supersede all prior agreements and understandings between the parties
hereto relating to the subject matter hereof.
12. GOVERNING LAW. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY THE
INTERNAL LAWS, WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS, OF THE STATE OF
ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
13. NOTICES. Notices shall be given under this Assignment Agreement in the
manner set forth in the Credit Agreement. For the purpose hereof, the addresses
of the parties hereto (until notice of a change is delivered) shall be the
address set forth in the attachment to SCHEDULE 1.
[signature page to follow]
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
-------------------------------- --------------------------------
Title: Title:
----------------------------- -----------------------------
SCHEDULE 1
TO ASSIGNMENT AGREEMENT
1. Description and Date of Credit Agreement:
That certain Credit Agreement dated as of December 30, 2002 among American
Medical Security Group, Inc., the Lenders named therein and LaSalle Bank
National Association, as Agent.
2. Date of Assignment Agreement: , 20__
3. Amounts (As of Date of Item 2 above):
(a) Total of Commitments (Loans)*
under Credit Agreement $
------------------
(b) Assignee's percentage of the (Loans)*
Commitments purchased under the
Assignment Agreement** %
-----------------
4. Assignee's aggregate (Loan amount)*
Commitment amount purchased hereunder: $
5. Proposed Effective Date:
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
-------------------------------- --------------------------------
Title: Title:
----------------------------- -----------------------------
* If a Commitment has been terminated, insert outstanding Loans in place of
Commitment
** Percentage taken to 10 decimal places
ATTACHMENT TO SCHEDULE 1 TO ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet, which must
include notice address for the Assignor and the Assignee
(sample form shown below)
ASSIGNOR INFORMATION
CONTACT:
Name:
---------------------------------------
Telephone No.:
------------------------------
Fax No:
-------------------------------------
PAYMENT INFORMATION:
Name & ABA No. of Destination Bank:
-----------------------------------
Account Name & Number for Wire Transfer:
------------------------------
Other Instructions:
----------------------------------------------------
ADDRESS FOR NOTICES FOR ASSIGNOR:
ASSIGNEE INFORMATION
CREDIT CONTACT:
Name:
---------------------------------------
Telephone No.:
------------------------------
Fax No:
-------------------------------------
KEY OPERATIONS CONTACTS:
Booking Installation:
Name:
---------------------------------------
Telephone No.:
------------------------------
Fax No:
-------------------------------------
PAYMENT INFORMATION:
Name & ABA No. of Destination Bank:
--------------------------
Account Name & Number for Wire Transfer:
----------------------
Other Instructions:
-------------------------------------------------------------
ADDRESS FOR NOTICES FOR ASSIGNEE:
LASALLE INFORMATION
Assignee will be called promptly upon receipt of the signed agreement.
INITIAL FUNDING CONTACT: SUBSEQUENT OPERATIONS CONTACT:
Name: Name:
--------------------------- -------------------------------
Telephone No.: (312) Telephone No.: (312)
Fax No.: (312) Fax No.: (312)
INITIAL FUNDING STANDARDS
LIBOR - Fund 2 days after rates are set.
LASALLE WIRE INSTRUCTIONS:
LaSalle Bank National Association, ABA _____________
BNF = __________/___, Ref:
_____________________________________
ADDRESS FOR NOTICES FOR LASALLE:
Chicago, IL
Attn:
Fax No. (312) ___________ or (312) ____________
EXHIBIT I
TO ASSIGNMENT AGREEMENT
NOTICE OF ASSIGNMENT
-------------- --, --
To: American Medical Security Group, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
LaSalle Bank National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to the Credit Agreement (the "Credit Agreement") described in
Item 1 of SCHEDULE 1 attached hereto. Capitalized terms used herein and not
otherwise defined herein or in such consent shall have the meanings attributed
to them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered to
Borrower and the Agent pursuant to Section 12.3.2 of the Credit Agreement.
3. The Assignor and the Assignee have entered into an Assignment Agreement,
dated as of , (the "Assignment"), pursuant to which, among other things, the
Assignor has sold, assigned, delegated and transferred to the Assignee, and the
Assignee has purchased, accepted and assumed from the Assignor the percentage
interest specified in Item 3 of SCHEDULE 1 of all outstanding, rights and
obligations under the Credit Agreement relating to the facilities listed in Item
3 of SCHEDULE 1, including, without limitation, such interest in the Assignor's
Commitment (if applicable) and the Loans owing to the Assignor relating to such
facilities. The effective date of the Assignment (the "Effective Date") shall be
the later of the date specified in Item 5 of SCHEDULE 1 or two Business Days (or
such shorter period as agreed to by the Agent) after this Notice of Assignment
and any consents and fees required by Sections 12.3.1 and 12.3.2 of the Credit
Agreement have been delivered to the Agent; PROVIDED, that the Effective Date
shall not occur if any condition precedent agreed to by the Assignor and the
Assignee has not been satisfied.
4. The Assignor and the Assignee hereby give to Borrower and the Agent
notice of the assignment and delegation referred to herein. The Assignor will
confer with the Agent before the date specified in Item 5 of SCHEDULE 1 to
determine if the Assignment Agreement will become effective on such date
pursuant to SECTION 3 hereof and will confer with the Agent to determine the
Effective Date pursuant to SECTION 3 hereof if it occurs thereafter. The
Assignor shall notify the Agent if the Assignment does not become effective on
any proposed Effective Date as a result of the failure to satisfy the conditions
precedent agreed to by the Assignor and the Assignee. At the request of the
Agent, the Assignor will give the Agent written confirmation of the satisfaction
of the conditions precedent.
5. The Assignor or the Assignee shall pay to the Agent on or before the
Effective Date the processing fee of $3,500 required by Section 12.3.2 of the
Credit Agreement.
6. If Notes are outstanding on the Effective Date, the Assignor and the
Assignee request and direct that the Agent prepare and cause Borrower to execute
and deliver new Notes or, as appropriate, replacement Notes, to the Assignor and
the Assignee. The Assignor and, if applicable, the Assignee each agree to
deliver to the Agent the original Notes received by it from Borrower upon its
receipt of new Notes in the appropriate amount.
7. The Assignee advises the Agent that notice and payment instructions are
set forth in the attachment to SCHEDULE 1.
8. Each party consenting to the Assignment in the space indicated below
hereby releases the Assignor from any obligations to it which have been assigned
to the Assignee. The Assignee hereby represents and warrants that none of the
funds, monies, assets or other consideration being used to make the purchase
pursuant to the Assignment are "plan assets" as defined under ERISA and that its
rights, benefits and interests in and under the Loan Documents will not be "plan
assets" under ERISA.
9. The Assignee authorizes the Agent to act as its agent under the Loan
Documents in accordance with the terms thereof. The Assignee acknowledges that
the Agent has no duty to supply information with respect to Borrower or the Loan
Documents to the Assignee until the Assignee becomes a party to the Credit
Agreement.
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
-------------------------------- --------------------------------
Title: Title:
----------------------------- -----------------------------
Acknowledged And Consented [Acknowledged And Consented
To By LaSalle Bank National To By American Medical Security
Association, As Agent Group, Inc.]
By: By:
-------------------------------- --------------------------------
Title: Title:
----------------------------- -----------------------------
[Attach photocopy of Schedule 1 to Assignment]
EXHIBIT C
FORM OF
REVOLVING NOTE
$ ______________ Dated: December 30, 2002
FOR VALUE RECEIVED, American Medical Security Group, Inc. ("Borrower")
HEREBY PROMISES TO PAY to the order of (the "Lender") the principal sum of
United States Dollars ($ ) or, if less, the aggregate unpaid principal amount of
the Revolving Loans made by the Lender to Borrower pursuant to SECTION 2.1 of
the Credit Agreement (as hereinafter defined), on or before the Facility
Termination Date; together, in each case, with interest on any and all principal
amounts remaining unpaid hereunder from time to time. Interest upon the unpaid
principal amount hereof shall accrue at the rates, shall be calculated in the
manner and shall be payable on the dates set forth in the Credit Agreement.
After maturity, whether by acceleration or otherwise, accrued interest shall be
payable upon demand. Both principal and interest shall be payable in accordance
with the Credit Agreement to LaSalle Bank National Association, as Agent (the
"Agent") on behalf of the Lender, at its main office in Chicago, Illinois in
immediately available funds. The Revolving Loans made by the Lender to Borrower
pursuant to the Credit Agreement and all payments on account of principal hereof
shall be recorded by the Lender and, prior to any transfer thereof, endorsed on
SCHEDULE A attached hereto which is part of this Revolving Note or otherwise in
accordance with its usual practices; PROVIDED, HOWEVER, that the failure to so
record shall not affect Borrower's obligations under this Revolving Note.
This Revolving Note is a Revolving Note referred to in, and is entitled to
the benefits of, the Credit Agreement dated as of December 30, 2002 by and among
Borrower, the Lenders named therein (including the Lender) and the Agent (as
amended, modified or supplemented from time to time, the "Credit Agreement") and
the other Loan Documents. Capitalized terms used but not otherwise defined
herein shall have the respective meanings ascribed thereto in the Credit
Agreement. The Credit Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified.
Borrower hereby waives presentment, demand, protest or notice of any kind
in connection with this Revolving Note.
THIS REVOLVING NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS, WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS, OF THE STATE
OF ILLINOIS BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
AMERICAN MEDICAL SECURITY GROUP, INC.
By:
-------------------------------------------------------
Title:
----------------------------------------------------