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EXHIBIT 10.5
ACCEPTANCE INSURANCE COMPANIES INC.
============================================
$100,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of June 6, 1997
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THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
COMERICA BANK
FIRST NATIONAL BANK OF OMAHA
and
FIRST BANK, N.A.,
as Co-Agents
THE FIRST NATIONAL BANK OF CHICAGO
COMERICA BANK
FIRST NATIONAL BANK OF OMAHA
FIRST BANK, ▇.▇.
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
and
MERCANTILE BANK, N.A.,
as Banks
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TABLE OF CONTENTS
ARTICLE PAGE
ARTICLE I. DEFINITIONS.............................................. 1
1.1 Certain Definitions................................. 1
1.2 Other Definitions; Rules of Construction............ 15
ARTICLE II. THE COMMITMENTS AND THE LOANS............................ 16
2.1 Commitments of the Banks............................ 16
2.2 Termination and Reduction of Commitments............ 16
(a) Optional Termination or Reduction............... 16
(b) Scheduled Commitment Reductions................. 16
(c) Mandatory Commitment Reductions................. 17
(d) Proportionate Reductions; No Reinstatement...... 17
2.3 Fees................................................ 17
(a) Commitment Fee.................................. 17
(b) Closing Fee..................................... 17
(c) Agent's Fees.................................... 17
2.4 Disbursement of Loans............................... 18
2.5 Conditions for First Disbursement................... 19
(a) Charter Documents............................... 19
(b) By-Laws and Corporate Authorizations............ 19
(c) Incumbency Certificate.......................... 19
(d) Notes........................................... 19
(e) Security Documents.............................. 20
(f) Legal Opinion................................... 20
(g) Consents, Approvals, Etc........................ 20
(h) Fees............................................ 20
(i) Termination of Original Credit Agreement........ 20
(j) Subrogation and Contribution Agreement.......... 20
(k) Pledged Subsidiary Good-Standing Certificates... 20
(l) Adequacy of Reserves for 1996................... 20
(m) Approval of American Agrisurance/AGIC Agreement. 20
(n) Other Documents and Matters..................... 21
2.6 Further Conditions for Disbursement................. 21
2.7 Subsequent Elections as to Borrowings............... 21
2.8 Limitation of Requests and Elections................ 22
2.9 Minimum Amounts; Limitation on Number of
Borrowings; Etc..................................... 22
2.10 Security and Collateral............................. 22
ARTICLE III. PAYMENTS AND PREPAYMENTS OF BORROWINGS................... 23
3.1 Principal Payments and Prepayments................... 23
3.2 Interest Payments.................................... 23
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ARTICLE
PAGE
3.3 Payment Method....................................... 24
3.4 No Setoff Deduction.................................. 24
3.5 Payment on Non-Business Day; Payment Computations.... 25
3.6 Additional Costs..................................... 25
3.7 Illegality and Impossibility......................... 26
3.8 Indemnification...................................... 26
ARTICLE IV. REPRESENTATIONS AND WARRANTIES............................ 27
4.1 Corporate Existence and Power........................ 27
4.2 Corporate Authority.................................. 28
4.3 Binding Effect....................................... 28
4.4 Subsidiaries......................................... 28
4.5 Litigation........................................... 28
4.6 Financial Condition.................................. 28
4.7 Use of Loans......................................... 29
4.8 Consents, Etc........................................ 29
4.9 Taxes................................................ 29
4.10 Title to Properties.................................. 29
4.11 ERISA................................................ 30
4.12 Disclosure........................................... 30
4.13 Environmental Matters................................ 30
4.14 Integrated Operation................................. 31
4.15 American Agrisurance/AGIC Agreement.................. 31
4.16 Material Adverse Change.............................. 31
4.17 Material Agreements.................................. 31
ARTICLE V. COVENANTS................................................. 32
5.1 Affirmative Covenants................................. 32
(a) Preservation of Corporate Existence, Etc.......... 32
(b) Compliance with Laws, Etc......................... 32
(c) Maintenance of Properties; Insurance.............. 32
(d) Reporting Requirements............................ 33
(e) Accounting; Access to Records, Books, Etc......... 35
(f) Additional Collateral............................. 35
(g) Further Assurances................................ 35
5.2 Negative Covenants.................................... 35
(a) Augmented Cash Flow Coverage Ratio................ 36
(b) Funded Debt to Total Capitalization............... 36
(c) Maximum Operating Leverage........................ 36
(d) Net Worth......................................... 36
(e) Investment, Loans and Advances.................... 36
(f) Quality of Reinsurers............................. 36
(g) NAIC Ratio Requirements........................... 37
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ARTICLE PAGE
(h) Merger; Acquisitions; Etc......................... 37
(i) Disposition of Assets............................. 37
(j) Nature of Business................................ 37
(k) Stock of Subsidiaries............................. 37
(l) Indebtedness...................................... 37
(m) Liens............................................. 38
(n) Contingent Liabilities............................ 40
(o) Inconsistent Agreements........................... 40
(p) Dividends and Other Restricted Payments........... 40
(q) Transactions with Affiliates...................... 40
(r) Payments and Modification of Subordinated Debt.... 40
(s) Tax Sharing Agreement............................. 41
(t) Negative Pledge Prohibition....................... 41
ARTICLE VI. DEFAULT................................................... 41
6.1 Events of Default..................................... 41
(a) Nonpayment........................................ 41
(b) Misrepresentation................................. 41
(c) Certain Covenants................................. 41
(d) Other Defaults.................................... 41
(e) Cross Default..................................... 41
(f) Judgments......................................... 42
(g) ERISA............................................. 42
(h) Insolvency, Etc................................... 43
(i) Security Documents................................ 43
(j) Key Management.................................... 43
(k) Regulatory Action................................. 43
(l) Maintenance of Catastrophic Reinsurance........... 43
(l) Change in Control................................. 44
(l) Distribution on Trust Preferred Securities........ 44
6.2 Remedies.............................................. 44
ARTICLE VII. THE AGENT AND THE BANKS................................... 45
7.1 Appointment and Authorization......................... 45
7.2 Agent and Affiliates.................................. 45
7.3 Scope of Agent's Duties............................... 45
7.4 Reliance by Agent..................................... 45
7.5 Default............................................... 46
7.6 Liability of Agent.................................... 46
7.7 Nonreliance on Agent and Other Banks.................. 46
7.8 Indemnification....................................... 46
7.9 Successor Agent....................................... 47
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ARTICLE PAGE
7.10 Sharing of Payments...................................47
7.11 The Co-Agents.........................................48
ARTICLE VIII. MISCELLANEOUS..............................................49
8.1 Amendments, Etc........................................49
8.2 Notices................................................49
8.3 No Waiver By Conduct; Remedies Cumulative..............50
8.4 Reliance on and Survival of Various Provisions.........50
8.5 Expenses; Indemnification..............................50
8.6 Successors and Assigns.................................51
8.7 Counterparts...........................................54
8.8 Governing Law..........................................54
8.9 Table of Contents and Headings.........................54
8.10 Construction of Certain Provisions....................54
8.11 Integration and Severability..........................55
8.12 Independence of Covenants.............................55
8.13 Interest Rate Limitation..............................55
8.14 WAIVER OF JURY TRIAL..................................55
EXHIBITS
Exhibit A Revolving Credit Note
Exhibit B Request for Borrowing
Exhibit C Request for Continuation or Conversion of Borrowing
Exhibit D Guaranty Agreement
Exhibit E-1, E-2 & E-3 Pledge Agreements
Exhibit F Note Pledge Agreement
Exhibit G Tax Sharing Agreement
Exhibit H Subrogation and Contribution Agreement
Exhibit I Investment Policies
Exhibit J Assignment and Acceptance
SCHEDULES
Schedule 4.4 Subsidiaries
Schedule 4.5 Litigation
Schedule 5.2(e) Investments
Schedule 5.2(1) Indebtedness
Schedule 5.2(m) Liens
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THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 6, 1997
(this "Agreement"), is by and among ACCEPTANCE INSURANCE COMPANIES INC., a
Delaware corporation (the "Company"), the banks set forth on the signature pages
hereof and each bank that otherwise becomes a party hereto pursuant to Section
8.6 (collectively the "Banks" and individually a "Bank"), THE FIRST NATIONAL
BANK OF CHICAGO, a national banking association, as agent for the Banks (in such
capacity, the "Agent"), and COMERICA BANK, a Michigan banking corporation, FIRST
NATIONAL BANK OF OMAHA, a national banking association, and FIRST BANK, N.A., a
national banking association, as co-agents (in such capacity, collectively the
"Co-Agents" and individually a "Co-Agent").
INTRODUCTION
The Company, certain Banks (collectively the "Original Banks" and
individually an "Original Bank"), NBD Bank, a Michigan banking corporation, as
agent (in such capacity, the "Original Agent") for the Original Banks, and the
Co-Agents have entered into the Credit Agreement, dated as of July 26, 1995 (as
amended or modified from time to time, the "Original Credit Agreement"),
pursuant to which the Original Banks provided to the Company (i) a three year
revolving credit facility in the principal amount of $75,000,000 and (iii) a
364-day line of credit facility in the principal amount of $15,000,000, in order
to provide funds for the Company's general corporate purposes. The Company now
desires that such credit facilities be combined into one five-year revolving
credit facility in the principal amount of $100,000,000, and in connection
therewith the parties hereto desire to amend and restate the Original Credit
Agreement on the terms and conditions herein set forth.
In consideration of the premises and of the mutual agreements herein
contained, the parties hereto hereby amend and restate the Original Credit
Agreement, and otherwise agree, as follows:
ARTICLE I.
DEFINITIONS
1.1 Certain Definitions. As used herein and in the Exhibits and
Schedules hereto, the following terms shall have the following respective
meanings:
"Adjusted Debt Service" shall mean, as of the last day of any fiscal
quarter of the Company, the sum of (a) Interest Expense for the period of four
fiscal quarters of the Company then ended, plus (b) Distributions on Trust
Preferred Securities for the period of four fiscal quarters of the Company then
ended, plus (c) the amount equal to all payments of principal, including,
without limitation, all payments in connection with reductions of the
Commitments required under Section 2.2, mahlring or payable during the next
succeeding four fiscal quarters of the Company on Indebtedness of the Company
and its Subsidiaries for borrowed money, including, without limitation, all such
Indebtedness under this Agreement and the Notes, determined for the Company and
its Subsidiaries on a consolidated basis in accordance with
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Generally Accepted Accounting Principles, but excluding the payment in
connection with the final scheduled reduction of the Commitments on the
Maturity Date.
"Affiliate", when used with respect to any person, shall mean
any other person which, directly or indirectly, controls or is controlled by or
is under common control with such person. For purposes of this definition
"control" (including the correlative meanings of the terms "controlled by" and
"under common control with"), with respect to any person, shall mean possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such person, whether through the ownership of voting
securities or by contract or otherwise.
"AIC" shall mean Acceptance Insurance Company, a Nebraska corporation.
"AIH" shall mean Acceptance Insurance Holdings Inc., a Nebraska
corporation.
"American Agrisurance/AGIC Agreement" shall mean that certain
Agreement, dated the 1st day of January, 1997, by and between American
Agrisurance, Inc. and American Growers Insurance Company, regarding services and
fees relative to the crop insurance business, copies of which have been provided
to the Banks.
"APFC" shall mean Acceptance Premium Finance Company, Inc., an Arizona
corporation.
"APFC Debt Guaranty" shall mean the Second Amended and Restated
Guaranty Agreement, dated as of January 17, 1997, made by the Company in favor
of First Chicago, as agent, relating to certain Indebtedness of APFC, as such
guaranty may be amended, supplemented, extended, restated or otherwise modified
from time to time.
"Applicable Commitment Fee Rate" shall mean, for purposes of
determining the commitment fee payable in arrears for any calendar quarter (the
"Application Quarter"), the "Applicable Commitment Fee Rate" per annum
determined in accordance with the chart below based upon the ratio of Funded
Debt to Total Capitalization (the "Relevant Ratio") as of the end of the second
to last fiscal quarter of the Company that started prior to the Application
Quarter:
Ratio of Funded
Debt to Total Applicable
Capitalization Commitment Fee Rate
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Equal to or greater
than 0.30 to 1.00 0.375%
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Equal to or greater
than 0.25 to 1.00
but less than 0.30
to 1.00 0.32%
Equal to or greater
than 0.20 to 1.00
but less than 0.25
to 1.00 0.25%
Equal to or greater
than 0.15 to 1.00
but less than 0.20
to 1.00 0.175%
Equal to or greater
than 0.10 to 1.00
but less than 0.15
to 1.00 0.15%
Less than 0.10 to 1.00 0.125%
Each change in the Applicable Commitment Fee Rate in accordance with this
definition shall become effective for each Application Quarter on the first day
of each such Application Quarter. Notwithstanding anything in this Agreement to
the contrary, and without limiting any of the other rights of the Agent and the
Banks under this Agreement, if the Company shall have failed to deliver to the
Agent the certificate of the chief financial officer of the Company as required
under Section 5.1(d)(ii) or (iii) for any fiscal quarter of the Company prior to
the last Business Day of the second calendar quarter immediately following such
fiscal quarter, then, until such time as the Company shall have delivered such
certificate to the Agent, the "Applicable Commitment Fee Rate" for such second
following calendar quarter shall be determined based upon the assumption that
the Relevant Ratio as of the end of such preceding fiscal quarter was equal to
or greater than 0.30 to 1.00, and upon delivery of such certificate for such
preceding fiscal quarter, the Applicable Commitment Fee Rate shall be adjusted
(if necessary) in accordance with this definition and the Relevant Ratio,
subject to the other rights of the Agent and the Banks under this Agreement.
"Applicable Margin" shall mean, for purposes of determining the
Eurodollar Rate applicable to Eurodollar Rate Loans outstanding during any
calendar quarter (the "Application Quarter"), the "Applicable Margin" determined
in accordance with the chart below based upon the ratio of Funded Debt to Total
Capitalization (the "Relevant Ratio") as of the end of the second to last fiscal
quarter of the Company that started prior to the Application Quarter:
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Ratio of Funded
Debt to Total
Capitalization Applicable Margin
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Equal to or greater
than 0.30 to 1.00 1.25%
Equal to or greater
than 0.25 to 1.00
but less than 0.30
to 1.00 1.00%
Equal to or greater
than 0.20 to 1.00
but less than 0.25
to 1.00 0.875%
Equal to or greater
than 0.15 to 1.00
but less than 0.20
to 1.00 0.75%
Equal to or greater
than 0.10 to 1.00
but less than 0.15
to 1.00 0.625%
Less than 0.10 to
1.00 0.50%
Each change in the Applicable Margin in accordance with this definition shall
become effective on the first day of each Application Quarter. Notwithstanding
anything in this Agreement to the contrary, and without limiting any of the
other rights of the Agent and the Banks under this Agreement, if the Company
shall have failed to deliver to the Agent the certificate of the chief financial
officer of the Company as required under Section 5.1(d)(ii) or (iii) for any
fiscal quarter of the Company prior to the first day of the second calendar
quarter immediately following such fiscal quarter, then, until such time as the
Company shall have delivered such certificate to the Agent, the "Applicable
Margin" for such second following calendar quarter shall be determined based
upon the assumption that the Relevant Ratio as of the end of such preceding
fiscal quarter was equal to or greater than 0.30 to 1.00, and upon delivery of
such certificate for such preceding fiscal quarter, the Applicable Margin shall
be adjusted (if necessary) in accordance with this definition and the Relevant
Ratio, subject to the other rights of the Agent and the Banks under this
Agreement. Any change in the Applicable Margin with respect to any Eurodollar
Rate Loan shall occur on the date determined in accordance with this definition
of "Applicable Margin", regardless of the fact that such date may occur during
the Eurodollar Interest Period with respect
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to such Eurodollar Rate Loan and that such date may not be the last day of such
Eurodollar Interest Period. In accordance with this definition, the Applicable
Margin as of the Effective Date is 0.875%.
"Assignment and Acceptance" shall have the meaning ascribed thereto in
Section 8.6.
"Augmented Cash Flow" shall mean, for any period, the sum, without
double counting, of (a) Cash and Cash Equivalents of the Company as of the end
of such period, plus (b) the interest income of the Company for such period,
plus (c) Net Tax Sharing Payments for such period, plus (d) Dividends Received
or Receivable for such period, minus (e) all expenses of the Company on a
nonconsolidated basis for such period.
"Borrowing" shall mean the aggregation of Loans of the Banks to be
made to the Company, or continuations and conversions of any Loans, made
pursuant to Article II on a single date and, in the case of any Eurodollar Rate
Loans, for a single Interest Period, which Borrowings may be classified for
purposes of this Agreement by reference to the type of Loans comprising the
related Borrowing, e.g., a "Eurodollar Rate Borrowing" is a Borrowing comprised
of Eurodollar Rate Loans and a "Floating Rate Borrowing" is a Borrowing
comprised of "Floating Rate Loans."
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which the Agent is not open to the public for carrying on substantially
all of its banking functions in Chicago, Illinois.
"Capital Expenditures" shall mean, with respect to any period, the
Dollar amount of all gross expenditures (including the capitalized portion of
obligations for such period under Capital Leases) made for fixed assets, real
property, plant and equipment and all renewals thereof and improvements and
replacements thereto (but not repairs thereof) and all other expenditures made
or committed to be made during such period that are required to be capitalized
in accordance with Generally Accepted Accounting Principles.
"Capital Lease" of any person shall mean any lease which, in
accordance with generally accepted accounting principles, is or should be
capitalized on the books of such person.
"Cash and Cash Equivalents" shall mean, as of any date, (a) cash that
is then owned by the Company and (b) any of the following then owned by the
Company: (i) commercial paper of any United States issuer having a rating of P-1
(or the equivalent thereof) or higher then given by ▇▇▇▇▇'▇ Investors Service,
Inc. or A-1 (or the equivalent thereof) or higher then given by Standard &
Poor's Ratings Group, (ii) direct obligations of, and obligations fully
guaranteed by, the United States of America, and (iii) certificates of deposit
of any commercial bank that is a member of the Federal Reserve System and that
has capital, surplus and undivided profits (as shown on its most recently
published statement of condition) aggregating not less than $100,000,000,
provided, that each of the foregoing has a maturity date not later than 180 days
after the date of acquisition thereof by the Company.
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"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) of twenty percent (20%) or more of the outstanding shares
of voting stock of the Company, or (b) during any period of twenty-five (25)
consecutive calendar months, commencing on the date of this Agreement, the
ceasing of those individuals (the "Continuing Directors") who (i) were directors
of the Company on the first day of each such period or (ii) subsequently became
directors of the Company 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 the Company, to constitute a
majority of the board of directors of the Company
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations thereunder.
"Commitment" shall mean, with respect to any Bank, the commitment of
such Bank to make Loans pursuant to Section 2.1, in amounts not exceeding in
aggregate principal amount outstanding at any time the "Commitment Amount" for
such Bank set forth next to the name of such Bank in the signature pages hereof
(or, with respect to any Bank that becomes a party hereto pursuant to Section
8.6, set forth in such Bank's Assignment and Acceptance), as such amount may be
reduced from time to time pursuant to Section 2.2.
"Consolidated" or "consolidated" shall mean, when used with reference
to any financial term in this Agreement, the aggregate for two or more persons
of the amounts signified by such term for all such persons determined on a
consolidated basis in accordance with generally accepted accounting principles.
"Consolidated Net Worth" shall mean, as of any date, the total assets
of the Company and its Subsidiaries, determined on a consolidated basis in
accordance with Generally Accepted Accounting Principles, minus the total
liabilities of the Company and its Subsidiaries determined on a consolidated
basis in accordance with Generally Accepted Accounting Principles.
"Contingent Liabilities" of any person shall mean, as of any date, all
obligations of others for which such person is contingently liable, as
guarantor, surety, accommodation party, partner or in any other capacity, or in
respect of which obligations such person assures a creditor against loss or
agrees to take any action to prevent any such loss (other than endorsements of
negotiable instruments for collection in the ordinary course of business),
including without limitation all reimbursement obligations of such person in
respect of any letters of credit, surety bonds or similar obligations and all
obligations of such person to advance , funds to, or to purchase assets,
property or services from, any other person in order to maintain the financial
condition of such other person.
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"Corporate Base Rate" shall mean a rate per annum equal to the
corporate base rate of interest announced by First Chicago from time to time,
changing when and as said corporate base rate changes.
"Cumulative Net Income" of any person shall mean, as of any date, the
net income (after deduction for income and other taxes of such person, or its
shareholders in the case of a corporation that has elected to be taxed as a
Subchapter S corporation under the Code, determined by reference to income or
profits of such person) for the period commencing January 1, 1997 through the
end of the most recently completed fiscal quarter of such person (but without
reduction for any net loss incurred for any fiscal quarter during such period),
all as determined in accordance with Generally Accepted Accounting Principles
"Default" shall mean any event or condition which might become an
Event of Default with notice or lapse of time or both.
"Distributions on Trust Preferred Securities" shall mean, for any
period (without duplication with respect to any other period), scheduled
distributions paid, payable or accrued during such period by any Subsidiary
Business Trust in respect of its Trust Preferred Securities.
"Dividends Received or Receivable" shall mean, for any period, all
cash dividends and other cash payments and distributions in respect of the
capital stock of the Guarantors and any other direct Subsidiary of the Company
from time to time, that were paid, or were authorized and otherwise available to
be paid, to the Company during such period.
"Dollars" and "$" shall mean the lawful money of the United States of
America.
"Effective Date" shall mean the effective date specified in the final
paragraph of this Agreement.
"Environmental Laws" at any date shall mean all provisions of law,
statutes, ordinances, rules, regulations, judgments, writs, injunctions,
decrees, orders, awards and standards promulgated by the government of the
United States of America or any foreign government or by any state, province,
municipality or other political subdivision thereof or therein, or by any court,
agency, instrumentality, regulatory authority or commission of any of the
foregoing concerning the protection of, or regulating the discharge of
substances into, the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations thereunder.
"ERISA Affiliate"" shall mean, with respect to any person, any trade
or business (whether or not incorporated) which, together with such person or
any Subsidiary of such person, would be treated as a single employer under
Section 414 of the Code.
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"Eurodollar Business Day" shall mean, with respect to any Eurodollar
Rate Loan, a day which is both a Business Day and a day on which dealings in
Dollar deposits are carried out in the London interbank market.
"Eurodollar Interest Period" shall mean, with respect to any
Eurodollar Rate Loan, the period commencing on the day such Eurodollar Rate Loan
is made or converted to a Eurodollar Rate Loan and ending on the day which is
one, two, three, six or twelve months thereafter, as the Company may elect under
Section 2.7, and each subsequent period commencing on the last day of the
immediately preceding Eurodollar Interest Period and ending on the day which is
one, two, three, six or twelve months thereafter, as the Company may elect under
Section 2.7, provided, however, that (a) any Eurodollar Interest Period which
commences on the last Eurodollar Business Day of a calendar month (or on any day
for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Eurodollar Business Day of the
appropriate subsequent calendar month, (b) each Eurodollar Interest Period which
would otherwise end on a day which is not a Eurodollar Business Day shall end on
the next succeeding Eurodollar Business Day or, if such next succeeding
Eurodollar Business Day falls in the next succeeding calendar month, on the next
preceding Eurodollar Business Day, and (c) no Eurodollar Interest Period which
would end after the Termination Date shall be permitted.
"Eurodollar Rate" shall mean, with respect to any Eurodollar Rate Loan
and the related Eurodollar Interest Period, the per annum rate that is equal to
the sum of:
(a) the Applicable Margin, plus
(b) the rate per annum obtained by dividing (i) the per annum rate of
interest at which First Chicago offers to place deposits in Dollars,
for such Eurodollar Interest Period and in an aggregate amount
comparable to the amount of such Eurodollar Rate Loan to be made by
First Chicago in its capacity as a Bank hereunder, with other prime
banks in the London interbank market at approximately 11:00 a.m.
London time on the second Eurodollar Business Day prior to the first
day of such Eurodollar Interest Period by (ii) an amount equal to one
minus the stated maximum rate (expressed as a decimal) of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) that are specified on the
first day of such Eurodollar Interest Period by the Board of Governors
of the Federal Reserve System (or any successor agency thereto) for
determining the maximum reserve requirement with respect to
eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of such Board) maintained by a member
bank of such System;
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all as conclusively determined by the Agent, such sum to be rounded
up, if necessary, to the nearest whole multiple of one one-hundredth of one
percent (1/100 of 1%).
"Eurodollar Rate Loan" shall mean any Loan which bears interest at the
Eurodollar Rate.
"Event of Default" shall mean any of the events or conditions
described in Section 6.1.
"Federal Funds Effective Rate" shall mean, for any day, an interest
rate per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds broker on such day, as published for such day (or, if such day is
not a Business Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations at approximately 10:00 a.m.
Chicago time on such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by the Agent in its sole
discretion.
"First Chicago" shall mean The First National Bank of Chicago, in its
individual capacity, and its successors.
"Floating Rate" shall mean the per annum rate equal to the greater of
(a) the Corporate Base Rate in effect from time to time, and (b) the sum of one
percent (1%) per annum plus the Federal Funds Effective Rate in effect from time
to time; which Floating Rate shall change simultaneously with any change in such
Corporate Base Rate or Federal Funds Effective Rate, as the case may be.
"Floating Rate Loan" shall mean any Loan which bears interest at the
Floating Rate.
"Funded Debt" shall mean, as of any date, the sum of (a) all
Indebtedness of the Company and its Subsidiaries, determined on a consolidated
basis in accordance with Generally Accepted Accounting Principles, including,
without limitation, the aggregate outstanding principal amount of the Loans and
the obligations of the Company and its Subsidiaries under Capital Leases, but
excluding Subordinated Debt, plus (b) 50% of the aggregate outstanding principal
amount of all Indebtedness of APFC as of such date with respect to which the
Company has any Contingent Liability; provided, however, that for purposes of
determining the Applicable Commitment Fee Rate and the Applicable Margin from
time to time, and only such purposes, the Indebtedness of APFC described in the
foregoing clause (b) shall be excluded from Funded Debt.
"Generally Accepted Accounting Principles" shall mean generally
accepted accounting principles applied on a basis consistent with that reflected
in the financial statements referred to in Section 4.6.
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"Guarantors" shall mean AIH and TRG; and "Guarantor" shall mean any
one of such Guarantors.
"Guaranty" shall mean the Guaranty Agreement entered into by the
Guarantors for the benefit of the Agent and the Banks in substantially the form
of Exhibit D hereto, as amended or modified from time to time.
"Indebtedness" of any person shall mean, as of any date, (a) all
obligations of such person for borrowed money, (b) all obligations of such
person as lessee under any Capital Lease, (c) all obligations which are secured
by any Lien existing on any asset or property of such person whether or not the
obligation secured thereby shall have been assumed by such person, (d) all
obligations of such person for the unpaid purchase price for goods, property or
services acquired by such person, except for trade accounts payable arising in
the ordinary course of business that are not past due, (e) all obligations of
such person to purchase goods, property or services where payment therefor is
required regardless of whether delivery of such goods or property or the
performance of such services is ever made or tendered (generally referred to as
"take or pay contracts"), (f) all liabilities of such person in respect of
Unfunded Benefit Liabilities under any Plan of such person or of any ERISA
Affiliate, (g) Rate Hedging Obligations, (h) all obligations of such person
evidenced by notes, acceptances, or other instruments, and (i) all obligations
of others similar in character to those described in clauses (a) through (h) of
this definition for which such person is contingently liable, as guarantor,
surety, accommodation party, partner or in any other capacity, or in respect of
which obligations such person assures a creditor against loss or agrees to take
any action to prevent any such loss (other than endorsements of negotiable
instruments for collection in the ordinary course of business), including
without limitation all reimbursement obligations of such person in respect of
letters of credit, surety bonds or similar obligations and all obligations of
such person to advance funds to, or to purchase assets, property or services
from, any other person in order to maintain the financial condition of such
other person.
"Insurance Subsidiaries" shall mean AIC, RIC, Acceptance Indemnity
Insurance Company, a Nebraska corporation, Phoenix Indemnity Insurance Company,
an Arizona corporation, American Growers Insurance Company, a Nebraska
corporation, Acceptance Casualty Insurance Company, a Texas Corporation, and any
other direct or indirect Subsidiary of the Company now owned or hereafter
acquired that writes insurance; and "Insurance Subsidiary" shall mean any one of
the Insurance Subsidiaries.
"Interest Expense" shall mean, for any period (without duplication
with respect to any other period), all interest paid, payable or accrued during
such period by the Company and its Subsidiaries on Indebtedness of the Company
and its Subsidiaries, including, without limitation, all Indebtedness under this
Agreement and the Notes, determined on a consolidated basis in accordance with
Generally Accepted Accounting Principles.
"Interest Payment Date" shall mean (a) with respect to any Eurodollar
Rate Loan, the last day of each Interest Period with respect to such Eurodollar
Rate Loan and, in the case of any Interest Period exceeding three months, those
days that occur during such Interest Period at
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intervals of three months after the first day of such Interest Period, and (b)
in all other cases, the last Business Day of each March, June, September and
December occurring after the date hereof, commencing with the first such
Business Day occurring after the date of this Agreement.
"Interest Period" shall mean any Eurodollar Interest Period.
"Investment" of a Person shall mean 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), deposit account or contribution of capital by such Person to any other
Person or any investment in, or purchase or other acquisition of, the stock,
partnership or other ownership interests, notes, debentures or other securities
of any other Person made by such Person.
"Lien" shall mean any pledge, assignment, hypothecation, mortgage,
security interest, deposit arrangement, option, conditional sale or title
retaining contract, sale and leaseback transaction, financing statement filing,
lessor's or lessee's interest under any lease, subordination of any claim or
right, or any other type of lien, charge, encumbrance, preferential arrangement
or other claim or right.
"Loan" shall mean any loan under Section 2.4 evidenced by a Note and
made pursuant to Section 2.1. Any such Loan or portion thereof may also be
denominated as a Floating Rate Loan or a Eurodollar Rate Loan and such Loans are
referred to herein as "types" of Loans.
"Material Adverse Effect" shall mean a material adverse effect on (i)
the business, Property, condition (financial or otherwise), results of
operations, or prospects of the Company and its Subsidiaries taken as a whole,
(ii) the ability of the Company or any Guarantor to perform its obligations
under this Agreement, the Notes and the Security Documents, or (iii) the
legality, validity or enforceability of this Agreement, any Note or any Security
Document or the rights or remedies of the Agent or the Banks thereunder.
"Maturity Date" shall mean May 31, 2002.
"Multiemployer Plan" shall mean any "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA or Section 414(f) of the Code.
"NAIC" shall mean the National Association of Insurance Commissioners
and any successor thereto.
"Net Tax Sharing Payments" shall mean, with respect to any period, the
excess, if any, of the aggregate amount of payments received by the Company from
its Subsidiaries under the Tax Sharing Agreement during such period over the
aggregate amount of payments made by the Company to the Internal Revenue Service
during such period.
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"Net Worth" of any person shall mean, as of any date, the amount of
any capital stock, paid in capital and similar equity accounts plus (or minus in
the case of a deficit) the capital surplus and retained earnings of such person
and the amount of any foreign currency translation adjustment account shown as a
capital account of such person.
"Net Written Premiums" shall mean, with respect to any Subsidiary of
the Company, such Subsidiary's gross written premiums less (a) returned premiums
and (b) ceded reinsurance costs.
"Non-Material Subsidiaries" shall mean The Major Group, Inc., a
Florida corporation, and its subsidiaries formerly engaged in the real estate
development business, so long as The Major Group, Inc. and each of such
subsidiaries is not operating, has no assets and has no liabilities.
"Note" shall mean any promissory note of the Company evidencing the
Loans, in substantially the form annexed hereto as Exhibit A, as amended or
modified from time to time and together with any promissory note or notes issued
in exchange or replacement therefor.
"Note Pledge Agreement" shall mean the Note Pledge Agreement entered
into by the Company for the benefit of the Banks and the Agent pursuant to this
Agreement in substantially the form of Exhibit F hereto, as amended or modified
from time to time.
"Overdue Rate" shall mean (a) in respect of principal of Floating Rate
Loans, a rate per annum that is equal to the sum of three percent (3%) per annum
plus the Floating Rate, (b) in respect of principal of Eurodollar Rate Loans, a
rate per annum that is equal to the sum of three percent (3%) per annum plus the
per annum rate in effect thereon until the end of the then current Interest
Period for such Loan and, thereafter, a rate per annum that is equal to the sum
of three percent (3%) per annum plus the Floating Rate, and (c) in respect of
other amounts payable by the Company hereunder (other than interest), a per
annum rate that is equal to the sum of three percent (3%) per annum plus the
Floating Rate.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Permitted Liens" shall mean Liens permitted by Section 5.2(m) hereof
"Person" or "person" shall include an individual, a corporation, an
association, a partnership, a business trust or other trust or estate, a joint
stock company, an unincorporated organization, a joint venture, a trade or
business (whether or not incorporated), a government (foreign or domestic) and
any agency or political subdivision thereof, or any other entity.
"Plan" shall mean, with respect to any person, any pension plan
(including a Multiemployer Plan) subject to Title IV of ERISA or to the minimum
funding standards of Section 412 of the Code which has been established or
maintained by such person, any Subsidiary of such person or any ERISA Affiliate,
or by any other person if such person, any
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Subsidiary of such person or any ERISA Affiliate could have liability with
respect to such pension plan.
"Pledge Agreements" shall mean the Pledge Agreements entered into by
the Company and each of the Guarantors for the benefit of the Banks and the
Agent pursuant to this Agreement in substantially the form of Exhibit E-1, E-2
and E-3 hereto, respectively, as amended or modified from time to time; and
"Pledge Agreement" shall mean any one of such Pledge Agreements.
"Pledged Subsidiaries" shall mean the Guarantors, AIC and RIC, and any
other Subsidiaries of the Company from time to time the capital stock of which
is required to be pledged to the Agent for the benefit of the Banks pursuant to
Section 5.1(f).
"Pledgors" shall mean each of the Company and the Guarantors; and
"Pledgor" shall mean any one of the Pledgors.
"Prohibited Transaction" shall mean any transaction involving any Plan
which is proscribed by Section 406 of ERISA or Section 4975 of the Code.
"Property" of a person shall mean any and all property, whether real,
personal, tangible, intangible, or mixed, of such person, or other assets owned,
leased or operated by such person.
"Rate Hedging Agreement" shall mean any 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 or swap 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 shall mean 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 (i) any
and all Rate Hedging Agreements, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Hedging Agreements.
"Reportable Event" shall mean a reportable event as described in
Section 4043(b) of ERISA including those events as to which the thirty (30) day
notice period is waived under Part 2615 of the regulations promulgated by the
PBGC under ERISA.
"Required Banks" shall mean, at any time, Banks holding not less than
(i) 66 2/3% of the aggregate principal amount of the Loans then outstanding or
(ii) 66 2/3% of the Commitments if no Loans are then outstanding.
"RIC" shall mean Redland Insurance Company, an Iowa corporation.
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"SAP" shall mean statutory accounting principles formulated by the
NAIC and permitted under the laws of Nebraska or, with respect to any Insurance
Subsidiary not incorporated under the laws of Nebraska, under the laws of such
Subsidiary's place of incorporation.
"Security Documents" shall mean, collectively, the Guaranty, the
Pledge Agreements, the Note Pledge Agreement and all other related agreements
and documents, including assignments separate from certificates, stock powers
and similar documents, delivered pursuant to this Agreement or otherwise entered
into by any person to secure the Loans.
"Statutory Surplus" of any person shall mean the statutory surplus of
such person computed in the manner required for page 3, column 1, line 25 of its
annual statement of condition and affairs prepared in accordance with SAP.
"Subordinated Debt" of any-person shall mean, as of any date, that
Indebtedness of such person for borrowed money which is expressly subordinate
and junior in right and priority of payment to the Loans and other Indebtedness
of such person to the Banks and the Agent in manner and by agreement
satisfactory in form and substance to the Required Banks.
"Subsidiary" of any person shall mean any other person (whether now
existing or hereafter organized or acquired) in which (other than directors
qualifying shares required by law) at least a majority of the securities or
other ownership interests of each class having ordinary voting power or
analogous right (other than securities or other ownership interests which have
such power or right only by reason of the happening of a contingency), at the
time as of which any determination is being made, are owned, beneficially and of
record, by such person or by one or more of the other Subsidiaries of such
person or by any combination thereof; provided that the terms "Subsidiary" and
"Subsidiaries" shall not include the Non-Material Subsidiaries.
"Subsidiary Business Trust" shall mean any statutory business trust,
all the common beneficial interests in the assets of which are owned by the
Company, and which is organized solely for the purpose of issuing Trust
Preferred Securities the proceeds of which are borrowed by the Company from such
trust in the form of Subordinated Debt with respect to which the interest rate
and payment schedule matches the rate and schedule applicable to distributions
on such Trust Preferred Securities.
"Surplus Note" shall mean any instrument evidencing Indebtedness of
any Insurance Subsidiary to the Company, the form, amount and issuance of which,
the payment of and rate of interest on which, and any other aspects of which,
have been approved, to the extent required or otherwise provided in the
applicable statutes and regulations, at the time of issuance thereof by such
Insurance Subsidiary's domiciliary state insurance commissioner or other
applicable authority, and with respect to which all other then applicable
required regulatory approvals have been obtained, including, without limitation,
any such instrument designated as a "surplus note", "certificate of
contribution", "surplus debenture" or "capital note", as prescribed by such
jurisdiction.
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"Tax Sharing Agreement" shall mean the agreement dated April 12, 1990
among the Company and its Subsidiaries relating to the allocation of income
taxes among them, as such agreement is in effect on the Effective Date, a copy
of which is attached hereto as Exhibit G.
"Termination Date" shall mean the earlier to occur of (a) the Maturity
Date and (b) the date on which the Commitments shall be terminated pursuant to
Section 2.2 or 6.2.
"Total Capitalization" shall mean, as of any date, the sum of (a)
Consolidated Net Worth, plus (b) Subordinated Debt of the Company (other than
Subordinated Debt owing to any Subsidiary Business Trust), plus (c) Funded Debt.
"TRG" shall mean The Redland Group, Inc., an Iowa corporation.
"Trust Preferred Securities" shall mean securities representing
preferred beneficial interests in the assets of any Subsidiary Business Trust.
"Unfunded Benefit Liabilities" shall mean, with respect to any Plan as
of any date, the amount of the unfunded benefit liabilities determined in
accordance with Section 4001(a)(18) of ERISA.
1.2 Other Definitions; Rules of Construction. As used herein, the
terms "Agent", "Bank", "Banks", "Company", "Original Agent", "Original Bank",
"Original Banks", "Original Credit Agreement" and "this Agreement" shall have
the respective meanings ascribed thereto in the introductory paragraph of this
Agreement. Such terms, together with the other terms defined in Section 1.1,
shall include both the singular and the plural forms thereof and shall be
construed accordingly. All computations required hereunder and all financial
terms used herein shall be made or construed in accordance with Generally
Accepted Accounting Principles unless such principles are inconsistent with the
express requirements of this Agreement; provided that, if the Company notifies
the Agent that the Company wishes to amend any covenant in Article V to
eliminate the effect of any change in Generally Accepted Accounting Principles
in the operation of such covenant (or if the Agent notifies the Company that the
Required Banks wish to amend Article V for such purpose), then the Company's
compliance with such covenant shall be determined on the basis of Generally
Accepted Accounting Principles in effect immediately before the relevant change
in Generally Accepted Accounting Principles became effective, until either such
notice is withdrawn or such covenant is amended in a manner satisfactory to the
Company and the Required Banks. Use of the terms "herein", "hereof", and
"hereunder" shall be deemed references to this Agreement in its entirety and not
to the Section or clause in which such term appears. References to "Sections"
and "subsections" shall be to Sections and subsections, respectively, of this
Agreement unless otherwise specifically provided.
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ARTICLE II.
THE COMMITMENTS AND THE LOANS
2.1 Commitments of the Banks. Each Bank agrees, for itself only,
subject to the terms and conditions of this Agreement, to make Loans to the
Company, from time to time from and including the Effective Date to but
excluding the Termination Date, not to exceed in aggregate principal amount at
any time outstanding the amount of the Commitment of such Bank as of the date
any such Loan is made.
2.2 Termination and Reduction of Commitments.
(a) Optional Termination or Reduction. The Company shall have the
right to terminate or reduce the amount of the aggregate Commitments at any time
and from time to time at its option, provided that (i) the Company shall give
notice of such termination or reduction to the Agent (with sufficient executed
copies for each Bank) specifying the amount and effective date thereof, (ii)
each partial reduction of the aggregate Commitments shall be in a minimum amount
of $500,000 and in an integral multiple of $100,000, (iii) no such termination
or reduction shall be permitted with respect to any portion of the Commitments
as to which a request for a Loan pursuant to Section 2.4 is then pending and
(iv) the Commitments may not be terminated if any Loans are then outstanding and
may not be reduced below the principal amount of Loans then outstanding.
(b) Scheduled Commitment Reductions. The aggregate amount of the
Commitments shall automatically reduce on the dates, and in the respective
amount for each such date, in accordance with the following chart:
Date of Automatic Reduction Amount
--------------------------- ------
March 31, 1999 $2,500,000
June 30, 1999 $2,500,000
September 30, 1999 $2,500,000
December 31, 1999 $2,500,000
March 31, 2000 $2,500,000
June 30,2000 $2,500,000
September 30, 2000 $2,500,000
December 31, 2000 $2,500,000
March 31, 2001 $3,750,000
June 30, 2001 $3,750,000
September 30,2001 $3,750,000
December 31, 2001 $3,750,000
March 31, 2002 $3,750,000
Maturity Date Remaining amount
of Commitments
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Each such reduction of the Commitments shall automatically occur in accordance
with this Section 2.2(c) on each such date, regardless of the aggregate amount
of the Commitments on each such date immediately prior to such reduction.
Notwithstanding anything herein to the contrary, each mandatory reduction of the
Commitments under Section 2.2(c) below shall decrease the amount of the
scheduled reductions of the Commitments under this Section 2.2(b) as follows:
(i) 50% of each such mandatory reduction will decrease the amount of each of the
scheduled quarterly reductions (including the final scheduled reduction on the
Maturity Date) in inverse order of maturity and (b) 50% of each such mandatory
reduction will decrease the amount of each of the remaining scheduled reductions
(excluding the final scheduled reduction on the Maturity Date) on a ratable
basis.
(c) Mandatory Commitment Reductions. Immediately upon the sale or
issuance by the Company or any of its Subsidiaries of any debt security or
capital stock, securities exchangeable for or convertible into capital stock,
other equity securities, warrants, rights or other options to purchase or
otherwise acquire capital stock or other securities, the aggregate amount of the
Commitments shall automatically reduce by the amount equal to 40% of the net
proceeds thereof received by the Company or any of its Subsidiaries; provided
that the requirements of this Section 2.2(e) shall not apply to the net proceeds
in an aggregate amount up to $1,000,000 received by the Company from time to
time after the Effective Date from the issuance and sale of stock pursuant to
its employee stock purchase plan.
(d) Proportionate Reductions; No Reinstatement. Each reduction of
the aggregate amount of the Commitments pursuant to this Section 2.2 shall
reduce the Commitments of all of the Banks proportionately in accordance with
the respective Commitment Amount for each such Bank set forth in the signature
pages hereof next of the name of each such Bank (or as set forth in such Bank's
Assignment and Acceptance, as applicable). The Commitments or any portion
thereof terminated or reduced pursuant to this Section 2.2 may not be
reinstated.
2.3 Fees.
(a) Commitment Fee. The Company agrees to pay to each Bank a
commitment fee on the daily average unused amount of such Bank's Commitment, for
each calendar quarter during the period from the Effective Date to but excluding
the Termination Date, at a rate per annum equal to the Applicable Commitment Fee
Rate for such calendar quarter. Accrued commitment fees shall be payable
quarterly in arrears on the last Business Day of each June, September, December
and March, commencing on the first such day occurring after the date hereof, and
on the Termination Date.
(b) Closing Fee. The Company further agrees to pay to each Bank a
closing fee for this Agreement in the amount equal to .05% of the amount of each
such Bank's Commitment. Such closing fees shall be payable on or prior to the
Effective Date.
(c) Agent's Fees. The Company further agrees to pay to the Agent
such fees for arranging this Agreement and agency fees for its services as Agent
under this Agreement
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in such amounts and on such schedule as may from time to time be agreed upon by
the Company and the Agent.
2.4 Disbursement of Loans.
(a) The Company shall give the Agent notice of each requested
Borrowing in substantially the form of Exhibit B hereto (with sufficient
executed copies for each Bank) not later than 10:00 a.m. Chicago time (i) three
Eurodollar Business Days prior to the date such Borrowing is requested to be
made if such Borrowing is to be made as a Eurodollar Rate Borrowing, and (ii) on
the date such Borrowing is requested to be made if such Borrowing is to be made
as a Floating Rate Borrowing, which notice shall specify whether a Eurodollar
Rate Borrowing or Floating Rate Borrowing is requested and, in the case of each
requested Eurodollar Rate Borrowing, the Interest Period to be initially
applicable to such Borrowing. The Agent shall as soon as practicable provide
notice of such requested Borrowing to each Bank. The Company hereby directs and
authorizes the Agent to disburse the proceeds of the initial Borrowing hereunder
to the original Banks in amounts sufficient to repay all then existing
Indebtedness of the Company and its Subsidiaries to the Original Banks under the
Original Credit Agreement. The initial Borrowing hereunder shall be in an amount
at least sufficient to make such repayment to the Original Banks. Subject to the
terms and conditions of this Agreement, the remaining proceeds of the initial
Borrowing and the proceeds of each subsequent Borrowing shall be made available
to the Company by depositing the proceeds thereof, in immediately available
funds, in an account maintained and designated by the Company at the principal
office of the Agent.
(b) Each Bank, on the date any Borrowing is requested to be made,
shall make its pro rata share of such Borrowing available in immediately
available funds at the principal office of the Agent for disbursement to the
Company. Unless the Agent shall have received notice from any Bank prior to the
date such Borrowing is requested to be made under this Section 2.4 that such
Bank will not make available to the Agent such Bank's pro rata portion of such
Borrowing, the Agent may assume that such Bank has made such portion available
to the Agent on the date such Borrowing is requested to be made in accordance
with this Section 2.4. If and to the extent such Bank shall not have so made
such pro rata portion available to the Agent, the Agent may (but shall not be
obligated to) make such amount available to the Company, and such Bank and the
Company severally agree to pay to the Agent forthwith on demand such amount
together with interest thereon, for each day from the date such amount is made
available to the Company by the Agent until the date such amount is repaid to
the Agent, at a rate per annum equal to the interest rate applicable to such
Borrowing during such period. If such Bank shall pay such amount to the Agent
together with interest, such amount so paid shall constitute a Loan by such Bank
as a part of the related Borrowing for purposes of this Agreement. The failure
of any Bank to make its pro rata portion of any such Borrowing available to the
Agent shall not relieve any other Bank of its obligation to make available its
pro rata portion of such Borrowing on the date such Borrowing is requested to be
made, but no Bank shall be responsible for failure of any other Bank to make
such pro rata portion available to the Agent on the date of any such Borrowing.
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(c) All Loans made under this Section 2.4 shall be evidenced by
the Notes. All such Loans shall be due and payable and bear interest as provided
in Article III. Each Bank is hereby authorized by the Company to record on the
schedule attached to its Notes, or in its books and records, the date, and
amount and type of each Loan and the duration of the related Interest Period (if
applicable), the amount of each payment or prepayment of principal thereon, and
the other information provided for on such schedule, which schedule or books and
records, as the case may be, shall constitute prima facie evidence of the
information so recorded, provided, however, that failure of any Bank to record,
or any error in recording, any such information shall not relieve the Company of
its obligation to repay the outstanding principal amount of the Loans, all
accrued interest thereon and other amounts payable with respect thereto in
accordance with the terms of the Notes and this Agreement. Subject to the terms
and conditions of this Agreement, the Company may borrow Loans under this
Section 2.4, prepay Loans pursuant to Section 3.1 and reborrow Loans under this
Section 2.4.
2.5 Conditions for First Disbursement. The obligation of the Banks to
make Loans for the first Borrowing hereunder is subject to receipt by the Agent
of the following documents (in a sufficient quantity of originals for
distribution to all the Banks, which distribution the Agent or its counsel shall
make promptly after the Effective Date), and completion of the following
matters, in form and substance satisfactory to the Agent:
(a) Charter Documents. Certificates of recent date of the
appropriate authority or official of the Company's and each Guarantor's state of
incorporation (listing all charter documents of each such person on file in that
office if such listing is available) and certifying as to the good standing and
corporate existence of each such person together with copies of such charter
documents of each such person, certified as of a recent date by such authority
or of official and certified as true and correct as of the Effective Date by a
duly authorized of fleer of each such person;
(b) By-Laws and Corporate Authorizations. Copies of the by-laws
of each of the Company and the Guarantors, together with all authorizing
resolutions and evidence of other corporate action taken by each such person to
authorize the execution, delivery and performance by it of this Agreement, the
Notes and the Security Documents to which it is a party and the consummation by
it of the transactions contemplated hereby, certified as true and correct as of
the Effective Date by a duly authorized officer of each such person;
(c) Incumbency Certificate. A certificate of incumbency of each
of the Company and the Guarantors, containing, and attesting to the genuineness
of, the signatures of those officers authorized to act on behalf of each such
person in connection with this Agreement, the Notes and the Security Documents
to which it is a party and the consummation by it of the transactions
contemplated hereby, certified as true and correct as of the Effective Date by a
duly authorized officer of each such person;
(d) Notes. The Notes duly executed on behalf of the Company for
all the Banks;
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(e) Security Documents. The Guaranty duly executed on behalf of
the Guarantors, the Pledge Agreements duly executed on behalf of the Pledgors
and the Note Pledge Agreement duly executed on behalf of the Company, granting
to the Banks and the Agent the collateral intended to be provided pursuant to
Section 2. 10, together with the original certificates representing all shares
of stock subject to the Pledge Agreements and an equal number of assignments
separate from certificates executed in blank, and all original Surplus Notes
existing on the Effective Date, endorsed in blank;
(f) Legal Opinion. The favorable written opinion of ▇▇▇▇▇▇,
Guenzel, Davis, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, general counsel for the Company and the
Guarantors, with respect to each of the matters set forth in Article IV (other
than Sections 4.6, 4.7, 4.9, 4.10, 4.12, 4.13, 4.14 and 4.15), with respect to
all existing Surplus Notes as described in Section 2.6(c), and as to such other
matters as the Banks and the Agent may reasonably request;
(g) Consents. Approvals. Etc. Copies of all governmental and
nongovernmental consents, approvals, authorizations, declarations, registrations
or filings, if any, required on the part of the Company or any Guarantor in
connection with the execution, delivery and performance of this Agreement, the
Notes, the Security Documents or the transactions contemplated hereby or as a
condition to the legality, validity or enforceability of this Agreement, the
Notes or any of the Security Documents, certified as true and correct and in
full force and effect as of the Effective Date by a duly authorized officer of
the Company, or, if none is required, a certificate of such officer to that
effect;
(h) Fees. The payment in full, in immediately available funds, of
all fees required to be paid by the Company under this Agreement on or before
the Effective Date;
(i) Termination of Original Credit Agreement. The Original Credit
Agreement shall be terminated;
(j) Subrogation and Contribution Agreement. A subrogation and
contribution agreement substantially in the form of Exhibit H hereto by and
among, and duly executed on behalf of, the Company and the Guarantors;
(k) Pledged Subsidiary Good-Standing Certificates. Certificates
of recent date of the appropriate authority or official of each Pledged
Subsidiary's state of incorporation certifying as to the good standing and
corporate existence of each such Pledged Subsidiary;
(l) Adequacy of Reserves for 1996. A copy of an independent
actuarial report, in form and substance satisfactory to the Agent, as to the
adequacy of the reserves of the Insurance Subsidiaries for the 1996 calendar
year;
(m) Approval of American Agrisurance/AGIC Agreement. Evidence
satisfactory to the Agent of all necessary regulatory approval for the American
Agrisurance/AGIC Agreement; and
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(n) Other Documents and Matters. Such other documents, and the
completion of such other matters, as the Agent may reasonably request.
2.6 Further Conditions for Disbursement. The obligation of the Banks
to make Loans for any Borrowing (including the first Borrowing), or any
continuation or conversion under Section 2.7, is further subject to the
satisfaction of the following conditions precedent:
(a) The representations and warranties contained in Article IV
hereof and in the Security Documents shall be true and correct on and as of the
date such Borrowing is made (both before and after such Borrowing is made) as if
such representations and warranties were made on and as of such date;
(b) No Default or Event of Default shall exist or shall have
occurred and be continuing on the date such Borrowing is made (whether before or
after such Borrowing is made); and
(c) If any of the proceeds of such Borrowing will be used by the
Company to make any loan or other advance of any nature to any Insurance
Subsidiary, then, unless the Company shall have requested and received from the
Required Banks, in writing, a waiver of such conditions precedent, the Company
shall have caused such Insurance Subsidiary to issue to the Company one or more
Surplus Notes in an aggregate principal amount not less than the amount of such
loan or advance, and the Company shall have delivered to the Agent, in pledge
under the Note Pledge Agreement, such Surplus Note(s) endorsed in blank,
together with an opinion, rendered by counsel, and in form and substance,
satisfactory to the Agent, to the effect that each such instrument is a "Surplus
Note" as such term is defined in this Agreement and that each such Surplus Note
constitutes a legal, valid and binding obligation of such Insurance Subsidiary,
enforceable against such Insurance Subsidiary in accordance with its terms, and
with respect to such other matters in connection therewith as the Agent may
reasonably request.
The Company shall be deemed to have made a representation and warranty to the
Banks at the time of each Borrowing to the effects set forth in clauses (a) and
(b) of this Section 2.6. For purposes of this Section 2.6, the representations
and warranties contained in Section 4.6 shall be deemed made with respect to
both the financial statements referred to therein and the most recent financial
statements delivered pursuant to Section 5. l(d).
2.7 Subsequent Elections as to Borrowings. The Company may elect (a)
to continue a Eurodollar Rate Borrowing, or a portion thereof, as a Eurodollar
Rate Borrowing, or (b) to convert a Floating Rate Borrowing, or a portion
thereof, to a Eurodollar Rate Borrowing, or (c) to convert a Eurodollar Rate
Borrowing, or a portion thereof, to a Floating Rate Borrowing, in each case by
giving notice thereof to the Agent (with sufficient executed copies for each
Bank) in substantially the form of Exhibit C hereto not later than 12:00 noon
Chicago time three Eurodollar Business Days prior to the date any such
continuation of or conversion to a
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Eurodollar Rate Borrowing is to be effective and not later than 12:00 noon
Chicago time on the date such continuation or conversion is to be effective in
all other cases, provided that, if a continuation of a Borrowing as, or a
conversion of a Borrowing to, a Eurodollar Rate Borrowing is requested, such
notice shall also specify the Interest Period to be applicable thereto upon such
continuation or conversion. The Agent shall as soon as practicable provide
notice of such election to the Banks. If the Company shall not timely deliver
such a notice with respect to any outstanding Eurodollar Rate Borrowing, the
Company shall be deemed to have elected to convert such Borrowing to a Floating
Rate Borrowing on the last day of the then current Interest Period with respect
to such Borrowing.
2.8 Limitation of Requests and Elections. Notwithstanding any other
provision of this Agreement to the contrary, if, upon receiving a request for a
continuation of a Eurodollar Rate Borrowing as a Eurodollar Rate Borrowing, or a
request for conversion of a Floating Rate Borrowing to a Eurodollar Rate
Borrowing, (a) deposits in Dollars for periods comparable to the Interest Period
elected by the Company are not available to one or more of the Banks in the
London interbank market, (b) the Eurodollar Rate will not adequately and fairly
reflect the cost to any Bank of making, funding or maintaining the related
Eurodollar Rate Borrowing or (c) by reason of national or international
financial, political or economic conditions or by reason of any applicable law,
treaty or other international agreement, rule or regulation (whether domestic or
foreign) now or hereafter in effect, or the interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by any Bank with any guideline, request or
directive of such authority (whether or not having the force of law), including
without limitation exchange controls, it is impracticable, unlawful or
impossible for, or shall limit or impair the ability of, any Bank to make or
fund the relevant Borrowing or to continue such Borrowing as a Borrowing of the
then existing type or to convert a Borrowing to such a Borrowing, then the
Company shall not be entitled, so long as such circumstances continue, to
request a Borrowing of the affected type pursuant to Section 2.4 or a
continuation of or conversion to a Borrowing of the affected type pursuant to
Section 2.7. In the event that such circumstances no longer exist, the Banks
shall again consider requests for Borrowings of the affected type pursuant to
Section 2.4, and requests for continuations of and conversions to Borrowings of
the affected type pursuant to Section 2.7.
2.9 Minimum Amounts; Limitation on Number of Borrowings, Etc. Except
for (a) Borrowings which exhaust the entire remaining amount of the Commitments,
and (b) payments required pursuant to Section 3.1(c) or 3.7, each Borrowing and
each continuation or conversion pursuant to Section 2.7 and each prepayment
thereof shall be in a minimum amount of $2,500,000 and in an integral multiple
of $100,000.
2.10 Security and Collateral. To secure the payment when due of the
Notes and all other obligations of the Company under this Agreement to the Banks
and the Agent, the Guarantors shall execute and deliver to the Banks and the
Agent the Guaranty, the Pledgors shall execute and deliver to the Banks and the
Agent the Pledge Agreements pledging all capital stock of the Pledged
Subsidiaries, and the Company shall execute and deliver to the Banks and the
Agent the Note Pledge Agreement pledging all Surplus Notes.
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ARTICLE III.
PAYMENTS AND PREPAYMENTS OF BORROWINGS
3.1 Principal Payments and Prepayments.
(a) Unless earlier payment is required under this Agreement, the
Company shall pay to the Banks on the Termination Date the entire outstanding
principal amount of the Loans.
(b) The Company may at any time and from time to time prepay all
or a portion of the Borrowings, without premium or penalty, provided that (i)
the Company shall have given not less than two Business Days' notice thereof to
the Agent specifying the Loans or portion thereof to be so prepaid, and (ii)
prepayment of any Eurodollar Rate Loan, or any Loan as to which an election for
a continuation of or a conversion to a Eurodollar Rate Loan is pending pursuant
to Section 2.7, shall only be permitted if the Company shall have paid to the
Banks, together with such prepayment of principal, all accrued interest to the
date of payment on the Loans or portion thereof so prepaid and all amounts owing
to the Banks under Section 3.8 in connection with such prepayment. Upon the
giving of such notice, the aggregate principal amount of such Loans or portion
thereof so specified in such notice, together with such accrued interest and
other amounts, shall become due and payable on the specified prepayment date.
(c) Notwithstanding any other provision of this Agreement or the
Notes, immediately upon any reduction of the Commitments under Section 2.2, the
Company shall prepay the Loans in an amount sufficient that, after giving effect
to such prepayment, the aggregate outstanding principal amount of the Loans
shall not be greater than the aggregate amount of the Commitments as so reduced.
3.2 Interest Payments. The Company shall pay interest to the Banks on
the unpaid principal amount of each Loan, for the period commencing on the date
such Loan is made until such Loan is paid in full, on each Interest Payment Date
and at maturity (whether at stated maturity, by acceleration or otherwise), and
thereafter on demand, at the following rates per annum:
(a) During such periods that such Loan is a Floating Rate Loan,
the Floating Rate.
(b) During such periods that such Loan is a Eurodollar Rate Loan,
the Eurodollar Rate applicable to such Loan for each related Eurodollar Interest
Period.
Notwithstanding the foregoing paragraphs (a) and (b), if the Required Banks
shall so require at any time, the Company shall pay interest on demand by the
Agent at the Overdue Rate on the outstanding principal amount of any Loan and
any other amount payable by the Company hereunder (other than interest) which
is not paid in full when due (whether at stated maturity, by
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acceleration or otherwise) for the period commencing on the due date thereof
until the same is paid in full.
3.3 Payment Method.
(a) All payments to be made by the Company hereunder will be
made in Dollars and in immediately available funds to the Agent for the account
of the Banks at its address set forth next to its name in the signature pages
hereof not later than 2:00 p.m. Chicago time on the date on which such payment
shall become due. Payments received after 2:00 p.m. Chicago time shall be deemed
to be payments made prior to 2:00 p.m. on the next succeeding Business Day (or
Eurodollar Business Day with respect to payments in respect of Eurodollar Rate
Loans).
(b) At the time of making each such payment, the Company shall,
subject to the other terms and conditions of this Agreement, specify to the
Agent that Borrowing or other obligation of the Company hereunder to which such
payment is to be applied. In the event that the Company fails to so specify the
relevant obligation or if an Event of Default shall have occurred and be
continuing, the Agent may apply such payments as it may determine in its sole
discretion to obligations of the Company to the Banks arising under this
Agreement or otherwise.
(c) On the day such payments are deemed received, the Agent shall
remit to the Banks their pro rata shares of such payments in immediately
available funds. In the event the Agent fails to so remit to the Banks their pro
rata shares of such payments on the day such payments are deemed received, the
Agent shall pay to the Banks interest on such amounts until paid at the Federal
Funds Effective Rate. In the case of payments of principal and interest on any
Borrowing, such pro rata shares shall be determined with respect to each such
Bank by the ratio which the outstanding principal balance of its Loan included
in such Borrowing bears to the outstanding principal balance of the Loans of all
of the Banks included in such Borrowing, and in the case of fees paid pursuant
to Section 2.3 and other amounts payable hereunder (other than the Agent's fees
payable pursuant to Section 2.3(c) and amounts payable to any Bank under Section
3.6, 3.7 or 3.8), such pro rata shares shall be determined with respect to each
such Bank by the ratio which the Commitment of such Bank bears to the aggregate
Commitments of all the Banks.
3.4 No Setoff or Deduction. All payments of principal of and interest
on the Loans and other amounts payable by the Company hereunder shall be made
by the Company without setoff or counterclaim, and, subject to the next
succeeding sentence, free and clear of, and without deduction or withholding
for, or on account of, any present or future taxes, levies, imposts, duties,
fees, assessments, or other charges of whatever nature, imposed by any
governmental authority, or by any department, agency or other political
subdivision or taxing authority. If any such taxes levies, imposts, duties,
fees, assessments or other charges are imposed, the Company will pay such
additional amounts as may be necessary so that payment of principal of and
interest on the Loans and other amounts payable hereunder, after withholding or
deduction for or on account thereof, will not be less than any amount provided
to be paid
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hereunder and, in any such case, the Company will furnish to the Banks certified
copies of all tax receipts evidencing the payment of such amounts within 45 days
after the date any such payment is due pursuant to applicable law.
3.5 Payment on Non-Business Day: Payment Computations. Except as
otherwise provided in this Agreement to the contrary, whenever any installment
of principal of, or interest on, any Loan or any other amount due hereunder
becomes due and payable on a day which is not a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day and, in the case
of any installment of principal, interest shall be payable thereon at the rate
per annum determined in accordance with this Agreement during such extension.
Computations of interest and other amounts due under this Agreement, including,
without limitation, the commitment fees payable under Section 2.3(a) shall be
made on the basis of a year of 365 or 366 days, as the case may be (or 360 days
when determining the Eurodollar Rate), for the actual number of days elapsed,
including the first day but excluding the last day of the relevant period.
3.6 Additional Costs. (a) In the event that any applicable law, rule
or regulation (whether domestic or foreign) or treaty or other international
agreement now or hereafter in effect and whether or not presently applicable to
any Bank or the Agent, or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by any Bank or the Agent with any guideline, request or
directive of any such authority (whether or not having the force of law), shall
(i) affect the basis of taxation of payments to any Bank or the Agent of any
amounts payable by the Company under this Agreement (other than taxes imposed on
the overall net income of any Bank or the Agent by the jurisdiction, or by any
political subdivision or taxing authority of any such jurisdiction, in which
such Bank or the Agent, as the case may be, has its principal office), or (ii)
shall impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by any Bank or the Agent, or (iii) shall impose any other condition
with respect to this Agreement, the Commitments, the Notes or the Loans, and the
result of any of the foregoing is to increase the cost to any Bank of making,
funding or maintaining any Eurodollar Rate Loan or to reduce the amount of any
sum receivable by any Bank or the Agent, as the case may be, thereon, then the
Company shall pay to such Bank or the Agent, as the case may be, from time to
time, upon request by such Bank (with a copy of such request to be provided to
the Agent) or the Agent, additional amounts sufficient to compensate such Bank
or the Agent, as the case may be, for such increased cost or reduced sum
receivable to the extent such Bank or the Agent is not compensated therefor in
the computation of the interest rate applicable to such Eurodollar Rate Loan. A
statement as to the amount of such increased cost or reduced sum receivable,
prepared in good faith and in reasonable detail by such Bank or the Agent, as
the case may be, and submitted by such Bank or the Agent, as the case may be, to
the Company, shall be conclusive and binding for all purposes absent
demonstrable error in computation.
(b) In the event that any applicable law, rule or regulation
(whether domestic or foreign) or treaty or other international agreement now or
hereafter in effect and whether or not presently applicable to any Bank or the
Agent, or any interpretation or administration thereof
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by any governmental authority charged with the interpretation or administration
thereof, or compliance by any Bank or the Agent with any guideline, request or
directive of any such authority (whether or not having the force of law),
including any risk-based capital guidelines, affects or would affect the amount
of capital required or expected to be maintained by such Bank or the Agent (or
any corporation controlling such Bank or the Agent) and such Bank or the Agent,
as the case may be, determines that the amount of such capital is increased by
or based upon the existence of such Bank's or the Agent's obligations hereunder
and such increase has the effect of reducing the rate of return on such Bank's
or the Agent's (or such controlling corporation's) capital as a consequence of
such obligations hereunder to a level below that which such Bank or the Agent
(or such controlling corporation) could have achieved but for such circumstances
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Bank or the Agent to be material, then the Company shall
pay to such Bank or the Agent, as the case may be, from time to time, upon
request by such Bank (with a copy of such request to be provided to the Agent)
or the Agent, additional amounts sufficient to compensate such Bank or the Agent
(or such controlling corporation) for any increase in the amount of capital and
reduced rate of return which such Bank or the Agent reasonably determines to be
applicable to the existence of such Bank's or the Agent's obligations
hereunder. A statement as to the amount of such compensation, prepared in good
faith and in reasonable detail by such Bank or the Agent, as the case may be,
and submitted by such Bank or the Agent to the Company, shall be conclusive and
binding for all purposes absent demonstrable error in computation.
3.7 Illegality and Impossibility. In the event that any applicable
law, rule or regulation (whether domestic or foreign) or treaty or other
international agreement now or hereafter in effect and whether or not presently
applicable to any Bank, or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by any Bank with any guideline, request or directive of
such authority (whether or not having the force of law), including without
limitation exchange controls, shall make it unlawful or impossible for any Bank
to maintain any Loan under this Agreement, the Company shall, upon receipt of
notice thereof from such Bank, repay in full the then outstanding principal
amount of each Loan so affected, together with all accrued interest thereon to
the date of payment and all amounts owing to such Bank under Section 3.8, (a) on
the last day of the then current Interest Period applicable to such Loan if such
Bank may lawfully continue to maintain such Loan to such day, or (b) immediately
if such Bank may not continue to maintain such Loan to such day. Nothing in this
Section 3.7 shall prohibit the Company from, subject to the other terms and
conditions of this Agreement, using the proceeds of any Borrowing of a type not
then effected as contemplated by this Section 3.7 to make any repayment of any
Borrowing of a type so effected as required under this Section 3.7.
3.8 Indemnification.
(a) If the Company makes any payment of principal with respect to
any Eurodollar Rate Borrowing on any other date than the last day of an Interest
Period applicable thereto (whether pursuant to Section 3.1 (b), 3.1 (c), 3.7,
6.2 or otherwise), or if the Company fails to borrow any Eurodollar Rate
Borrowing after notice has been given to the Banks in accordance
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with Section 2.4, or if the Company fails to make any payment of principal or
interest in respect of a Eurodollar Rate Borrowing when due, the Company shall
reimburse each Bank on demand for any resulting loss or expense incurred by each
such Bank, including without limitation any loss incurred in obtaining,
liquidating or employing deposits from third parties. A statement as to the
amount of such loss or expense, prepared in good faith and in reasonable detail
by such Bank and submitted by such Bank to the Company, shall be conclusive and
binding for all purposes absent demonstrable error in computation. Calculation
of all amounts payable to any Bank under this Section 3.8 shall be made as
though such Bank shall have actually funded or committed to fund the relevant
Eurodollar Rate Borrowing through the purchase of an underlying deposit in an
amount equal to the amount of the Loan to be made by such Bank as part of such
Borrowing in the relevant market and having a maturity comparable to the related
Interest Period and through the transfer of such deposit to a domestic office of
such Bank in the United States; provided, however, that each Bank may fund any
Eurodollar Rate Loan in any manner it sees fit and the foregoing assumption
shall be utilized only for the purpose of calculation of amounts payable under
this Section 3.8.
(b) Notwithstanding anything herein to the contrary, if, in
connection with any mandatory reduction of the Commitments under Section 2.2(c),
a prepayment of Eurodollar Rate Loans would otherwise be required under Section
3.1(c) (after prepayment of all Floating-Rate Loans) and the Company would
otherwise be required to reimburse any of the Banks for any resulting losses or
expenses under Section 3.8(a), the Company may elect to defer such prepayment of
Eurodollar Rate Loans and deposit an amount equal to the amount of such required
prepayment of Eurodollar Rate Loans into a special segregated cash collateral
account to be held by the Agent for the benefit of the Banks as collateral
security for the Company's obligations under this Agreement and the Notes, until
the end of the relevant Interest Period(s) applicable thereto (but not longer
than six months), at which time such cash collateral shall be applied to repay
such Eurodollar Rate Loans, and the Company hereby authorizes and directs the
Agent to apply such cash collateral to such repayment at such time.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Banks and the Agent that:
4.1 Corporate Existence and Power. Each of the Company and the
Guarantors is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and is duly
qualified to do business, and is in good standing, in all additional
jurisdictions where such qualification is necessary under applicable law. Each
of the Company and the Guarantors has all requisite corporate power to own or
lease the properties used in its business and to carry on its business as now
being conducted and as proposed to be conducted, and to execute and deliver this
Agreement, the Notes and the Security Documents to which it is a party and to
engage in the transactions contemplated by this Agreement.
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4.2 Corporate Authority. The execution, delivery and performance by
the Company of this Agreement and the Notes, and the execution, delivery and
performance by each of the Company and the Guarantors of the Security Documents
to which it is a party, have been duly authorized by all necessary corporate
action and are not in contravention of arty law, rule or regulation, or any
judgment, decree, writ, injunction, order or award of any arbitrator, court or
governmental authority, or of the terms of any such person's charter or
by-laws, or of any contract or undertaking to which any such person is a party
or by which any such person or any of its property may be bound or affected.
4.3 Binding Effect. This Agreement is, and the Notes and the Security
Documents to which the Company or either Guarantor is a party when delivered
thereunder will be, legal, valid and binding obligations of the Company or such
Guarantor, as the case may be, enforceable against each such person in
accordance with their respective terms.
4.4 Subsidiaries. Schedule 4.4 hereto correctly sets forth the
corporate name, jurisdiction of incorporation and ownership of each Subsidiary
of the Company. Each such Subsidiary and each corporation becoming a Subsidiary
of the Company after the date hereof is and will be a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and is and will be duly qualified to do business
in each additional jurisdiction where such qualification is or may be necessary
under applicable law. Each Subsidiary of the Company has and will have all
requisite corporate power to own or lease the properties used in its business
and to carry on its business as now being conducted and as proposed to be
conducted, and to execute and deliver the Security Documents to which it is a
party and to engage in the transactions contemplated thereby. All outstanding
shares of capital stock of each class of each Subsidiary of the Company have
been and will be validly issued and are and will be fully paid and nonassessable
and, except as otherwise indicated in Schedule 4.4 hereto or disclosed in
writing to the Agent and the Banks from time to time, are and will be owned,
beneficially and of record, by the Company or another Subsidiary of the Company
free and clear of any Liens.
4.5 Litigation. Except as set forth in Schedule 4.5 hereto, there is
no action, suit or proceeding pending or, to the best of the Company's
knowledge, threatened against or affecting the Company or any of its
Subsidiaries before or by any court, governmental authority or arbitrator, which
if adversely decided might result, either individually or collectively, in any
material adverse change in the business, properties, operations or condition,
financial or otherwise, of the Company or any of its Subsidiaries or in any
Material Adverse Effect and, to the best of the Company's knowledge, there is no
basis for any such action, suit or proceeding.
4.6 Financial Condition. The consolidated and consolidating balance
sheets of the Company and its Subsidiaries and the consolidated and
consolidating statements of income, retained earnings and cash flows of the
Company and its Subsidiaries for the fiscal year ended December 31, 1996 and
(except for such consolidating statements) reported on by Deloitte & Touche,
independent certified public accountants, and the interim consolidated balance
sheet and interim consolidated statements of income, retained earnings and cash
flows of the Company and its Subsidiaries, as of or for the three-month period
ended on March 31, 1997, copies of which
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have been furnished to the Banks, fairly present, and the financial statements
of the Company and its Subsidiaries delivered pursuant to Section 5.1(d) will
fairly present, the consolidated financial position of the Company and its
Subsidiaries as at the respective dates thereof, and the consolidated results of
operations of the Company and its Subsidiaries for the respective periods
indicated, all in accordance with Generally Accepted Accounting Principles
consistently applied (subject, in the case of said interim statements, to
year-end audit adjustments). There is no material Contingent Liability of the
Company or any of its Subsidiaries that is not reflected in such financial
statements or in the notes thereto.
4.7 Use of Loans. The Company will use the proceeds of the Loans to
refinance all existing Indebtedness of the Company and its Subsidiaries to the
Banks and for the Company's general corporate purposes. Neither the Company nor
any of its Subsidiaries extends or maintains, in the ordinary course of
business, credit for the purpose, whether immediate, incidental, or ultimate, of
buying or carrying margin stock (within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System), and no part of the proceeds of any
Loan will be used for the purpose, whether immediate, incidental, or ultimate,
of buying or carrying any such margin stock or maintaining or extending credit
to others for such purpose. After applying the proceeds of each Loan, such
margin stock will not constitute more than 25% of the value of the assets
(either of the Company alone or of the Company and its Subsidiaries on a
consolidated basis) that are subject to any provisions of this Agreement or any
Security Document that may cause the Loans to be deemed secured, directly or
indirectly, by margin stock.
4.8 Consents. Etc. Except for such consents, approvals,
authorizations, declarations, registrations or filings delivered by the Company
pursuant to Section 2.5(g), if any, each of which is in full force and effect,
no consent, approval or authorization of or declaration, registration or filing
with any governmental authority or any nongovernmental person or entity,
including, without limitation, any creditor, lessor or stockholder of the
Company or any of its Subsidiaries, is required on the part of the Company or
any Guarantor in connection with the execution, delivery and performance of this
Agreement, the Notes, the Security Documents or the transactions contemplated
hereby or as a condition to the legality, validity or enforceability of this
Agreement, the Notes or any of the Security Documents.
4.9 Taxes. The Company and its Subsidiaries have filed all tax returns
(federal, state and local) required to be filed and have paid all taxes shown
thereon to be due, including interest and penalties, or have established
adequate financial reserves on their respective books and records for payment
thereof. Neither the Company nor any of its Subsidiaries knows of any actual or
proposed tax assessment or any basis therefor, and no extension of time for the
assessment of deficiencies in any federal or state tax has been granted by the
Company or any such Subsidiary.
4.10 Title to Properties. Except as otherwise disclosed in the latest
balance sheet referenced in Section 4.6 or delivered pursuant to 5.1(d) of this
Agreement, the Company or one or more of its Subsidiaries have good and
marketable fee simple title to all of the real property, and a valid and
indefeasible ownership interest in all of the other properties and assets
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(including, without limitation, the collateral subject to the Security Documents
to which any of them is a party) reflected in said balance sheet or subsequently
acquired by the Company or any such Subsidiary. All of such properties and
assets are free and clear of any Lien, except for Permitted Liens.
4.11 ERISA. The Company, its Subsidiaries, their ERISA Affiliates and
their respective Plans are in compliance in all material respects with those
provisions of ERISA and of the Code which are applicable with respect to any
Plan. No Prohibited Transaction and no Reportable Event has occurred with
respect to any such Plan. None of the Company, any of its Subsidiaries or any of
their ERISA Affiliates is an employer with respect to any Multiemployer Plan.
The Company, its Subsidiaries and their ERISA Affiliates have met the minimum
funding requirements under ERISA and the Code with respect to each of their
respective Plans, if any, and have not incurred any liability to the PBGC or any
Plan. The execution, delivery and performance of this Agreement, the Notes and
the Security Documents does not constitute a Prohibited Transaction. There is no
material Unfunded Benefit Liability with respect to any Plan of the Company, its
Subsidiaries or their ERISA Affiliates.
4.12 Disclosure. No report or other information furnished in writing
by or on behalf of the Company or any of its Subsidiaries to any Bank or the
Agent in connection with the negotiation or administration of this Agreement
contains any material misstatement of fact or omits to state any material fact
or any fact necessary to make the statements contained therein not misleading in
light of the circumstances in which they were made. Neither this Agreement, the
Notes, the Security Documents nor any other document, certificate, or report or
statement or other information furnished to any Bank or the Agent by or on
behalf of the Company or any of its Subsidiaries in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading in light of the circumstances in
which they were made. There is no fact known to the Company or any of its
Subsidiaries which materially and adversely affects, or which in the future may
(so far as the Company can now foresee) materially and adversely affect, the
business, properties, operations or condition, financial or otherwise, of the
Company or any of its Subsidiaries, which has not been set forth in this
Agreement or in the other documents, certificates, statements, reports and other
information furnished in writing to the Banks by or on behalf of the Company in
connection with the transactions contemplated hereby.
4.13 Environmental Matters. The Company and each of its Subsidiaries
is in compliance with all Environmental Laws in jurisdictions in which the
Company or any such Subsidiary owns or operates, or has owned or operated, a
facility or site, or arranges or has arranged for disposal or treatment of
hazardous substances, solid waste, or other wastes, accepts or has accepted for
transport any hazardous substances, solid wastes or other wastes or holds or has
held any interest in real property or otherwise. No demand, claim, notice,
action, administrative proceeding investigation or inquiry whether brought by
any governmental authority, private person or entity or otherwise, arising
under, relating to or in connection with any Environmental Laws is pending or
threatened against the Company or any of its Subsidiaries, any real property in
which the Company or any such Subsidiary holds or has held
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an interest or any past or present operation of the Company or any such
Subsidiary. Neither the Company nor any of its Subsidiaries (a) is the subject
of any federal or state investigation evaluating whether any remedial action is
needed to respond to a release of any toxic substances, radioactive materials,
hazardous wastes or related materials into the environment, (b) has received any
notice of any toxic substances, radioactive materials, hazardous waste or
related materials in, or upon any of its properties in violation of any
Environmental Laws, (c) knows of any basis for any such investigation, notice or
violation, or (d) owns or operates, or has owned or operated, property which
appears on the United States National Priority List or any other governmental
listing which identifies sites for remedial clean-up or investigator actions.
No release, threatened release or disposal of hazardous waste, solid waste or
other wastes is occurring or has occurred on, under or to any real property in
which the Company or any of its Subsidiaries holds any interest or performs any
of its operations, in violation of any Environmental Law.
4.14 Integrated Operation. The Company, the Guarantors and the other
Subsidiaries of the Company are engaged as an integrated group in the insurance
business. The integrated operation requires financing on such a basis that
credit is supplied to the Company for the continued successful operation of the
integrated group as a whole, and each of the Guarantors has requested the Banks
to make credit available to the Company for the purpose of financing the
integrated operations of the Company, the Guarantors and the other Subsidiaries
of the Company, with each of such entities expecting to derive benefit, directly
or indirectly, from the credit extended by the Banks to the Company, both in
each entity's separate capacity and as a member of the integrated group, in as
much as the successful operation and condition of each such entity is dependent
upon the continued successful performance of the functions of the integrated
group as a whole.
4.15 American Agrisurance/AGIC Agreement. All necessary regulatory
approvals for the execution, delivery and performance of the American
Agrisurance/AGIC Agreement by the parties thereto have been obtained and are in
full force and effect.
4.16 Material Adverse Change. Since December 31, 1996, there has been
no change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries which
could have a Material Adverse Effect.
4.17 Material Agreements. Neither the Company nor any of its
Subsidiaries is a party to any agreement or instrument or subject to any charter
or other corporate restriction which could have a Material Adverse Effect.
Neither the Company nor any of its Subsidiaries 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 have a Material Adverse Effect or (b) any agreement or instrument
evidencing or governing Indebtedness.
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ARTICLE V.
COVENANTS
5.1 Affirmative Covenants. The Company covenants and agree that, until
the Termination Date and thereafter until the payment in full of the principal
of and accrued interest on the Notes and the performance of all other
obligations of the Company under this Agreement, unless the Required Banks shall
otherwise consent in writing, it shall, and shall cause each of its Subsidiaries
to:
(a) Preservation of Corporate Existence. Etc. Do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and its qualification as a foreign corporation in good
standing in each jurisdiction in which such qualification is necessary under
applicable law, and the rights, licenses, permits (including those required
under Environmental Laws), franchises, patents, copyrights, trademarks and trade
names material to the conduct of its businesses; and defend all of the foregoing
against all claims, actions, demands, suits or proceedings at law or in equity
or by or before any governmental instrumentality or other agency or regulatory
authority.
(b) Compliance with Laws. Etc. Comply in all material respects
with all applicable laws, rules, regulations and orders of any governmental
authority, whether federal, state, local or foreign (including without
limitation ERISA, the Code and Environmental Laws), in effect from time to time;
and pay and discharge promptly when due all taxes, assessments and governmental
charges or levies imposed upon it or upon its income, revenues or property,
before the same shall become delinquent or in default, as well as all lawful
claims for labor, materials and supplies or otherwise, which, if unpaid, might
give rise to Liens upon such properties or any portion thereof, except to the
extent that payment of any of the foregoing is then being contested in good
faith by appropriate legal proceedings and with respect to which adequate
financial reserves have been established on the books and records of the Company
or any of its Subsidiaries.
(c) Maintenance of Properties; Insurance. Maintain, preserve and
protect all property that is material to the conduct of the business of the
Company or any of its Subsidiaries and keep such property in good repair,
working order and condition and from time to time make, or cause to be made, all
needful and proper repairs, renewals, additions, improvements and replacements
thereto necessary in order that the business carried on in connection therewith
may be properly conducted at all times in accordance with customary and prudent
business practices for similar businesses; and to maintain in full force and
effect insurance with responsible and reputable insurance companies or
associations in such amounts, on such terms and covering such risks, including
fire and other risks insured against by extended coverage, as is usually carried
by companies engaged in similar businesses and owning similar properties
similarly situated and maintain in full force and effect public liability
insurance, insurance against claims for personal injury or death or property
damage occurring in connection with any of its activities or any properties
owned, occupied or controlled by it, in such amount as it shall reasonably deem
necessary, and maintain such other insurance as may be required by law
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or as may be reasonably requested by the Agent for purposes of assuring
compliance with this Section 5.1 (c).
(d) Reporting Requirements. Furnish to the Agent (with a copy
for each of the Banks) the following:
(i) Promptly and in any event within three calendar days
after becoming aware of the occurrence of (A) any Default or Event of Default,
(B) the commencement of any material litigation against, by or affecting the
Company, or any of its Subsidiaries, and any material developments therein, (C)
entering into any material contract or undertaking that is not entered into in
the ordinary course of business or (D) any development in the business or
affairs of the Company or any of its Subsidiaries which has resulted in or which
is likely, in the reasonable judgment of the Company, to result in a material
adverse change in the business, properties, operations or condition, financial
or otherwise of the Company or any of its Subsidiaries, a statement of the chief
financial officer of the Company setting forth details of each such Default or
Event of Default or such litigation, material contract or undertaking or
development and the action which the Company or such Subsidiary, as the case may
be, has taken and proposes to take with respect thereto;
(ii) As soon as available and in any event within 45 days
after the end of each of the first three fiscal quarters of each fiscal year of
the Company, the consolidated balance sheet of the Company and its Subsidiaries
as of the end of such quarter, and the related consolidated statements of
income, retained earnings and cash flows of the Company and its Subsidiaries for
the period commencing at the end of the previous fiscal year and ending with the
end of such quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding date or period of the preceding
fiscal year, all in reasonable detail and duly certified (subject to year-end
audit adjustments) by the chief financial officer of the Company as having been
prepared in accordance with Generally Accepted Accounting Principles, together
with a certificate of the chief financial officer of the Company stating (A)
that no Default or Event of Default has occurred and is continuing or, if a
Default or Event of Default has occurred and is continuing, a statement setting
forth the details thereof and the action which the Company has taken and
proposes to take with respect thereto, and (B) that a computation (which
computation shall accompany such certificate and shall be in reasonable detail)
showing compliance with Sections 5.2(a), (b), (c), (d), (e), (f) and (g) is in
conformity with the terms of this Agreement;
(iii) As soon as available and in any event within 120 days
after the end of each fiscal year of the Company, a copy of the consolidating
and consolidated balance sheets of the Company and its Subsidiaries as of the
end of such fiscal year and the related consolidating and consolidated
statements of income, retained earnings and cash flows of the Company and its
Subsidiaries for such fiscal year, with a customary audit report of Deloitte &
Touche, or other independent certified public accountants of comparable standing
selected by the Company, with respect to such consolidated statements, which
report shall be without qualifications unacceptable to the Required Banks, and
which audit report shall be directed to the Banks, and shall provide that the
client representation of such accountants extends to the Banks,
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together with a certificate of the chief financial officer of the Company
stating (A) that no Default or Event of Default has occurred and is continuing
or, if a Default or Event of Default has occurred and is continuing, a statement
setting forth the details thereof and the action which the Company has taken and
proposes to take with respect thereto, and (B) that a computation (which
computation shall accompany such certificate and shall be in reasonable detail)
showing compliance with Sections 5.2(a), (b), (c), (d), (e), (f) and (g) is in
conformity with the terms of this Agreement;
(iv) As soon as available and in any event within 45 days
after the end of each of the first three fiscal quarters of each fiscal year of
AIC and RIC, the quarterly statement of the condition and affairs of each such
company, including all schedules of investments, all in reasonable detail and
duly certified by the chief financial officer of the Company as having been
prepared in accordance with SAP;
(v) As soon as available and in any event within 90 days
after the end of each Insurance Subsidiary's fiscal year, the annual statement
of the condition and affairs of each such Insurance Subsidiary, including all
schedules of investments, all in reasonable detail and duly certified by the
chief financial officer of the Company as having been prepared in accordance
with SAP;
(vi) Promptly after the sending, filing or receipt
thereof, copies of all reports, proxy statements and financial statements which
the Company or any of its Subsidiaries sends to or files with any of their
respective security holders or any securities exchange or the Securities and
Exchange Commission or any successor agency thereof, or with the NAIC or other
regulators, and all reports, notices, inquiries and other material documents
received by the Company or any of its Subsidiaries from the NAIC or other
regulators;
(vii) Promptly and in any event within 10 calendar days
after receiving or becoming aware thereof (A) a copy of any notice of intent to
terminate any Plan of the Company, its Subsidiaries or any ERISA Affiliate filed
with the PBGC, (B) a statement of the chief financial officer of the Company
setting forth the details of the occurrence of any Reportable Event with respect
to any such Plan, (C) a copy of any notice that the Company, any of its
Subsidiaries or any ERISA Affiliate may receive from the PBGC relating to the
intention of the PBGC to terminate any such Plan or to appoint a trustee to
administer any such Plan, or (D) a copy of any notice of failure to make a
required installment or other payment within the meaning of Section 412(n) of
the Code or Section 302(f) of ERISA with respect to any such Plan;
(viii) Promptly and in any event within 10 days after
receipt, a copy of any management letter or comparable analysis prepared by the
auditors of the Company or any of its Subsidiaries;
(ix) As soon as available and in any event not later than
June 30th of each year, the annual certification for such year as to the
adequacy of loss reserves for each Insurance Subsidiary; and
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(x) Promptly such other information respecting the business,
properties, operations, or condition, financial or otherwise, of the Company or
any of its Subsidiaries as the Agent (whether on behalf of itself or any Bank)
may from time to time request.
(e) Accounting; Access to Records, Books, Etc. Maintain a system
of accounting established and administered in accordance with sound business
practices to permit preparation of financial statements in accordance with
Generally Accepted Accounting Principles and SAP and to comply with the
requirements of this Agreement and, at any reasonable time and from time to
time, permit any Bank or the Agent or any agents or representatives thereof to
examine and make copies of and abstracts from the records and books of account
of, and visit the properties of, the Company and its Subsidiaries, and to
discuss the affairs, finances and accounts of the Company and its Subsidiaries
with its directors, officers, employees and independent auditors, and by this
provision the Company hereby authorizes such persons to discuss such affairs,
finances and accounts with any Bank or the Agent.
(f) Additional Collateral. Promptly execute and deliver, or
cause to be executed and delivered, additional Security Documents, within 30
days after request therefor by the Agent, sufficient to pledge to the Agent for
the benefit of the Banks and the Agent any and all direct equity interests of
the Company or either Guarantor in any Insurance Subsidiaries acquired after the
Effective Date, including, without limitation, those acquired by the Company
pursuant to a merger permitted under Section 5.2(h), and promptly deliver to the
Agent, in pledge under the Note Pledge Agreement, all Surplus Notes acquired by
the Company after the Effective Date, endorsed in blank, together with an
opinion of counsel with respect thereto as described in SECTION 2.6(c). The
Company shall notify the Agent in writing (with sufficient copies for the
Banks), within 10 days after the occurrence thereof, of any event or condition
that may require additional action of any nature in order to comply with this
Section 5.1 (f) or to create or preserve the effectiveness and perfected status
of the liens and security interests of the Banks and the Agent with respect to
the collateral described in Section 2.10, including, without limitation, any
after-acquired collateral of such type. This Section 5.l(f) shall not affect
the obligations of the Company or rights of the Banks under Section 5.2(h).
(g) Further Assurances. Execute and deliver, or cause to be
executed and delivered, within 30 days after request therefor by the Agent all
further instruments and documents and take all further action that may be
necessary or desirable, or that the Agent may request, in order to give effect
to, and to aid in the exercise and enforcement of the rights and remedies of the
Banks and the Agent under, this Agreement, the Notes and the Security Documents.
5.2 Negative Covenants. Until the Termination Date and thereafter
until the payment in full of the principal of and accrued interest on the Notes
and the performance of all other obligations of the Company under this
Agreement, the Company agrees that, unless the Required Banks shall otherwise
consent in writing, it shall not, and shall not permit any of its Subsidiaries
to:
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(a) Augmented Cash Flow Coverage Ratio. Permit or suffer the
ratio of Augmented Cash Flow, determined as of the last day of any fiscal
quarter of the Company for the period of four fiscal quarters then ended, to
Adjusted Debt Service, determined as of the last day of such fiscal quarter, to
be less than 1.50 to 1.00.
(b) Funded Debt to Total Capitalization. Permit or suffer the
ratio of Funded Debt to Total Capitalization to be (i) greater than 0.35 to 1.00
at any time on or after the Effective Date to but excluding December 31, 2001 or
(ii) equal to or greater than 0.25 to 1.00 on December 31, 2001 or at any time
thereafter.
(c) Maximum Operating Leverage. Permit or suffer the ratio of (i)
the Net Written Premiums of any Insurance Subsidiary to (ii) the Statutory
Surplus of such Subsidiary, as of the end of any fiscal quarter of such
Subsidiary, to be greater than 3.00 to 1.00, in each case determined for the
period of four fiscal quarters of such Insurance Subsidiary then ended.
(d) Net Worth. Permit or suffer the consolidated Net Worth of the
Company and its Subsidiaries at any time to be less than the sum of (i)
$190,000,000 plus (ii) 50% of the consolidated Cumulative Net Income of the
Company and its Subsidiaries for the period commencing January 1, 1997.
(e) Investments. Loans and Advances. Make or suffer to exist any
Investments or commitments therefor (including, without limitation, Investments
in Subsidiaries of the Company), other than Investments that (i) are in
accordance with the investment policies of the Company and its Subsidiaries as
set forth in Exhibit I to this Agreement, including any nonmaterial amendments
and modifications thereof from time to time (the "Investment Policies"), and are
in accordance with all provisions of law, statutes, rules and regulations,
including, without limitation, state insurance regulations, applicable to the
Company or any of its Subsidiaries, and (ii) with respect to the Company and its
Subsidiaries other than Insurance Subsidiaries, without limiting the
requirements of the foregoing clause (i), also meet the following requirements:
no Investments or commitments therefor shall be made or suffered to exist,
except (1) Cash and Cash Equivalents, (2) Investments in Subsidiaries of the
Company, excluding Non-Material Subsidiaries, (3) Investments in existence on
the Effective Date as described in Schedule 5.2(e) hereto and (4) other
Investments in an aggregate amount not exceeding $5,000,000 at any time;
provided that no such Investment allowed under the foregoing clauses (1)-(4)
may be made or committed for at any time that any Default or Event of Default
shall have occurred and be continuing or if any Default or Event of Default or
Material Adverse Effect would result therefrom.
(f) Quality of Reinsurers. Permit or suffer (i) with respect to
all reinsurance other than crop reinsurance referred to in clause (ii) below, at
any time greater than 10% (based upon the then Dollar amount of ceded risk) of
all contracts for reinsurance purchased by the Company and its Subsidiaries to
be with reinsurers having a rating of less than A- as determined by A.M. Best
Company (or the ISI equivalent for European reinsurers), or (ii) with
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respect to crop reinsurance (both hail and multi-peril) owned by the Company
and its Subsidiaries, any material change in the quality of such reinsurance.
(g) NAIC Ratio Requirements. Permit or suffer any of the
Subsidiaries of the Company to at any time be outside the recommended range for
more than four of the NAIC ratio tests (other than excess capital
contributions).
(h) Merger; Acquisitions; Etc. Purchase or otherwise acquire,
whether in one or a series of transactions, all or a substantial portion of the
business, assets, rights, revenues or property, real, personal or mixed,
tangible or intangible, of any person, or all or a substantial portion of the
capital stock or other ownership interest in any other person; nor merge or
consolidate or amalgamate with any other person or take any action having a
similar effect, nor enter into any joint venture or similar arrangement with any
other person; provided that, subject to the provisions of Section 5.1(f), so
long as no Default or Event of Default shall have occurred and be continuing and
no Default or Event of Default under any other provision of this Agreement or
Material Adverse Effect would result therefrom, this Section 5.2(h) shall not
prohibit (i) any such purchases or acquisitions (A) in which the total
consideration paid or exchanged therefor is capital stock of the Company or
capital stock of any Subsidiaries of the Company not subject to a Pledge
Agreement or (B) with respect to which the aggregate Indebtedness incurred or
assumed by the Company and its Subsidiaries does not exceed $5,000,000 or (C) by
AIH and TRG (or, following a merger of the Guarantors into the Company, by the
Company) from AIC and RIC of the capital stock of Phoenix Indemnity Insurance
Company and American Growers Insurance Company, respectively, or (ii) the merger
of one or both of the Guarantors into the Company.
(i) Disposition of Assets. Sell, lease, license, transfer,
assign or otherwise dispose of all or a material portion of its business,
assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether in one or a series of transactions, other than sales in the
ordinary course of business of securities owned by the Company or any of its
Subsidiaries for investment purposes, provided that this Section 5.2(i) shall
not prohibit the sale by AIC or RIC to AIH and TRG, respectively (or to the
Company), of the capital stock of Phoenix Indemnity Insurance Company and
American Growers Insurance Company as contemplated under Section 5.2(h).
(j) Nature of Business. Make any substantial change in the
nature of its business from that engaged in on the date of this Agreement or
engage in any other businesses other than those in which it is engaged on the
date of this Agreement.
(k) Stock of Subsidiaries. Sell, pledge (other than pursuant to
the Pledge Agreements), create a security interest in or otherwise encumber,
dispose of or transfer any shares of capital stock of any of its Subsidiaries;
nor issue any additional shares of capital stock.
(l) Indebtedness. Create, incur, assume or in any manner become
liable in respect of, or suffer to exist, any Indebtedness other than:
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(i) The Loans and other Indebtedness to the Banks
hereunder;
(ii) Indebtedness in aggregate outstanding principal
amount not exceeding $500,000 which is secured by one or more Liens permitted by
Section 5.2(m)(vi);
(iii) Indebtedness of any Subsidiary of the Company owing
to the Company or to any Guarantor;
(iv) Unsecured current Indebtedness constituting
obligations for the unpaid purchase price of goods, property or services in
aggregate outstanding principal amount not exceeding $500,000 incurred in the
ordinary course of business (A) to a seller of inventory purchased for sale in
the ordinary course of business of the Company or any of its Subsidiaries, (B)
to a seller of other property used in the business of the Company or any of its
Subsidiaries or (C) to a provider of services to the Company or any of its
Subsidiaries;
(v) Subordinated Debt of the Company or any of its
Subsidiaries, provided that (A) no such Subordinated Debt shall be created if
any Default or Event of Default shall have occurred and be continuing or any
Default or Event of Default under any other provision of this Agreement or
Material Adverse Effect would result therefrom, (B) no Subordinated Debt of the
Company shall be owing to any Subsidiary of the Company other than a Subsidiary
Business Trust, and (C) any such Subordinated Debt of the Company owing to any
Subsidiary Business Trust shall (1) be for borrowed money in an aggregate
principal amount not in excess of the proceeds of Trust Preferred Securities
issued by such Subsidiary Business Trust, (2) bear interest at a rate and
subject to a payment schedule that matches the rate and payment schedule
applicable to distributions on such Trust Preferred Securities and (3) have a
scheduled maturity date after the Maturity Date;
(vi) Contingent Liabilities of the Company and its
Subsidiaries in respect of standby letters of credit in an aggregate amount not
greater than $5,000,000 at any time issued for the account of the Company in the
ordinary course of the Company's business;
(vii) The other Indebtedness described in Schedule 5.2(1)
hereto, having the same terms as those existing on the date of this Agreement,
but no extension or renewal thereof shall be permitted; and
(viii) Rate Hedging Obligations of the Company under any
Rate Hedging Agreement with a Bank party to this Agreement pursuant to which the
Company swaps its floating interest rate exposure with respect to the Loans for
a fixed rate; provided that such Rate Hedging Agreement takes into account all
scheduled reductions of the Commitments under Section 2.2(b).
(m) Liens. Create, incur or suffer to exist any Lien on any of
the assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether now owned or hereafter acquired, of the Company or any of
its Subsidiaries, other than:
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(i) Liens for taxes not delinquent or for taxes being
contested in good faith by appropriate proceedings and as to which adequate
financial reserves have been established on its books and records;
(ii) Liens (other than any Lien imposed by ERISA or any
Environmental Law) created and maintained in the ordinary course of business
which are not material in the aggregate, and which would not have a material
adverse effect on the business or operations of the Company or any of its
Subsidiaries and which constitute (A) pledges or deposits under worker's
compensation laws, unemployment insurance laws or similar legislation, (B) good
faith deposits in connection with bids, tenders, contracts or leases to which
the Company or any of its Subsidiaries is a party for a purpose other than
borrowing money or obtaining credit, including rent security deposits, (C) liens
imposed by law, such as those of carriers, warehousemen and mechanics, if
payment of the obligation secured thereby is not yet due, (D) Liens securing
taxes, assessments or other governmental charges or levies not yet subject to
penalties for nonpayment, and (E) pledges or deposits to secure public or
statutory obligations of the Company or any of its Subsidiaries, or surety,
customs or appeal bonds to which the Company or any of its Subsidiaries is a
party;
(iii) Liens affecting real property which constitute minor
survey exceptions or defects or irregularities in title, minor encumbrances,
easements or reservations of, or rights of others for, rights of way, sewers,
electric lines, telegraph and telephone lines and other similar purposes, or
zoning or other restrictions as to the use of such real property, provided that
all of the foregoing, in the aggregate, do not at any time materially detract
from the value of said properties or materially impair their use in the
operation of the businesses of the Company or any of its Subsidiaries;
(iv) Liens created pursuant to the Security Documents and
Liens expressly permitted by the Security Documents;
(v) Each Lien described in Schedule 5.2(m) hereto may be
suffered to exist upon the same terms as those existing on the date hereof, but
no extension or renewal thereof shall be permitted;
(vi) Any Lien created to secure payment of a portion of the
purchase price of any tangible fixed asset acquired by the Company or any of its
Subsidiaries, or payments under any Capital Lease for the lease of any tangible
fixed asset leased by the Company or any of its Subsidiaries, may be created or
suffered to exist upon such fixed asset if the outstanding principal amount of
the Indebtedness secured by such Lien does not at any time exceed the purchase
price of such fixed asset and the aggregate principal amount of all Indebtedness
secured by such Liens, plus the capitalized amount of all such Capital Leases
does not exceed $500,000, provided that such Lien does not encumber any other
asset at any time owned by the Company or such Subsidiary;
(vii) Liens in favor of the Company or any of the Guarantors
as security for Indebtedness permitted by Section 5.2(l)(iii); and
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(viii) The interest or title of a lessor under any lease
otherwise permitted under this Agreement with respect to the property subject to
such lease to the extent performance of the obligations of the Company or its
Subsidiary thereunder are not delinquent.
(n) Contingent Liabilities. Create, incur, assume, or in any
manner become liable in respect of, or suffer to exist, any Contingent
Liabilities, other than (i) Contingent Liabilities permitted under Section
5.2(l)(vi) and 5.2(l)(viii), (ii) Contingent Liabilities under the APFC Debt
Guaranty; provided that the principal indebtedness guaranteed by the Company
under the APFC Debt Guaranty shall not exceed $25,000,000, and (iii) Contingent
Liabilities of the Company in respect of Distributions on Trust Preferred
Securities.
(o) Inconsistent Agreements. Enter into any agreement containing
any provision which would be violated or breached by this Agreement or any of
the transactions contemplated hereby or by performance by the Company or any of
its subsidiaries of its obligations in connection therewith.
(p) Dividends and Other Restricted Payments. Make, pay, declare
or authorize any dividend, payment or other distribution in respect of any class
of its capital stock or any dividend, payment or distribution in connection with
the redemption, purchase, retirement or other acquisition, directly or
indirectly, of any shares of it capital stock other than (i) such dividends,
payments or other distributions to the extent payable solely in shares of the
capital stock of the Company or to the extent payable to the Company by a
Subsidiary of the Company, and (ii) provided that no Default or Event of Default
shall have occurred and be continuing and no Default or Event of Default under
any other provision of this Agreement or Material Adverse Effect would result
therefrom, (A) repurchases of small odd lots of the Company's stock, provided
that the aggregate amount of the payments made after the Effective Date in
connection with such odd lot repurchases does not exceed $2,000,000, and (B)
Distributions on Trust Preferred Securities.
(q) Transactions with Affiliates. Enter into, become a party to,
or become liable in respect of, any contract or undertaking with any Affiliate
except in the ordinary course of business and on terms not less favorable to the
Company or such Subsidiary than those which could be obtained if such contract
or undertaking were an arms length transaction with a person other than an
Affiliate.
(r) Payments and Modification of Subordinated Debt. Make any
optional payment, prepayment or redemption of any Subordinated Debt, nor amend
or modify, or consent or agree to any amendment or modification, which would
shorten any maturity or increase the amount of any payment of principal or
increase the rate (or require earlier payment) of interest on any such
Subordinated Debt, nor amend any agreement under which any Subordinated Debt is
issued or created or otherwise related thereto, nor enter into any agreement or
arrangement providing for the defeasance of any Subordinated Debt.
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(s) Tax Sharing Agreement. Permit or suffer the Tax Sharing
Agreement to be amended or modified or any provision thereof to be waived, or
permit or suffer any Subsidiary of the Company to enter into any other tax
sharing arrangement.
(t) Negative Pledge Prohibition. Enter into any agreement with
any person (other than pursuant to this Agreement) that prohibits the Company or
any of its Subsidiaries from acting to, or in any way limits the ability of the
Company or any of its Subsidiaries to, create, incur, assume or suffer to exist
any Lien upon any capital stock of any Insurance Subsidiary.
ARTICLE VI.
DEFAULT
6.1 Events of Default. The occurrence of any one of the following
events or conditions shall be deemed an "Event of Default" hereunder unless
waived pursuant to Section 8.1:
(a) Nonpayment. The Company shall fail to pay when due any
principal of or interest on the Notes or any fees or any other amount payable
hereunder; or
(b) Misrepresentation. Any representation or warranty made by the
Company in Article IV hereof or in any Security Document or any other
certificate, report, financial statement or other document furnished by or on
behalf of the Company in connection with this Agreement, shall prove to have
been incorrect in any material respect when made or deemed made; or
(c) Certain Covenants. The Company shall fail to perform or
observe any term, covenant or agreement contained in Article V hereof; or
(d) Other Defaults. The Company shall fail to perform or observe
any other term, covenant or agreement contained in this Agreement or in the
Security Documents, and any such failure shall remain unremedied for 15 calendar
days after notice thereof shall have been given to the Company by the Agent (or
such longer period of time as may be specified in such Security Document); or
(e) Cross Default. The Company or any of its Subsidiaries shall
fail to pay any part of the principal of, the premium, if any, or the interest
on, or any other payment of money due under any of its Indebtedness (other than
Indebtedness hereunder), beyond any period of grace provided with respect
thereto, which individually or together with other such Indebtedness as to which
any such failure exists has an aggregate outstanding principal amount in excess
of $500,000; or if the Company or any of its Subsidiaries fails to perform or
observe any other term, covenant or agreement contained in, or if any other
event or condition occurs or exists under, any agreement, document or instrument
evidencing or securing any such Indebtedness having such aggregate outstanding
principal amount, or under which any such
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Indebtedness was incurred, issued or created, beyond any period of grace, if
any, provided with respect thereto if the effect of such failure is either (i)
to cause, or permit the holders of such Indebtedness (or a trustee on behalf of
such holders) to cause, any payment in respect of such Indebtedness to become
due prior to its due date or (ii) to permit the holders of such Indebtedness
(or a trustee on behalf of such holders) to accelerate the maturity of such
indebtedness, whether or not such failure to perform shall be waived by the
holders (or a trustee) of such Indebtedness; or
(f) Judgments. One or more judgments or orders for the payment of
money in an aggregate amount of $2,000,000 shall be rendered against the Company
or any of its Subsidiaries, or any other judgment or order (whether or not for
the payment of money) shall be rendered against or shall affect the Company or
any of its Subsidiaries which causes or could cause a material adverse change in
the business, properties, operations or condition, financial or otherwise, of
the Company or any of its Subsidiaries or which does or could have a material
adverse effect on the legality, validity or enforceability of this Agreement,
the Notes or any Security Document, and either (i) such judgment or order shall
have remained unsatisfied and the Company or such Subsidiary shall not have
taken action necessary to stay enforcement thereof by reason of pending appeal
or otherwise, prior to the expiration of the applicable period of limitations
for taking such action or, if such action shall have been taken, a final order
denying such stay shall have been rendered, or (ii) enforcement proceedings
shall have been commenced by any creditor upon any such judgment or order; or
(g) ERISA. The occurrence of a Reportable Event that results in
or could result in liability of the Company, or any of its Subsidiaries or their
ERISA Affiliates to the PBGC or to any Plan and such Reportable Event is not
corrected within thirty (30) days after the occurrence thereof; or the
occurrence of any Reportable Event which could constitute grounds for
termination of any Plan of the Company, or any of its Subsidiaries or their
ERISA Affiliates by the PBGC or for the appointment by the appropriate United
States District Court of a trustee to administer any such Plan and such
Reportable Event is not corrected within thirty (30) days after the occurrence
thereof; or the filing by the Company, any of its Subsidiaries or any of their
ERISA Affiliates of a notice of intent to terminate a Plan or the institution of
other proceedings to terminate a Plan; or the Company, any of its Subsidiaries
or any of their ERISA Affiliates shall fail to pay when due any liability to the
PBGC or to a Plan; or the PBGC shall have instituted proceedings to terminate,
or to cause a trustee to be appointed to administer, any Plan of the Company,
any of its Subsidiaries or any of their ERISA Affiliates; or any person engages
in a Prohibited Transaction with respect to any Plan which results in or could
result in liability of the Company, any of its Subsidiaries or any of their
ERISA Affiliates, or any Plan of the Company, any of its Subsidiaries or their
ERISA Affiliates or fiduciary of any such Plan; or failure by the Company, any
of its Subsidiaries or any of their ERISA Affiliates to make a required
installment or other payment to any Plan within the meaning of Section 302(f) of
ERISA or Section 412(n) of the Code that results in or could result in liability
of the Company, any of its Subsidiaries or any of their ERISA Affiliates to the
PBGC or any Plan; or the withdrawal of the Company, any of its Subsidiaries or
any of their ERISA Affiliates from a Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(9a)(2) of ERISA; or the
Company, any of its Subsidiaries or any of their ERISA Affiliates becomes an
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employer with respect to any Multiemployer Plan without the prior written
consent of the Required Banks; or
(h) Insolvency, Etc. The Company or any of its Subsidiaries shall
be dissolved or liquidated (or any judgment, order or decree therefor shall be
entered), or shall generally not pay its debts as they become due, or shall
admit in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors, or shall institute, or there
shall be instituted against the Company or any of its Subsidiaries, any
proceeding or case seeking to adjudicate it a bankrupt or insolvent or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief or protection of debtors or seeking the
entry of an order for relief, or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
assets, rights, revenues or property, and, if such proceeding is instituted
against the Company or such Subsidiary and is being contested by the Company or
such Subsidiary, as the case may be, in good faith by appropriate proceedings,
such proceeding shall remain undismissed or unstayed for a period of 60 days; or
the Company or such Subsidiary shall take any action (corporate or other) to
authorize or further any of the actions described above in this subsection; or
any of the Insurance Subsidiaries shall become subject to (A) any delinquency,
receivership, conservation, supervisory, seizure, rehabilitation or liquidation
proceedings or order, directive or mandate issued by any governmental authority
or (B) any other order, directive or mandate issued by any governmental
authority, which in either case shall remain undismissed or unstayed for a
period of 10 days; or
(i) Security Documents. Any event of default described in any
Security Document shall have occurred and be continuing, or any material
provision of any Security Document shall at any time for any reason cease to be
valid and binding and enforceable against any obliger thereunder, or the
validity, binding effect or enforceability thereof shall be contested by any
person, or any obligor shall deny that it has any or further liability or
obligation thereunder, or any material provision thereof shall be terminated,
invalidated or set aside, or be declared ineffective or inoperative or in any
way cease to give or provide to the Banks and the Agent the benefits purported
to be created thereby; or
(j) Key Management. The Chief Executive Officer of the Company as
of the date hereof shall cease for any reason to serve actively in such
position, whether by reason of death, disability, resignation, action of the
Company's Board of Directors or shareholders or otherwise; or
(k) Regulatory Action. The Company or any of the Insurance
Subsidiaries shall be prohibited by any state board, commission, department,
agency, authority or other regulatory body from issuing insurance policies in
any jurisdiction; or
(l) Maintenance of Catastrophic Reinsurance. The Company or any
of the Insurance Subsidiaries shall fail to maintain such catastrophic
reinsurance as a prudent insurance company would deem necessary; or
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49
(m) Chance in Control. Any Change in Control shall occur; or
(n) Distributions on Trust Preferred Securities. Any Subsidiary
Business Trust shall fail to make any Distributions on Trust Preferred
Securities when due.
6.2 Remedies.
(a) Upon the occurrence and during the continuance of any Event
of Default, the Agent may and, upon being directed to do so by the Required
Banks, shall by notice to the Company terminate the Commitments or declare the
outstanding principal of, and accrued interest on, the Notes and all other
amounts owing under this Agreement to be immediately due and payable, or both,
whereupon the Commitments shall terminate forthwith and all such amounts shall
become immediately due and payable, or both, as the case may be, provided that
in the case of any event or condition described in Section 6.1(h) with respect
to the Company, the Commitments shall automatically terminate forthwith and all
such amounts shall automatically become immediately due and payable without
notice; in all cases without demand, presentment, protest, diligence, notice of
dishonor or other formality, all of which are hereby expressly waived.
(b) The Agent may and, upon being directed to do so by the
Required Banks, shall, in addition to the remedies provided in Section 6.2(a),
exercise and enforce any and all other rights and remedies available to it or
the Banks, whether arising under this Agreement, the Notes or any Security
Document or under applicable law, in any manner deemed appropriate by the Agent,
including suit in equity, action at law, or other appropriate proceedings,
whether for the specific performance (to the extent permitted by law) of any
covenant or agreement contained in this Agreement or in the Notes or any
Security Document or in aid of the exercise of any power granted in this
Agreement, the Notes or any Security Document.
(c) Upon the occurrence and during the continuance of any Event
of Default, each Bank may at any time and from time to time, without notice to
the Company (any requirement for such notice being expressly waived by the
Company) set off and apply against any and all of the obligations of the Company
now or hereafter existing under this Agreement any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Bank to or for the credit or the account
of the Company and any property of the Company from time to time in possession
of such Bank, irrespective of whether or not such Bank shall have made any
demand hereunder and although such obligations may be contingent and unmatured.
The Company hereby grants to the Banks and the Agent a lien on and security
interest in all such deposits, indebtedness and property as collateral security
for the payment and performance of the obligations of the Company under this
Agreement. The rights of such Bank under this Section 6.2(c) are in addition to
other rights and remedies (including, without limitation, other rights of
setoff) which the Banks may have.
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ARTICLE VII.
THE AGENT AND THE BANKS
7.1 Appointment and Authorization. Each Bank hereby irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement, the Notes and the Security
Documents as are delegated to the Agent by the terms hereof or thereof, together
with all such powers as are reasonably incidental thereto. The provisions of
this Article VII are solely for the benefit of the Agent and the Banks, and the
Company shall not have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement,
the Agent shall act solely as agent of the Banks and does not assume and shall
not be deemed to have assumed any obligation towards or relationship of agency
or trust with or for the Company.
7.2 Agent and Affiliates. First Chicago in its capacity as a Bank
hereunder shall have the same rights and powers hereunder as any other Bank and
may exercise or refrain from exercising the same as though it were not the
Agent. First Chicago and its affiliates may (without having to account therefor
to any Bank) accept deposits from, lend money to, and generally engage in any
kind of banking, trust, financial advisory or other business with the Company or
any of its Subsidiaries as if it were not acting as Agent hereunder, and may
accept fees and other consideration therefor without having to account for the
same to the Banks.
7.3 Scope of Agent's Duties. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement, have a fiduciary relationship with any Bank, and no
implied covenants, responsibilities, duties, obligations or liabilities shall be
read into this Agreement or shall otherwise exist against the Agent. As to any
matters not expressly provided for by this Agreement (including, without
limitation, collection and enforcement actions under the Notes and the Security
Documents), the Agent shall not be required to exercise any discretion or take
any action, but the Agent shall take such action or omit to take any action
pursuant to the reasonable written instructions of the Required Banks and may
request instructions from the Required Banks. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, pursuant to the written
instructions of the Required Banks (or all of the Banks, as the case may be, in
accordance with the requirements of this Agreement), which instructions and any
action or omission pursuant thereto shall be binding upon all of the Banks;
provided, however, that the Agent shall not be required to act or omit to act
if, in the judgment of the Agent, such action or omission may expose the Agent
to personal liability or is contrary to this Agreement, the Notes, the Security
Documents or applicable law.
7.4 Reliance bv Agent. The Agent shall be entitled to rely upon
any certificate, notice, document or other communication (including any cable,
telegram, telex, facsimile transmission or oral communication) believed by it to
be genuine and correct and to have been sent or given by or on behalf of a
proper person. The Agent may treat the payee of any Note as the holder thereof
unless and until the Agent receives written notice of the assignment thereof
pursuant to the terms of this Agreement signed by such payee and the Agent
receives the written agreement of the assignee that such assignee is bound
hereby to the same
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extent as if it had been an original party hereto. The Agent may employ agents
(including without limitation collateral agents) and may consult with legal
counsel (who may be counsel for the Company), independent public accountants
and other experts selected by it and shall not be liable to the Banks, except
as to money or property received by it or its authorized agents, for the
negligence or misconduct of any such agent selected by it with reasonable care
or for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
7.5 Default. The Agent shall not be deemed to have knowledge of
the occurrence of any Default or Event of Default, unless the Agent has received
written notice from a Bank or the Company specifying such Default or Event of
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 written notice thereof to
the Banks.
7.6 Liability of Agent. Neither the Agent nor any of its
directors, officers, agents, or employees shall be liable to the Banks for any
action taken or not taken by it or them in connection herewith with the consent
or at the request of the Required Banks or in the absence of its or their own
gross negligence or willful misconduct. 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 (i) any recital, statement, warranty
or representation contained in this Agreement, any Note or any Security
Document, or in any certificate, report, financial statement or other document
furnished in connection with this Agreement, (ii) the performance or observance
of any of the covenants or agreements of the Company, (iii) the satisfaction of
any condition specified in Article II hereof, or (iv) the validity,
effectiveness, legal enforceability, value or genuineness of this Agreement, the
Notes, any Security Document or any other instrument or document furnished in
connection herewith.
7.7 Nonreliance on Agent and Other Banks. Each Bank acknowledges
and agrees that it has, independently and without reliance on the Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decision in taking or not taking action under this Agreement. The Agent shall
not be required to keep itself informed as to the performance or observance by
the Company of this Agreement, the Notes or the Security Documents or any other
documents referred to or provided for herein or to inspect the properties or
books of the Company and, except for notices, reports and other documents and
information expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Bank with any information concerning the affairs, financial condition or
business of the Company or any of its Subsidiaries which may come into the
possession of the Agent or any of its affiliates.
7.8 Indemnification. The Banks agree to indemnify the Agent (to
the extent not reimbursed by the Company, but without limiting any obligation of
the Company to make such reimbursement), ratably according to the respective
principal amounts of the Loans then
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outstanding made by each of them (or if no Loans are at the time outstanding,
ratably according to the respective amounts of their Commitments), from and
against any and all claims, damages, losses, liabilities, costs or expenses of
any kind or nature whatsoever (including, without limitation, fees and
disbursements of counsel) which may be imposed on, incurred by, or asserted
against the Agent in any way relating to or arising out of this Agreement or
the transactions contemplated hereby or any action taken or omitted by the
Agent under this Agreement, provided, however' that no Bank shall be liable for
any portion of such claims, damages, losses, liabilities, costs or expenses
resulting from the Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Bank agrees to reimburse the Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including
without limitation fees and expenses of counsel) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, to the extent that the Agent is not
reimbursed for such expenses by the Company, but without limiting the
obligation of the Company to make such reimbursement. Each Bank agrees to
reimburse the Agent promptly upon demand for its ratable share of any amounts
owing to the Agent by the Banks pursuant to this Section. If the indemnity
furnished to the Agent under this Section shall, in the judgment of the Agent,
be insufficient or become impaired, the Agent may call for additional indemnity
from the Banks and cease, or not commence, to take any action until such
additional indemnity is furnished.
7.9 Successor Agent. The Agent may resign as such at any time upon
ten days' prior written notice to the Company and the Banks. In the event of any
such resignation, the Banks shall, by an instrument in writing delivered to the
Company and the Agent, appoint a successor, which shall be a commercial bank
organized under the laws of the United States or any State thereof and having a
combined capital and surplus of at least $500,000,000. If a successor is not so
appointed or does not accept such appointment before the Agent's resignation
becomes effective, the retiring Agent may appoint a temporary successor to act
until such appointment by the Banks is made and accepted or if no such temporary
successor is appointed as provided above by the retiring Agent, the Banks shall
thereafter perform all the duties of the Agent hereunder until such appointment
by the Banks is made and accepted. Any successor to the Agent shall execute and
deliver to the Company and the Banks an instrument accepting such appointment
and thereupon such successor Agent, without further act, deed, conveyance or
transfer shall become vested with all of the properties, rights, interests,
powers, authorities and obligations of its predecessor hereunder with like
effect as if originally named as Agent hereunder. Upon request of such successor
Agent, the Company and the retiring Agent shall execute and deliver such
instruments of conveyance, assignment and further assurance and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in such successor Agent all such properties, rights, interests,
powers, authorities and obligations. The provisions of this Article VII shall
thereafter remain effective for such retiring Agent with respect to any actions
taken or omitted to be taken by such Agent while acting as the Agent hereunder.
7.10 Sharing of Pavments. The Banks agree among themselves that, in
the event that any Bank shall obtain payment in respect of any Loan or any other
obligation owing to
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53
the Banks under this Agreement through the exercise of a right of set-off,
banker's lien, counterclaim or otherwise in excess of its ratable share of
payments received by all of the Banks on account of the Loans and other
obligations (or if no Loans are outstanding, ratably according to the
respective amounts of the Commitments), such Bank shall promptly purchase from
the other Banks participations in such Loans and other obligations in such
amounts, and make such other adjustments from time to time, as shall be
equitable to the end that all of the Banks share such payment in accordance
with such ratable shares. The Banks further agree among themselves that if
payment to a Bank obtained by such Bank through the exercise of a right of
set-off, banker's lien, counterclaim or otherwise aforesaid shall be rescinded
or must otherwise be restored, each Bank which shall have shared the benefit of
such payment shall, by repurchase of participations theretofore sold, return
its share of that benefit to each Bank whose payment shall have been rescinded
or otherwise restored. The Company agrees that any Bank so purchasing such a
participation may, to the fullest extent permitted by law, exercise all rights
of payment, including set-off, banker's lien or counterclaim, with respect to
such participation as fully as if such Bank were a holder of such Loan or other
obligation in the amount of such participation. The Banks further agree among
themselves that, in the event that amounts received by the Banks and the Agent
hereunder are insufficient to pay all such obligations or insufficient to pay
all such obligations when due, the fees and other amounts owing to the Agent in
such capacity shall be paid therefrom before payment of obligations owing to
the Banks under this Agreement. Except as otherwise expressly provided in this
Agreement, if any Bank or the Agent shall fail to remit to the Agent or any
other Bank an amount payable by such Bank or the Agent to the Agent or such
other Bank pursuant to this Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Agent or such
other Bank at a rate per annum equal to the rate at which borrowings are
available to the payee in its overnight federal funds market. It is further
understood and agreed among the Banks and the Agent that if the Agent shall
engage in any other transactions with the Company and shall have the benefit of
any collateral or security therefor which does not expressly secure the
obligations arising under this Agreement except by virtue of a so-called
dragnet clause or comparable provision, the Agent shall be entitled to apply
any proceeds of such collateral or security first in respect of the obligations
arising in connection with such other transaction before application to the
obligations arising under this Agreement.
7.11 The Co-Agents. Notwithstanding anything in this Agreement to
the contrary, none of the Co-Agents, in such capacity, shall have any rights,
powers, duties, responsibilities or obligations, provided that each of Comerica
Bank, First National Bank of Omaha and First Bank, N.A., in its capacity as a
Bank, shall have the same rights and powers hereunder as any other Bank and may
exercise or refrain from exercising the same as though it were not a Co-Agent.
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ARTICLE VIII.
MISCELLANEOUS
8.1 Amendments, Etc.
(a) This Agreement may be amended from time to time and any
provision hereof may be waived by the parties hereto. No such amendment,
modification, termination or waiver of any provision of this Agreement nor any
consent to any departure therefrom shall be effective unless the same shall be
in writing and signed by the Company and the Required Banks and, to the extent
any rights or duties of the Agent may be affected thereby, the Agent, provided,
however, that no such amendment, modification, termination, waiver or consent
shall, without the consent of the Agent and all of the Banks, (i) authorize or
permit the extension of time for, or any reduction of the amount of, any payment
of the principal of, or interest on, the Notes, or any fees or other amount
payable hereunder, (ii) amend, extend or terminate the Termination Date or the
respective Commitment of any Bank or modify the provisions of this Section
regarding the taking of any action under this Section or the provisions of
Section 7.10 or the definition of Required Banks or any provision of this
Agreement requiring the consent of all of the Banks, (iii) provide for the
release of any guaranty or discharge of any collateral subject to any Security
Document, or (iv) modify any other provision of this Agreement which by its
terms requires the consent of all of the Banks.
(b) Any such amendment, waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
(c) Notwithstanding anything herein to the contrary, no Bank that
is in default of any of its obligations, covenants or agreements under this
Agreement shall be entitled to vote (whether to consent or to withhold its
consent) with respect to any amendment, modification, termination or waiver of
any provision of this Agreement or any departure therefrom or any direction from
the Banks to the Agent, and, for purposes of determining the Required Banks at
any time when any of the Banks are in default under this Agreement, the
Commitments and Loans of such defaulting Banks shall be disregarded.
8.2 Notices. (a) Except as otherwise provided in Section 8.2(c)
hereof, all notices and other communications hereunder shall be in writing and
shall be delivered or sent to the Company at Suite 600 North, ▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Facsimile No.
(▇▇▇) ▇▇▇-▇▇▇▇, Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇, and to the Agent and the Banks at
the respective addresses for notices set forth on the signatures pages hereof,
or to such other address as may be designated by the Company, the Agent or any
Bank by notice to the other parties hereto. All notices and other communications
shall be deemed to have been given at the time of actual delivery thereof to
such address, or, unless sooner delivered, (i) if sent by certified or
registered mail, postage prepaid, to such address, on the third day after the
date of mailing, (ii) if sent by telex, upon receipt of the appropriate
answerback, or (iii) if sent by facsimile transmission, upon condonation of
receipt by telephone at the number specified for confirmation, provided,
however, that notices to the Agent shall not be effective until received.
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(b) Notices by the Company to the Agent with respect to
terminations or reductions of the Commitments pursuant to Section 2.2, requests
for Borrowings pursuant to Section 2.4, and requests for continuations or
conversions of Borrowings pursuant to Section 2.7 shall be irrevocable and
binding on the Company.
(c) Any notice to be given by the Company to the Agent pursuant
to Sections 2.2, 2.4 or 2.7 and any notice to be given by the Agent or any Bank
hereunder, may be given by telephone, and all such notices given by the Company
must be immediately confirmed in writing in the manner provided in Section
8.2(a). Any such notice given by telephone shall be deemed effective upon
receipt thereof by the party to whom such notice is to be given.
8.3 No Waiver By Conduct; Remedies Cumulative. No course of
dealing on the part of the Agent or any Bank, nor any delay or failure on the
part of the Agent or any Bank in exercising any right, power or privilege
hereunder shall operate as a waiver of such right, power or privilege or
otherwise prejudice the Agent's or such Bank's rights and remedies hereunder;
nor shall any single or partial exercise thereof preclude any further exercise
thereof or the exercise of any other right, power or privilege. No right or
remedy conferred upon or reserved to the Agent or any Bank under this Agreement,
the Notes or any Security Document is intended to be exclusive of any other
right or remedy, and every right and remedy shall be cumulative and in addition
to every other right or remedy granted thereunder or now or hereafter existing
under any applicable law. Every right and remedy granted by this Agreement, the
Notes or any Security Document or by applicable law to the Agent or any Bank may
be exercised from time to time and as often as may be deemed expedient by the
Agent or any Bank and, unless contrary to the express provisions of this
Agreement, any Security Document, irrespective of the occurrence or continuance
of any Default or Event of Default.
8.4 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of the Company made herein
or in any Security Document or in any certificate, report, financial statement
or other document furnished by or on behalf of the Company in connection with
this Agreement shall be deemed to be material and to have been relied upon by
the Banks, notwithstanding any investigation heretofore or hereafter made by any
Bank or on such Bank's behalf, and those covenants and agreements of the Company
set forth in Sections 3.6, 3.8 and 8.5 hereof shall survive the repayment in
full of the Notes and the termination of the Commitments.
8.5 Expenses; Indemnification.
(a) The Company agrees to pay, or reimburse the Agent for the
payment of, on demand, (i) the reasonable fees and expenses of counsel to the
Agent, including without limitation the fees and expenses of Messrs. Dickinson,
Wright, Moon, Van Dusen & ▇▇▇▇▇▇▇, in connection with the preparation,
execution, delivery and administration of this Agreement, the Notes and the
Security Documents and in connection with advising the Agent as to its rights
and responsibilities with respect thereto, (ii) the reasonable fees of counsel
to the Agent in connection with any amendments, waivers or consents in
connection therewith, (iii) all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery,
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filing or recording of this Agreement, the Notes or the Security Documents (or
the verification of filing, recording, perfection or priority thereof) or the
consummation of the transactions contemplated hereby, and any and all
liabilities with respect to or resulting from any delay in paying or omitting
to pay such taxes or fees, and (iv) all reasonable costs and expenses of the
Agent and the Banks (including reasonable fees and expenses of counsel and
whether incurred through negotiations, legal proceedings or otherwise) in
connection with any Default or Event of Default or the enforcement of, or the
exercise or preservation of any rights under, this Agreement, the Notes or any
Security Document or in connection with any refinancing or restructuring of the
credit arrangements provided under this Agreement.
(b) The Company hereby indemnifies and agrees to hold harmless
the Banks and the Agent, and their respective officers, directors, employees and
agents, from and against any and all claims, damages, losses, liabilities, costs
or expenses of any kind or nature whatsoever (including reasonable attorneys
fees and disbursements incurred in connection with any investigative,
administrative or judicial proceeding whether or not such person shall be
designated as a party thereto) which the Banks or the Agent or any such person
may incur or which may be claimed against any of them by reason of or in
connection with entering into this Agreement or the transactions contemplated
hereby, including without limitation those arising under Environmental Laws;
provided, however, that the Company shall not be required to indemnify any such
Bank and the Agent or such other person, to the extent, but only to the extent,
that such claim, damage, loss, liability, cost or expense is attributable to the
gross negligence or willful misconduct of such Bank or the Agent, as the case
may be.
8.6 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns, provided that
the Company may not, without the prior written consent of the Banks, assign its
rights or obligations hereunder or under the Notes or any Security Document and
the Banks shall not be obligated to make any Loan hereunder to any entity other
than the Company.
(b) Any Bank may, with the prior written consent (which shall not
be unreasonably withheld) of the Company, sell to any financial institution or
institutions, and such financial institution or institutions may further sell, a
participation interest (undivided or divided) in, the Loans and such Bank's
rights and benefits under this Agreement, the Notes and the Security Documents,
and to the extent of that participation interest such participant or
participants shall have the same rights and benefits against the Company under
Section 3.6, 3.8 and 6.2(c) as it or they would have had if such participant or
participants were such Bank making the Loans to the Company hereunder, provided,
however, that (i) such Bank's obligations under this Agreement shall remain
unmodified and fully effective and enforceable against such Bank, (ii) such Bank
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) such Bank shall remain the holder of its Notes for
all purposes of this Agreement, (iv) the Company, the Agent and the other Banks
shall continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement, and (v) such Bank shall
not grant to its participant any rights to consent or withhold
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consent to any action taken by such Bank, or the Agent under this Agreement
other than action requiring the consent of all of the Banks hereunder.
(c) The Agent from time to time in its sole discretion may
appoint agents for the purpose of servicing and administering this Agreement and
the transactions contemplated hereby and enforcing or exercising any rights or
remedies of the Agent provided under this Agreement, the Notes, any Security
Documents or otherwise. In furtherance of such agency, the Agent may from time
to time direct that the Company and the Guarantors provide notices, reports and
other documents contemplated by this Agreement (or duplicates thereof) to such
agent. The Company hereby consents to the appointment of such agent and agrees
to provide all such notices, reports and other documents and to otherwise deal
with such agent acting on behalf of the Agent in the same manner as would be
required if dealing with the Agent itself.
(d) Each Bank may, with the prior written consent (which shall
not be unreasonably withheld) of the Agent and the Company, assign to one or
more banks or other entities all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment, the Loans owing to it and the Notes held by it); provided, however,
that (i) each such assignment shall be of a uniform, and not a varying,
percentage of all rights and obligations of such Bank under this Agreement with
respect to its Commitment and Loans and otherwise, (ii) except in the case of an
assignment of all of a Bank's rights and obligations under this Agreement, the
amount of the Commitments of the assigning Bank being assigned pursuant to each
such assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000, and in
integral multiples of $1,000,000 thereafter, or such lesser amount as to which
the Company and the Agent may consent, (iii) the parties to each such assignment
shall execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance in the form of Exhibit J hereto (an
"Assignment and Acceptance"), together with the Note subject to such assignment
and a processing and recordation fee of $3,500, and (iv) any Bank may without
the consent of the Company or the Agent, and without paying any fee, assign to
any Affiliate of such Bank that is a bank or financial institution all of its
rights and obligations under this Agreement. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in such
Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, have the rights and obligations
of a Bank hereunder and (y) the Bank assignor thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the remaining portion of an assigning Bank's rights
and obligations under this Agreement, such Bank shall cease to be a party
hereto).
(e) BY executing and delivering an Assignment and Acceptance, the
Bank assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Bank makes no representation
or warranty and assumes no
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responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement
or any other instrument or document furnished pursuant hereto; (ii) such
assigning Bank makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Company or the
performance or observance by the Company of any of its obligations under this
Agreement or any other instrument or document furnished pursuant hereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the financial statements referred to in Section 4.6 and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the Agent, such
assigning Bank or any other Bank and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v) such
assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers and discretion under this Agreement as are
delegated to the Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vi) such assignee agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of this Agreement are required to be performed by it as a Bank.
(f) The Agent shall maintain at its address designated on the
signature pages hereof a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Banks and the Commitment of, and principal amount of the Loans owing to,
each Bank from time to time (the "Register"). The entries in the Register shall
be conclusive and binding for all purposes, absent manifest error, and the
Company, the Agent and the Banks may treat each person whose name is recorded in
the Register as a Bank hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Company or any Bank at any
reasonable time and from time to time upon reasonable prior notice.
(g) Upon its receipt of an Assignment and Acceptance executed by
an assigning Bank and an assignee, and consented to by the Agent and the
Company, if applicable, together with the Note subject to such assignment, the
Agent shall, if such Assignment and Acceptance has been completed, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the Company. Within five
Business Days after its receipt of such notice, the Company, at its own expense,
shall execute and deliver to the Agent in exchange for the surrendered Note a
new Note to the order of such assignee in an amount equal to the Commitment
assumed by it pursuant to such Assignment and Acceptance and, if the assigning
Bank has retained a Commitment hereunder, a new Note to the order of the
assigning Bank in an amount equal to the aggregate Commitment retained by it
hereunder. Such new Note(s) shall be in an aggregate principal amount equal to
the aggregate principal amount of such surrendered Note, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A hereto.
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(h) The Company shall not be liable for any costs or expenses of
any Bank in effectuating any participation or assignment under this Section 8.6.
(i) The Banks may, in connection with any participation or
assignment or proposed participation or assignment pursuant to this Section 8.6,
disclose to the participant or assignee or proposed participant or assignee any
information relating to the Company and its Subsidiaries.
(j) Notwithstanding any other provision set forth in this
Agreement, (i) if any Event of Default shall have occurred and be continuing,
the consent of the Company shall not be required for any sale of a participation
interest under Section 8.6(b) or assignment under 8.6(d), and (ii) any Bank may
at any time create a security interest in, or assign, all or any portion of its
rights under this Agreement (including, without limitation, the Loans owing to
it and the Note held by it) in favor of any Federal Reserve Bank in accordance
with Regulation A of the Board of Governors of the Federal Reserve System;
provided that such creation of a security interest or assignment shall not
release such Bank from its obligations under this Agreement.
8.7 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.8 Governing Law. This Agreement is a contract made under, and
shall be governed by and construed in accordance with, the law of the
State of Illinois applicable to contracts made and to be performed entirely
within such State and without giving effect to choice of law principles of such
State. The Company and the Banks further agree that any legal or equitable
action or proceeding with respect to this Agreement, the Notes or any Security
Document or the transactions contemplated hereby may be brought in any court of
the State of Illinois, or in any court of the United States of America sitting
in Illinois, and the Company and the Banks hereby submit to and accept generally
and unconditionally the jurisdiction of those courts with respect to its person
and property, and, in the case of the Company, irrevocably consents to the
service of process in connection with any such action or proceeding by personal
delivery to such agent or to the Company, as the case may be, or by the mailing
thereof by registered or certified mail, postage prepaid to the Company at its
address for notices pursuant to Section 8.2. Nothing in this paragraph shall
affect the right of the Banks and the Agent to serve process in any other manner
permitted by law or limit the right of the Banks or the Agent to bring any such
action or proceeding against the Company or property in the courts of any other
jurisdiction. The Company and the Banks hereby irrevocably waive any objection
to the laying of venue of any such action or proceeding in the above described
courts.
8.9 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for the convenience of reference
only and shall in no way modify any of the terms or provisions hereof.
8.10 Construction of Certain Provisions. If any provision of this
Agreement refers to any action to be taken by any person, or which such person
is prohibited from taking,
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60
such provision shall be applicable whether such action is taken directly or
indirectly by such person, whether or not expressly specified in such
provision.
8.11 Integration and Severability. This Agreement embodies the entire
agreement and understanding between the Company and the Agent and the Banks, and
supersedes all prior agreements and understandings, relating to the subject
matter hereof. In case any one or more of the obligations of the Company under
this Agreement, the Notes or any Security Document shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining obligations of the Company shall not in any way be affected or
impaired thereby, and such invalidity, illegality or unenforceability in one
jurisdiction shall not affect the validity, legality or enforceability of the
obligations of the Company under this Agreement, the Notes or any Security
Document in any other jurisdiction.
8.12 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any such covenant, the fact that it would be permitted by an exception to, or
would be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default or an Event of Default if such action is taken or
such condition exists.
8.13 Interest Rate Limitation. Notwithstanding any provisions of this
Agreement, the Notes or any Security Document, in no event shall the amount of
interest paid or agreed to be paid by the Company exceed an amount computed at
the highest rate of interest permissible under applicable law. If, from any
circumstances whatsoever, fulfillment of any provision of this Agreement, the
Notes or any Security Document at the time performance of such provision shall
be due, shall involve exceeding the interest rate limitation validly prescribed
by law which a court of competent jurisdiction may deem applicable hereto, then,
ipso facto, the obligations to be fulfilled shall be reduced to an amount
computed at the highest rate of interest permissible under applicable law, and
if for any reason whatsoever any Bank shall ever receive as interest an amount
which would be deemed unlawful under such applicable law such interest shall be
automatically applied to the payment of principal of the Loans outstanding
hereunder (whether or not then due and payable) and not to the payment of
interest, or shall be refunded to the Company if such principal and all other
obligations of the Company to the Banks and the Agent have been paid in full.
8.14 WAIVER OF JURY TRIAL. THE BANKS AND THE AGENT AND THE COMPANY,
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO
A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR
ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF ANY OF THEM. NEITHER ANY BANK OR THE AGENT NOR THE
COMPANY SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION
IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A
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JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE
DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY ANY PARTY HERETO
EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY SUCH PARTY.
[This rest of this page intentionally left blank. Signature blocks begin on
next page.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered on the 6th day of June, 1997, which shall be
the Effective Date of this Agreement, notwithstanding the day and year first
above written.
ACCEPTANCE INSURANCE COMPANIES INC.
By: [SIG]
-------------------------------
Its: VP
-----------------------------
Commitment Amount: $25,000,000 THE FIRST NATIONAL BANK OF
CHICAGO, as a Bank and as Agent
By:
--------------------------------
Its: Vice President
Address for Notices:
One First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Confirmation No.:(▇▇▇) ▇▇▇-▇▇▇▇
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the 6th day of June, 1997, which shall be the
Effective Date of this Agreement, notwithstanding the day and year first above
written.
ACCEPTANCE INSURANCE
COMPANIES INC.
By:
---------------------------
Its:
-----------------------
Commitment Amount: $25,000,000 THE FIRST NATIONAL BANK OF
CHICAGO, as a Bank and as Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Its: Vice President
Address for Notices:
One First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Confirmation No.:
(▇▇▇) ▇▇▇-▇▇▇▇
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Commitment Amount: $22,000,000 COMERICA BANK
By: [sig]
-------------------------
Its: Vice President
Address for Notices:
Comerica Bank
One Detroit Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Confirmation No.:
(▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $16,000,000 FIRST NATIONAL BANK OF OMAHA
By:
-------------------------
Its: Vice President
Address for Notices:
First National Bank of Omaha
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telex No.: 484410
Answerback: FIRSTNATBK-OMA
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Confirmation No.:
(▇▇▇) ▇▇▇-▇▇▇▇
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Commitment Amount: $22,000,000 COMERICA BANK
By:
-------------------------
Its: Vice President
Address for Notices:
Comerica Bank
One Detroit Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $16,000,000 FIRST NATIONAL BANK OF OMAHA
By: /s/ ▇. ▇. ▇▇▇▇▇▇
---------------------------------
Its: Vice President
Address for Notices:
First National Bank of Omaha
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telex No.: 484410
Answerback: FIRSTNATBK-OMA
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
-▇▇-
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇: $ 15,000,000 FIRST BANK, N.A.
By: [SIG]
-----------------------
Its: Sr. Vice President
Address for Notices:
First Bank, N.A.
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount:$12,000,000 ▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION
By:
------------------------
Its: Vice President
Address for Notices:
▇▇▇▇▇ Fargo Bank, National Association
Corporate Lending Division
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
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Commitment Amount: $15,000,000 FIRST- BANK, N.A.
By:
-------------------------
Its: Vice President
Address for Notices:
First Bank, N.A.
1700 Farnam
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Confumation No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $12,000,000 ▇▇▇▇▇ FARGO BANK,NATIONAL
ASSOCIATION
By: [SIG]
---------------------
Its: Vice President
Address for Notices:
▇▇▇▇▇ Fargo Bank, National Association
Corporate Lending Division
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
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Commitment Amount: $10,000,000 MERCANTILE BANK, N.A.
By: [SIG]
-------------------------------------
Its: Vice President
Address for Notices:
Mercantile Bank N.A.
One Mercantile Center
7th & Washington, Tram ▇▇-▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
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