AMENDED AND RESTATED CREDIT AGREEMENT
among
FREMONT GENERAL CORPORATION,
VARIOUS LENDING INSTITUTIONS,
and
THE CHASE MANHATTAN BANK, N.A.,
AS AGENT
-----------------------------
Dated as of August 24, 1995
-----------------------------
$200,000,000
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TABLE OF CONTENTS
Page
SECTION 1. Amount and Terms of Credit................................1
1.01 Commitments...............................................1
1.02 Minimum Amount of Each Borrowing; Maximum
Number of Borrowings.......................................2
1.03 Notice of Borrowing of Loans..............................2
1.04 Competitive Bid Borrowings................................3
1.05 Disbursement of Funds.....................................5
1.06 Notes; Register...........................................6
1.07 Conversions...............................................7
1.08 Pro Rata Borrowings.......................................8
1.09 Interest..................................................8
1.10 Interest Periods..........................................9
1.11 Increased Costs, Illegality, etc.........................10
1.12 Compensation.............................................13
1.13 Change of Lending Office.................................14
SECTION 2. Fees; Commitments........................................14
2.01 Fees.....................................................14
2.02 Voluntary Reduction of Commitments.......................14
2.03 Mandatory Reduction of Commitments.......................15
SECTION 3. Payments.................................................15
3.01 Voluntary Prepayments....................................15
3.02 Mandatory Prepayments and Repayments.....................16
3.03 Method and Place of Payment..............................17
3.04 Net Payments.............................................18
SECTION 4. Conditions Precedent.....................................19
4.01 Conditions Precedent to Amendment and
Restatement...........................................19
4.02 Conditions Precedent to Borrowings....................23
SECTION 5. Representations, Warranties and
Agreements...............................................24
5.01 Corporate Status.........................................24
5.02 Corporate Power and Authority............................24
5.03 No Violation.............................................25
5.04 Litigation...............................................25
(i)
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Page
5.05 Use of Proceeds..........................................25
5.06 Governmental Approvals...................................26
5.07 Investment Company Act...................................26
5.08 Public Utility Holding Company Act.......................26
5.09 True and Complete Disclosure.............................27
5.10 Financial Condition; Financial Statements................27
5.11 Security Interests.......................................28
5.12 Tax Returns and Payments.................................28
5.13 Compliance with ERISA....................................29
5.14 Subsidiaries.............................................29
5.15 Intellectual Property....................................30
5.16 Pollution and Other Regulations..........................31
5.17 Properties...............................................31
5.18 Labor Relations; Collective Bargaining
Agreements................................................31
5.19 Capitalization...........................................32
5.20 Indebtedness.............................................32
5.21 Compliance with Statutes, etc............................32
SECTION 6. Affirmative Covenants....................................32
6.01 Information Covenants....................................33
6.02 Books, Records and Inspections...........................39
6.03 Insurance................................................40
6.04 Payment of Taxes.........................................40
6.05 Corporate Franchises.....................................40
6.06 Compliance with Statutes, etc............................40
6.07 ERISA....................................................40
6.08 Performance of Obligations...............................41
6.09 Good Repair..............................................42
6.10 End of Fiscal Years; Fiscal Quarters.....................42
6.11 NAIC Tests...............................................42
SECTION 7. Negative Covenants.......................................42
7.01 Changes in Business......................................42
7.02 Consolidation, Merger, Sale or Purchase of
Assets, etc...............................................43
7.03 Liens....................................................44
7.04 Indebtedness.............................................47
7.05 Investments..............................................49
7.06 Prepayments and Modifications of Permitted
Subordinated Debt and Liquid Yield Option
Notes.....................................................50
7.07 Restrictions on Subsidiary Payments......................51
7.08 Transactions with Affiliates.............................52
7.09 Issuance of Stock........................................52
7.10 Liabilities to Policyholder Surplus Ratio................52
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Page
7.11 Net Premiums Written Ratio...............................52
7.12 Leverage Ratio...........................................52
7.13 Minimum Consolidated Net Worth...........................52
7.14 Interest Coverage Ratio..................................52
7.15 FIC Consolidated Surplus.................................53
7.16 Insured Depository Subsidiaries..........................53
7.17 Permitted CIC Acquisition Subordinated
Note......................................................53
SECTION 8. Events of Default........................................53
8.01 Payments.................................................53
8.02 Representations, etc.....................................53
8.03 Covenants................................................54
8.04 Default Under Other Agreements...........................54
8.05 Bankruptcy, etc..........................................54
8.06 ERISA....................................................55
8.07 Pledge Agreement.........................................56
8.08 Judgments................................................56
8.09 Ownership................................................56
SECTION 9. Definitions..............................................57
SECTION 10. The Agent...............................................77
10.01 Appointment.............................................77
10.02 Delegation of Duties....................................77
10.03 Exculpatory Provisions..................................77
10.04 Reliance by Agent.......................................78
10.05 Notice of Default.......................................78
10.06 Non-Reliance on Agent and Other Banks...................79
10.07 Indemnification.........................................79
10.08 Agent in Its Individual Capacity........................80
10.09 Resignation of the Agent; Successor Agent...............80
SECTION 11. Miscellaneous...........................................81
11.01 Payment of Expenses, etc................................81
11.02 Right of Setoff.........................................81
11.03 Notices.................................................82
11.04 Benefit of Agreement....................................82
11.05 No Waiver; Remedies Cumulative..........................84
11.06 Payments Pro Rata.......................................84
11.07 Calculations; Computations..............................85
11.08 Governing Law; Submission to Jurisdiction;
Venue.................................................85
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11.09 Counterparts............................................86
11.10 Headings Descriptive....................................86
11.11 Amendment or Waiver.....................................86
11.12 Survival................................................87
11.13 Domicile of Loans.......................................87
11.14 Confidentiality.........................................87
11.15 WAIVER OF JURY TRIAL....................................88
ANNEX I -- List of Banks and Commitments
ANNEX II -- Bank Addresses
ANNEX III -- Subsidiaries
ANNEX IV -- Collective Bargaining Agreements
ANNEX V -- Existing Indebtedness
ANNEX VI -- Existing Liens
EXHIBIT A-1 -- Form of Notice of Borrowing
EXHIBIT A-2 -- Form of Notice of Competitive Bid
Borrowing
EXHIBIT B -- Form of Note
EXHIBIT C-1 -- Form of Opinion of Wilson, Sonsini,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
EXHIBIT C-2 -- Form of Opinion of ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
EXHIBIT C-3 -- Form of Opinion of White & Case
EXHIBIT D -- Form of Officer's Certificate
EXHIBIT E -- Form of Amended and Restated Pledge
Agreement
EXHIBIT F -- Form of Assignment and Assumption
Agreement
EXHIBIT G -- Form of CT Corporation Consent Letter
(iv)
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 24,
1995, among FREMONT GENERAL CORPORATION, a Nevada corporation (the "Borrower"),
the lending institutions listed from time to time on Annex I hereto (each a
"Bank" and, collectively, the "Banks"), and THE CHASE MANHATTAN BANK, N.A., as
Agent (the "Agent"). Unless otherwise defined herein, all capitalized terms used
herein and defined in Section 9 are used herein as so defined.
W I T N E S S E T H :
WHEREAS, the Borrower, the Agent and certain of the Banks have
previously entered into a Credit Agreement, dated as of August 11, 1994, as
amended by the First Amendment, dated as of December 16, 1994 (such Credit
Agreement, as so amended, the "Existing Credit Agreement"); and
WHEREAS, the Borrower, the Agent and the Banks wish to amend and
restate the Existing Credit Agreement upon the terms and conditions set forth
herein;
NOW, THEREFORE, IT IS AGREED THAT, upon satisfaction or waiver of
the conditions precedent set forth in Section 4.01, the Existing Credit
Agreement shall be amended and restated in its entirety to read as follows:
SECTION 1. Amount and Terms of Credit.
1.01 Commitments. (a) Subject to and upon the terms and conditions
herein set forth, each Bank severally agrees to make a loan or loans (each a
"Loan" and, collectively, the "Loans") to the Borrower, which Loans (i) shall be
made at any time and from time to time on and after the Amendment Effective Date
and prior to the Conversion Date, (ii) may, at the option of the Borrower, be
incurred and maintained as, and/or converted into, Base Rate Loans or Eurodollar
Loans, provided that all Loans made by all Banks pursuant to the same Borrowing
shall, unless otherwise specifically provided herein, consist entirely of Loans
of the same Type, (iii) prior to the Conversion Date, may be repaid and
reborrowed in accordance with the provisions hereof, (iv) on and after the
Conversion Date, shall be repaid in accordance with the provisions hereof, (v)
prior to the Conversion Date, shall not exceed for any Bank at any time
outstanding that aggregate principal amount which equals (A) if the Permitted
CIC Acquisition Subordinated Note has been repaid in full, the Commitment of
such Bank at such time or (B) if the Permitted CIC Acquisition Subordinated Note
has not been repaid in full, the Commitment of such Bank at such time less such
Bank's Percentage of $50,000,000 and (vi)
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prior to the Conversion Date, shall not exceed in the aggregate for all Banks at
any time outstanding that aggregate principal amount which, when added to the
then aggregate outstanding principal amount of all Competitive Bid Loans, equals
(A) if the Permitted CIC Acquisition Subordinated Note has been repaid in full,
the Total Commitment at such time or (B) if the Permitted CIC Acquisition
Subordinated Note has not been repaid in full, the Total Commitment at such time
less $50,000,000.
(b) Subject to and upon the terms and conditions herein set forth,
each Bank severally agrees that the Borrower may incur a loan or loans (each a
"Competitive Bid Loan" and collectively, the "Competitive Bid Loans") pursuant
to a Competitive Bid Borrowing at any time and from time to time on and after
the Amendment Effective Date and prior to the date which is the third Business
Day preceding the date which is 14 days prior to the Conversion Date, provided
that after giving effect to any Competitive Bid Borrowing and the use of the
proceeds thereof, the aggregate outstanding principal amount of Competitive Bid
Loans, when combined with the then aggregate outstanding principal amount of all
Loans, shall not exceed (A) if the Permitted CIC Acquisition Subordinated Note
has been repaid in full, the Total Commitment at such time or (B) if the
Permitted CIC Acquisition Subordinated Note has not been repaid in full, the
Total Commitment at such time less $50,000,000.
1.02 Minimum Amount of Each Borrowing; Maximum Number of
Borrowings. The aggregate principal amount of each Borrowing hereunder shall not
be less than (i) $5,000,000, in the case of Loans, and (ii) $10,000,000, in the
case of Competitive Bid Loans, and, if in excess thereof, shall be in an
integral multiple of $1,000,000. More than one Borrowing may be incurred on any
day; provided that at no time shall there be outstanding more than six
Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing of Loans. (a) Whenever the Borrower
desires to incur Loans hereunder, it shall give the Agent at its Notice Office,
(x) in the case of a Borrowing of Eurodollar Loans, written notice (or
telephonic notice promptly confirmed in writing) of such proposed Borrowing
which notice must be given prior to 12:00 Noon (New York time) at least three
Business Days prior to the date of such proposed Borrowing and (y) in the case
of a Borrowing of Base Rate Loans, written notice (or telephonic notice promptly
confirmed in writing) of such proposed Borrowing, which notice must be given
prior to 11:00 A.M. (New York time) at least one Business Day prior to the date
of such proposed Borrowing. Each such notice (each, a "Notice of Borrowing"),
except as otherwise expressly provided in Section 1.11, shall be irrevocable,
and, in the case of a
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written notice or a confirmation of telephonic notice, shall be in the form of
Exhibit A-1 hereto, appropriately completed to specify (i) the aggregate
principal amount of the Loans to be made pursuant to such Borrowing, (ii) the
date of such Borrowing (which shall be a Business Day) and (iii) whether the
respective Borrowing shall consist of Base Rate Loans or Eurodollar Loans and,
if Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Agent shall promptly give each Bank written notice (or telephonic notice
promptly confirmed in writing) of each proposed Borrowing, of such Bank's
proportionate share thereof and of the other matters covered by the Notice of
Borrowing.
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any notice it may give hereunder by telephone, the Agent may
act prior to receipt of written confirmation without liability upon the basis of
such telephonic notice, believed by the Agent in good faith to be from an
Authorized Officer of the Borrower. In each such case the Borrower hereby waives
the right to dispute the Agent's record of the terms of any such telephonic
notice.
1.04 Competitive Bid Borrowings. (a) Whenever the Borrower desires
to incur a Competitive Bid Borrowing, it shall deliver to the Agent, prior to
12:00 Noon (New York time) (x) at least five Business Days prior to the date of
such proposed Competitive Bid Borrowing, in the case of a Spread Borrowing, and
(y) at least two Business Days prior to the date of such proposed Competitive
Bid Borrowing, in the case of an Absolute Rate Borrowing, a written notice
substantially in the form of Exhibit A-2 hereto (a "Notice of Competitive Bid
Borrowing"), which notice shall specify in each case (i) the date (which shall
be a Business Day) and the aggregate amount of the proposed Competitive Bid
Borrowing, (ii) the maturity date for repayment of each and every Competitive
Bid Loan to be made as part of such Competitive Bid Borrowing (which maturity
date may be (A) one, two, three or six months after the date of such Competitive
Bid Borrowing, in the case of a Spread Borrowing, and (B) between 14 and 364
days, inclusive, after the date of such Competitive Bid Borrowing, in the case
of an Absolute Rate Borrowing, provided that in no event shall the maturity date
of any Competitive Bid Borrowing be later than the third Business Day preceding
the Conversion Date), (iii) the interest payment date or dates relating thereto,
(iv) whether the proposed Competitive Bid Borrowing is to be an Absolute Rate
Borrowing or a Spread Borrowing, and if a Spread Borrowing, the Interest Rate
Basis, and (v) any other terms to be applicable to such Competitive Bid
Borrowing. The Agent shall promptly notify each Bidder Bank by telephone or
facsimile of each such request for a Competitive Bid Borrowing received by it
from the Borrower and of the contents of the related Notice of Competitive Bid
Borrowing.
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(b) Each Bidder Bank shall, if, in its sole discretion, it elects
to do so, irrevocably offer to make one or more Competitive Bid Loans to the
Borrower as part of such proposed Competitive Bid Borrowing at a rate or rates
of interest specified by such Bidder Bank in its sole discretion and determined
by such Bidder Bank independently of each other Bidder Bank, by notifying the
Agent (which shall give prompt notice thereof to the Borrower) before 10:00 A.M.
(New York time) on the date (the "Reply Date") which is (x) in the case of an
Absolute Rate Borrowing, one Business Day before the date of such proposed
Competitive Bid Borrowing and (y) in the case of a Spread Borrowing, four
Business Days before the date of such proposed Competitive Bid Borrowing, of the
minimum amount and maximum amount of each Competitive Bid Loan which such Bidder
Bank would be willing to make as part of such proposed Competitive Bid Borrowing
(which amounts may, subject to the proviso to the first sentence of Section
1.01(b), exceed such Bidder Bank's Commitment), the rate or rates of interest
therefor and such Bidder Bank's lending office with respect to such Competitive
Bid Loan; provided that if the Agent in its capacity as a Bidder Bank shall, in
its sole discretion, elect to make any such offer, it shall notify the Borrower
of such offer before 9:45 A.M. (New York time) on the Reply Date. If any Bidder
Bank shall elect not to make such an offer, such Bidder Bank shall so notify the
Agent, before 10:00 A.M. (New York time) on the Reply Date, and such Bidder Bank
shall not be obligated to, and shall not, make any Competitive Bid Loan as part
of such Competitive Bid Borrowing; provided that the failure by any Bidder Bank
to give such notice shall not cause such Bidder Bank to be obligated to make any
Competitive Bid Loan as part of such proposed Competitive Bid Borrowing.
(c) The Borrower shall, in turn, (x) before 12:00 Noon (New York
time) on the Reply Date in the case of a proposed Absolute Rate Borrowing and
(y) before 12:00 Noon (New York time) on the Business Day following the Reply
Date in the case of a proposed Spread Borrowing, either:
(i) cancel such Competitive Bid Borrowing by giving the Agent
notice to such effect (it being understood and agreed that if the Borrower
gives no such notice of cancellation and no notice of acceptance pursuant
to clause (ii) below, then the Borrower shall be deemed to have cancelled
such Competitive Bid Borrowing), or
(ii) accept one or more of the offers made by any Bidder Bank or
Bidder Banks pursuant to clause (b) above by giving notice (in writing or
by telephone confirmed in writing) to the Agent of the amount of each
Competitive Bid Loan (which amount shall be equal to or greater than the
minimum amount, and equal to or less than the
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maximum amount, notified to the Borrower by the Agent on behalf of such
Bidder Bank for such Competitive Bid Borrowing pursuant to clause (b)
above) to be made by each Bidder Bank as part of such Competitive Bid
Borrowing, and reject any remaining offers made by Bidder Banks pursuant
to clause (b) above by giving the Agent notice to that effect; provided
that the acceptance of offers may only be made on the basis of ascending
Absolute Rates (in the case of an Absolute Rate Borrowing) or Spreads (in
the case of a Spread Borrowing), in each case commencing with the lowest
rate so offered; provided further, however, if offers are made by two or
more Bidder Banks at the same rate and acceptance of all such equal offers
would result in a greater principal amount of Competitive Bid Loans being
accepted than the aggregate principal amount requested by the Borrower, if
the Borrower elects to accept any of such offers the Borrower shall accept
such offers pro rata from such Bidder Banks (on the basis of the maximum
amounts of such offers) unless any such Bidder Bank's pro rata share would
be less than the minimum amount specified by such Bidder Bank in its
offer, in which case the Borrower shall have the right to accept one or
more such equal offers in their entirety and reject the other equal offer
or offers or to allocate acceptance among all such equal offers (but
giving effect to the minimum and maximum amounts specified for each such
offer pursuant to clause (b) above), as the Borrower may elect in its sole
discretion.
(d) If the Borrower notifies the Agent that such Competitive Bid
Borrowing is cancelled, or if such Competitive Bid Borrowing is deemed
cancelled, pursuant to clause (c)(i) above, the Agent shall give prompt notice
thereof to the Bidder Banks and such Competitive Bid Borrowing shall not be
made.
(e) If the Borrower accepts one or more of the offers made by any
Bidder Bank or Bidder Banks pursuant to clause (c)(ii) above, the Agent shall in
turn promptly notify (x) each Bidder Bank that has made an offer as described in
clause (b) above, of the date and aggregate amount of such Competitive Bid
Borrowing and whether or not any offer or offers made by such Bidder Bank
pursuant to clause (b) above have been accepted by the Borrower and (y) each
Bidder Bank that is to make a Competitive Bid Loan as part of such Competitive
Bid Borrowing, of the amount of each Competitive Bid Loan to be made by such
Bidder Bank as part of such Competitive Bid Borrowing.
1.05 Disbursement of Funds. (a) Subject to the
terms and conditions herein set forth, no later than 11:00
A.M. (New York time) on the date of each incurrence of Loans
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or Competitive Bid Loans (1:00 P.M. (New York time) on such date in the case of
a Borrowing of Base Rate Loans or a Competitive Bid Borrowing constituting an
Absolute Rate Borrowing), each Bank will make available its pro rata share, if
any, of each Borrowing requested to be made on such date in the manner provided
below.
(b) Each Bank shall make available all amounts it is to fund under
any Borrowing in U.S. dollars and immediately available funds to the Agent at
the Agent's Payment Office and the Agent will make available to the Borrower by
depositing to its account at the Agent's Payment Office the aggregate of the
amounts so made available in the type of funds received. Unless the Agent shall
have been notified by any Bank prior to the date of any such Borrowing that such
Bank does not intend to make available to the Agent its portion of the Borrowing
or Borrowings to be made on such date, the Agent may assume that such Bank has
made such amount available to the Agent on such date of Borrowing, and the
Agent, in reliance upon such assumption, may (in its sole discretion and without
any obligation to do so) make available to the Borrower a corresponding amount.
If such corresponding amount is not in fact made available to the Agent by such
Bank and the Agent has made available same to the Borrower, the Agent shall be
entitled to recover such corresponding amount from such Bank. If such Bank does
not pay such corresponding amount forthwith upon the Agent's demand therefor,
the Agent shall promptly notify the Borrower, and the Borrower shall immediately
pay such corresponding amount to the Agent. The Agent shall also be entitled to
recover from such Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent, at a rate per annum equal to (x)
if paid by such Bank, the overnight Federal Funds Effective Rate or (y) if paid
by the Borrower, the then applicable rate of interest, calculated in accordance
with Section 1.09, for the respective Loans or Competitive Bid Loans.
(c) Nothing in this Section 1.05 shall be deemed to relieve any
Bank from its obligation to fulfill its commitments hereunder or to prejudice
any rights which the Borrower may have against any Bank as a result of any
default by such Bank hereunder.
1.06 Notes; Register. (a) The Borrower's obligation to pay the
principal of, and interest on, the Loans made to it by each Bank shall be
evidenced by a promissory note substantially in the form of Exhibit B hereto
with blanks appropriately completed in conformity herewith (each a "Note" and
collectively the "Notes").
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(b) The Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank and be dated the Amendment
Effective Date, (iii) be in a stated principal amount equal to the Commitment of
such Bank and be payable in the principal amount of the Loans evidenced thereby,
(iv) mature on the Final Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 1.09 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
mandatory repayment as provided in Section 3.02 and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.
(c) Each Bank will record on its internal records the amount of
each Loan and Competitive Bid Loan made by it and each payment in respect
thereof and will prior to any transfer of its Note endorse on the reverse side
thereof the outstanding principal amount of Loans and Competitive Bid Loans
evidenced thereby. Failure to make any such notation or any error in any such
notation shall not affect the Borrower's obligations in respect of such Loans
and Competitive Bid Loans.
(d) The Agent shall maintain at its Payment Office a register for
the recordation of the names and addresses of the Banks, the Commitments of the
Banks from time to time, and the principal amount of the Loans and Competitive
Bid Loans owing to each Bank from time to time together with the maturity and
interest rates applicable to each such Competitive Bid Loan, and other terms
applicable thereto (the "Register"). The entries in the Register shall
constitute prima facie evidence as to the information set forth therein.
1.07 Conversions. The Borrower shall have the option to convert on
any Business Day all or a portion at least equal to $5,000,000 (and, if in
excess thereof, an integral multiple of $1,000,000) of the outstanding principal
amount of the Loans of one Type owing by the Borrower into a Borrowing or
Borrowings of the other Type; provided that (i) except as otherwise provided in
Section 1.11(b), Eurodollar Loans may be converted into Base Rate Loans only on
the last day of an Interest Period applicable thereto, and no partial conversion
of a Borrowing of Eurodollar Loans shall reduce the outstanding principal amount
of the Eurodollar Loans pursuant to such Borrowing to less than $5,000,000, (ii)
Base Rate Loans may only be converted into Eurodollar Loans if no Default or
Event of Default is in existence on the date of the conversion, (iii) Borrowings
of Eurodollar Loans resulting from this Section 1.07 shall be limited in number
as provided in Section 1.02 and (iv) each such conversion shall be made pro rata
among the Loans of each Bank of the Type being converted. Each such conversion
shall be effected
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by the Borrower by giving the Agent at its Notice Office, prior to 12:00 Noon
(New York time), at least three Business Days' (or one Business Day's in the
case of a conversion into Base Rate Loans) prior written notice (or telephonic
notice promptly confirmed in writing) (each a "Notice of Conversion") specifying
the Loans to be so converted, the Type of Loans to be converted into and, if to
be converted into a Borrowing of Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Agent shall give each Bank prompt notice of
any such proposed conversion.
1.08 Pro Rata Borrowings. All Borrowings of Loans under this
Agreement shall be loaned by the Banks pro rata on the basis of their respective
Commitments. It is understood that no Bank shall be responsible for any default
by any other Bank in its obligation to make Loans or Competitive Bid Loans
hereunder and that each Bank shall be obligated to make the Loans and
Competitive Bid Loans provided to be made by it hereunder, regardless of the
failure of any other Bank to fulfill its commitments hereunder.
1.09 Interest. (a) The unpaid principal amount of each Base Rate
Loan shall bear interest from the date of the incurrence thereof until maturity
(whether by acceleration or otherwise) at a rate per annum which shall at all
times be the Applicable Base Rate Margin plus the Base Rate in effect from time
to time.
(b) The unpaid principal amount of each Euro- dollar Loan shall
bear interest from the date of the incurrence thereof until maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be the
Applicable Eurodollar Margin plus the relevant Eurodollar Rate.
(c) The unpaid principal amount of each Competitive Bid Loan shall
bear interest from the date the proceeds thereof are made available to the
Borrower until maturity (whether by acceleration or otherwise) at the rate or
rates per annum specified by a Bidder Bank or Bidder Banks, as the case may be,
pursuant to Section 1.04(b) and accepted by the Borrower pursuant to Section
1.04(c).
(d) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and Competitive Bid Loan shall bear interest at
a rate per annum equal to the Base Rate in effect from time to time plus the sum
of (i) 2% and (ii) the Applicable Base Rate Margin; provided that principal in
respect of Eurodollar Loans and Competitive Bid Loans shall bear interest after
the same becomes due (whether by acceleration or otherwise) until the end of the
applicable Interest Period for such Eurodollar Loans, or the original scheduled
maturity of such Competitive
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Bid Loans, as the case may be, at a per annum rate equal to 2% plus the rate of
interest applicable on the due date therefor.
(e) Interest shall accrue from and including the date of any
incurrence of a Loan or a Competitive Bid Loan to and including the date of any
repayment thereof and shall be payable (i) in respect of each Base Rate Loan,
quarterly in arrears on the last Business Day of each calendar quarter, (ii) in
respect of each Competitive Bid Loan, at such times as specified in the Notice
of Competitive Bid Borrowing relating thereto, (iii) in respect of each
Eurodollar Loan, on the last day of each Interest Period applicable thereto and,
in the case of an Interest Period in excess of three months, on each date
occurring at three month intervals after the first day of such Interest Period
and (iv) in respect of each Loan or Competitive Bid Loan, on any conversion or
prepayment (on the amount so converted or prepaid), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(f) All computations of interest hereunder shall be made in
accordance with Section 11.07(b).
(g) The Agent, upon determining the interest rate for any
Borrowing of Eurodollar Loans for any Interest Period, shall promptly notify the
Borrower and the Banks thereof.
1.10 Interest Periods. At the time the Borrower gives a Notice of
Borrowing or Notice of Conversion, in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto), or prior to 12:00 Noon (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans, it shall have the right to elect by giving the
Agent written notice (or telephonic notice promptly confirmed in writing) of the
Interest Period to be applicable to such Borrowing, which Interest Period shall,
at the option of the Borrower, be a one, two, three or six month period.
Notwithstanding anything to the contrary contained above:
(i) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including the date of
any conversion from a Borrowing of Base Rate Loans) and each Interest
Period occurring thereafter in respect of such Borrowing shall commence on
the day on which the next preceding Interest Period expires;
(ii) if any Interest Period begins on a day for
which there is no numerically corresponding day in the
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calendar month at the end of such Interest Period, such Interest Period
shall end on the last Business Day of such calendar month;
(iii) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided that if any Interest Period would
otherwise expire on a day which is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) no Interest Period may be elected if it would
extend beyond the Final Maturity Date;
(v) no Interest Period in respect of any Loans may be elected that
would extend beyond any date upon which Loans are required to be repaid
pursuant to Section 3.02(b) if, after giving effect to the selection of
such Interest Period, the aggregate principal amount of Loans maintained
as Eurodollar Loans with Interest Periods ending after such date would
exceed the aggregate principal amount of Loans permitted to be outstanding
after such date; and
(vi) no Interest Period may be elected at any time when a Default or
Event of Default is then in existence.
If upon the expiration of any Interest Period, the Borrower has failed, or is
not permitted, to elect a new Interest Period to be applicable to any Borrowing
of Eurodollar Loans as provided above, the Borrower shall be deemed to have
elected to convert such Borrowing into a Borrowing of Base Rate Loans effective
as of the expiration date of such current Interest Period.
1.11 Increased Costs, Illegality, etc. (a) In the event that (x)
in the case of clause (i) below, the Agent or (y) in the case of clauses (ii)
and (iii) below, any Bank shall have determined (which determination shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto):
(i) on any date for determining the Eurodollar Rate for any
Interest Period or in respect of any Spread Borrowing priced by reference
to the Eurodollar Rate that, by reason of any changes arising after the
date of this Agreement affecting the interbank Eurodollar market, adequate
and fair means do not exist for ascertaining the applicable interest rate
on the basis provided for in the definition of Eurodollar Rate; or
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(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loans or Competitive Bid Loans because of (x) any change
since the date of this Agreement (or, in the case of any such cost or
reduction with respect to any Competitive Bid Loan, since the making of
such Competitive Bid Loan) in any applicable law, governmental rule,
regulation, guideline, order or request (whether or not having the force
of law) or in the interpretation or administration thereof and including
the introduction of any new law or governmental rule, regulation,
guideline, order or request (such as, for example, but not limited to, a
change in official reserve requirements, but, in all events, excluding
reserves required under Regulation D to the extent included in the
computation of the Euro- dollar Rate) and/or (y) other circumstances
affecting the interbank Eurodollar market or the position of such Bank in
such market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan or Competitive Bid Loan has become unlawful by compliance by such
Bank in good faith with any law, governmental rule, regulation, guideline
or order (or would conflict with any such governmental rule, regulation,
guideline or order not having the force of law but with which such Bank
customarily com- plies even though the failure to comply therewith would
not be unlawful), or has become impracticable as a result of a contingency
occurring after the Amendment Effective Date which materially and
adversely affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Agent in the case of clause (i)
above to the extent applicable to Loans) shall on such date give notice (if by
telephone promptly confirmed in writing) to the Borrower and to the Agent of
such determination (which notice the Agent shall promptly transmit to each of
the other Banks). Thereafter (x) in the case of clause (i) above, Eurodollar
Loans (or Competitive Bid Loans constituting a Spread Borrowing priced by
reference to the Eurodollar Rate) shall no longer be available until such time
as the Agent notifies the Borrower and the Banks that the circumstances giving
rise to such notice by the Agent no longer exist, and any Notice of Borrowing,
Notice of Competitive Bid Borrowing or Notice of Conversion given by the
Borrower with respect to Eurodollar Loans (or any affected Competitive Bid
Loans) which have not yet been incurred shall be deemed rescinded by the
Borrower, (y) in the case of clause (ii) above, the Borrower shall pay to such
Bank, upon written demand therefor, such additional amounts (in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as such Bank in its
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sole discretion shall determine) as shall be required to compensate such Bank
for such increased costs or reductions in amounts receivable hereunder (a
written notice as to the additional amounts owed to such Bank, showing in
reasonable detail the basis for the calculation thereof, including such Bank's
method of allocating such costs among its affected customers, submitted to the
Borrower by such Bank shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) and (z) in the case of clause (iii) above, the
Borrower shall take one of the actions specified in Section 1.11(b) as promptly
as possible and, in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.11(a)(ii) or any Eurodollar Loan or
Competitive Bid Loan is affected by the circumstances described in Section
1.11(a)(iii), the Borrower may (and in the case of a Eurodollar Loan or
Competitive Bid Loan affected pursuant to Section 1.11(a)(iii) shall) either (x)
if the affected Eurodollar Loan or Competitive Bid Loan is then being made
pursuant to a Borrowing, cancel said Borrowing by giving the Agent telephonic
notice (promptly confirmed in writing) thereof on the same date that the
Borrower was notified by a Bank pursuant to Section 1.11(a)(ii) or (iii), (y) if
the affected Euro- dollar Loan is then outstanding, upon at least three Business
Days' notice to the Agent, require the affected Bank to convert each such
Eurodollar Loan into a Base Rate Loan or (z) subject to the provisions of
Section 3.02(d), if the affected Competitive Bid Loan is then outstanding,
prepay such Competitive Bid Loan in full (which prepayment may be made with the
proceeds of a Loan); provided, that if more than one Bank is affected at any
time, then all affected Banks must be treated the same pursuant to this Section
1.11(b).
(c) If any Bank shall have determined that the adoption after the
Amendment Effective Date of any applicable law, rule or regulation regarding
capital adequacy, or any change therein after the Amendment Effective Date, or
any change after the Amendment Effective Date in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Bank or its parent with any request or directive made after the
Amendment Effective Date regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on such Bank's or its
parent's capital or assets as a consequence of its commitments or obligations
hereunder to a level below that which such Bank or its parent could have
achieved but for such adoption, change or compliance (taking into consideration
such Bank's or its parent's policies with respect to
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capital adequacy), then from time to time, within 30 days after demand by such
Bank (with a copy to the Agent), the Borrower shall pay to such Bank or its
parent such additional amount or amounts as will compensate such Bank or its
parent for such reduction. Each Bank, upon determining in good faith that any
additional amounts will be payable pursuant to this Section 1.11(c), will give
prompt written notice thereof to the Borrower, which notice shall set forth in
reasonable detail the basis of the calculation of such additional amounts,
including such Bank's method of allocating such costs among its affected
customers, although the failure to give any such notice shall not release or
diminish any of the Borrower's obligations to pay additional amounts pursuant to
this Section 1.11(c) upon receipt of such notice.
1.12 Compensation. The Borrower shall compensate each Bank, upon
its written request (which request shall set forth the basis for requesting such
compensation), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Bank to
fund its Eurodollar Loans or Competitive Bid Loans but excluding any loss of
anticipated profit with respect to such Loans or Competitive Bid Loans) which
such Bank may sustain: (i) if for any reason (other than a default by such Bank
or the Agent) a Borrowing of Eurodollar Loans or of Competitive Bid Loans
accepted by the Borrower in accordance with Section 1.04(c)(ii), does not occur
on a date specified therefor in a Notice of Borrowing, Notice of Competitive Bid
Borrowing or Notice of Conversion (whether or not withdrawn by the Borrower or
deemed withdrawn pursuant to Section 1.11(a)); (ii) if any repayment, prepayment
or conversion of any of its Eurodollar Loans or any repayment of Competitive Bid
Loans occurs on a date which is not the last day of an Interest Period
applicable thereto; (iii) if any prepayment of any of its Eurodollar Loans or
Competitive Bid Loans is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of (x) any other
default by the Borrower to repay its Eurodollar Loans or Competitive Bid Loans
when required by the terms of this Agreement or (y) an election made pursuant to
Section 1.11(b). Calculation of all amounts payable to a Bank under this Section
1.12 in respect of Eurodollar Loans or Competitive Bid Loans priced by reference
to the Eurodollar Rate shall be made as though that Bank had actually funded its
relevant Loan or Competitive Bid Loan through the purchase of a Eurodollar
deposit bearing interest at the Eurodollar Rate in an amount equal to the amount
of that Loan or Competitive Bid Loan, having a maturity comparable to the
relevant Interest Period and through the transfer of such Eurodollar deposit
from an offshore office of that Bank or other bank to a domestic office of that
Bank in the United States of America;
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provided, however, that each Bank may fund each of its Euro- dollar Loans or
Competitive Bid Loans in any manner it sees fit and the foregoing assumption
shall be utilized only for the calculation of amounts payable under this Section
1.12.
1.13 Change of Lending Office. Each Bank agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.11(a)(ii) or
(iii) or 3.04 with respect to such Bank, it will, if requested by the Borrower,
use reasonable efforts (subject to overall policy considerations of such Bank)
to designate another lending office for any Loans or Competitive Bid Loans
affected by such event; provided, that such designation is made on such terms
that, in the opinion of such Bank, such Bank and its lending office suffer no
economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of any such Section.
Nothing in this Section 1.13 shall affect or postpone any of the obligations of
the Borrower or the right of any Bank provided in Section 1.11 or 3.04.
SECTION 2. Fees; Commitments.
2.01 Fees. (a) The Borrower agrees to pay to the Agent a facility
fee (the "Facility Fee") for the account of the Banks pro rata on the basis of
(i) their respective Commitments for the period from and including the Amendment
Effective Date to and excluding the earlier of (A) the date the Total Commitment
has been terminated and (B) the Conversion Date, and (ii) the outstanding
principal amount of their Loans for the period from and including the Conversion
Date to and including the date the Loans are repaid in full, in each case,
computed at a rate per annum equal to the Applicable Facility Fee Percentage
from time to time of the Total Commitment as in effect or aggregate principal
amount of Loans outstanding, as the case may be, from time to time. Accrued
Facility Fees shall be due and payable in arrears on the last Business Day of
each March, June, September and December, on the date upon which the Total
Commitment is terminated and the date on which the Loans are repaid in full.
(b) In addition to any fees set forth herein, the Borrower shall
pay to the Agent, for the account of the Agent, when and as due, such fees as
have been, or are from time to time, separately agreed upon.
(c) All computations of Fees shall be made in
accordance with Section 11.07(b).
2.02 Voluntary Reduction of Commitments. Upon at
least three Business Days' prior written notice (or tele-
phonic notice promptly confirmed in writing) given by the
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Borrower to the Agent at its Notice Office (which notice shall be irrevocable
and shall be promptly transmitted by the Agent to each of the Banks), the
Borrower shall have the right, without premium or penalty, to terminate, in
whole or in part, the Total Unutilized Commitment (or to the extent that at such
time there are no Loans outstanding, to terminate the Total Commitment),
provided, that (x) any partial reduction of the Total Unutilized Commitment
pursuant to this Section 2.02 shall be in the amount of at least $10,000,000
(and, if greater, in an integral multiple of $1,000,000), and (y) any such
termination shall apply to proportionately and permanently reduce the Commitment
of each of the Banks.
2.03 Mandatory Reduction of Commitments. The
Total Commitment shall terminate on the Conversion Date.
SECTION 3. Payments.
3.01 Voluntary Prepayments. The Borrower shall have the right to
prepay Loans, without premium or penalty, in whole or in part, from time to time
on the following terms and conditions: (i) the Borrower shall give the Agent at
its Notice Office written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay the Loans, the amount of such prepayment and
(in the case of Eurodollar Loans) the specific Borrowing(s) pursuant to which
made, which notice shall be given by the Borrower no later than 12:00 Noon (New
York time) two Business Days prior to the date of such prepayment, and which
notice shall promptly be transmitted by the Agent to each of the Banks; (ii)
each partial prepayment of any Borrowing shall be in an aggregate principal
amount of at least $5,000,000 (and, if greater, in an integral multiple of
$1,000,000), provided that no partial prepayment of Eurodollar Loans made
pursuant to a Borrowing shall reduce the aggregate principal amount of the Loans
outstanding pursuant to such Borrowing to an amount less than $5,000,000; (iii)
prepayments of Eurodollar Loans made pursuant to this Section 3.01 may only be
made on the last day of an Interest Period applicable thereto; and (iv) each
prepayment in respect of any Loans made pursuant to a Borrowing shall be applied
pro rata among such Loans. Upon receipt of a notice of prepayment pursuant to
this Section 3.01, the Agent shall promptly notify each Bank of the contents
thereof and of such Bank's ratable share of such prepayment. The Borrower shall
have no right under this Section 3.01 to prepay any principal amount of any
Competitive Bid Loans.
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3.02 Mandatory Prepayments and Repayments. (a)
------------------------------------
If on any date prior to the Conversion Date the sum of the outstanding principal
amount of Loans and Competitive Bid Loans (all the foregoing, collectively, the
"Aggregate Loan Outstandings") exceeds the Total Commitment as then in effect,
the Borrower shall prepay on such date the principal of Loans, in an amount
equal to such excess. If, after giving effect to the prepayment of all
outstanding Loans as set forth above, the remaining Aggregate Loan Outstandings
exceed the Total Commitment, the Borrower shall repay on such date the principal
of Competitive Bid Loans in an aggregate amount equal to such excess, provided
that no Competitive Bid
--------
Loan shall be prepaid pursuant to this sentence unless the Bank that made same
consents to such prepayment. In the absence of such consent, the provisions of
Section 3.02(d) shall be applicable.
(b) If on the Conversion Date the outstanding principal amount of
Loans exceeds $100,000,000 (after giving effect to the repayment of all
outstanding Competitive Bid Loans on such date), the Borrower shall prepay on
such date the principal of Loans, in an amount equal to such excess. Following
the Conversion Date, the Borrower shall repay on each date set forth below a
principal amount of Loans equal to the amount obtained by multiplying the
aggregate principal amount of Loans outstanding on the Conversion Date and after
giving effect to the prepayment required to be made pursuant to the preceding
sentence by the percentage set forth below opposite such date:
Scheduled Repayment Date Percentage
February 28, 1998 6.25%
August 31, 1998 6.25%
February 28, 1999 8.75%
August 31, 1999 8.75%
February 29, 2000 16.25%
August 31, 2000 16.25%
February 28, 2001 18.75%
August 31, 2001 18.75%
In the event the Borrower elects to prepay Loans after the Conversion Date in
part in accordance with Section 3.01, such prepayments shall be applied to
reduce the foregoing scheduled payments in reverse order of maturity.
(c) With respect to each prepayment or repayment of Loans required
by this Section 3.02, the Borrower may designate the Types of Loans which are to
be prepaid and the specific Borrowing(s) pursuant to which made; provided, that
(i) if any prepayment of Eurodollar Loans made pursuant to a single Borrowing
shall reduce the outstanding Loans made pursuant to such Borrowing to an amount
less than $5,000,000,
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such Borrowing shall be immediately converted into Base Rate Loans; and (ii)
each prepayment of any Loans made pursuant to a Borrowing shall be applied pro
rata among such Loans. In the absence of a designation of Loans by the Borrower
as described in this Section 3.02(c), the Agent shall, subject to the above,
make such designation in its sole discretion with a view, but no obligation, to
minimize breakage costs owing under Section 1.12.
(d) At any time that the Borrower is obligated to prepay any
Competitive Bid Loan pursuant to Section 1.11(b) or 3.02(a) on a date other than
the scheduled maturity date thereof, such prepayment shall only be made if the
respective Bank that made such Competitive Bid Loan has consented in writing (or
by telephone confirmed in writing) to the Borrower to such prepayment within 48
hours after notice (in writing or by telephone confirmed in writing) by the
Borrower to such Bank of such prepayment (it being understood that the Borrower
will give such notice and that any failure to respond to such notice will
constitute a rejection thereof); if such prepayment is not so consented to by
the respective Bank then, in the case of a prepayment otherwise required
pursuant to Section 3.02(a), the provisions of the immediately succeeding
sentence will be applicable. At the time any such Competitive Bid Loans are
otherwise required to be prepaid the Borrower will deposit 100% of the principal
amount that otherwise would have been paid in respect of the Competitive Bid
Loans with the Agent to be held as security for the obligations of the Borrower
hereunder pursuant to a cash collateral agreement to be entered into in form and
substance satisfactory to the Agent, with such cash collateral to be released
from such cash collateral account (and applied to repay the principal amount of
such Competitive Bid Loans) upon each occurrence thereafter of the last day of
an Interest Period applicable to the relevant Competitive Bid Loans, with the
amount to be so released and applied on the last day of each Interest Period to
be the amount of the Competitive Bid Loans to which such Interest Period applies
(or, if less, the amount remaining in such cash collateral account).
3.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement and the Notes shall be made
to the Agent for the ratable account of the Banks entitled thereto, not later
than 12:00 Noon (New York time) on the date when due and shall be made in
immediately available funds and in lawful money of the United States of America
at the Agent's Payment Office, it being understood that written, telex or
facsimile notice by the Borrower to the Agent to make a payment from the funds
in the Borrower's account at the Agent's Payment Office shall constitute the
making of such payment to the extent of such funds held in such account. Any
payments under this Agreement which are made later than 12:00 Noon
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(New York time) shall be deemed to have been made on the next succeeding
Business Day. Whenever any payment to be made hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.
3.04 Net Payments. All payments made by the Borrower hereunder
will be made without setoff or counterclaim. Promptly upon notice from any Bank
to the Borrower, the Borrower will pay, prior to the date on which penalties
attach thereto, all present and future income, stamp and other taxes, levies,
costs and charges whatsoever imposed, assessed, levied or collected on or in
respect of a Loan or a Competitive Bid Loan solely as a result of the interest
rate being determined by reference to the Eurodollar Rate and/or the provisions
of this Agreement relating to the Eurodollar Rate and/or the recording,
registration, notarization or other formalization of any thereof and/or any
payments of principal, interest or other amounts made on or in respect of a Loan
or a Competitive Bid Loan when the interest rate is determined by reference to
the Eurodollar Rate (all such taxes, levies, costs and charges being herein
collectively called "Taxes"); provided that Taxes shall not include taxes
imposed on or measured by the overall net income or overall net profits of that
Bank by the United States of America or any political subdivision or taxing
authority thereof or therein, or taxes on or measured by the overall net income
or overall net profits of any foreign branch or subsidiary of that Bank by any
foreign country or subdivision thereof in which that branch or subsidiary is
doing business. The Borrower shall also pay such additional amounts equal to
increases in taxes payable by that Bank described in the foregoing proviso which
increases are attributable to payments made by the Borrower described in the
immediately preceding sentence of this Section 3.04. Promptly after the date on
which payment of any such Tax is due pursuant to applicable law, the Borrower
will, at the request of that Bank, furnish to that Bank evidence, in form and
substance satisfactory to that Bank, that the Borrower has met its obligation
under this Section 3.04. The Borrower will indemnify each Bank against, and
reimburse each Bank on demand for, any Taxes, as determined by that Bank in its
good faith discretion. Such Bank shall provide the Borrower with appropriate
receipts for any payments or reimbursements made by the Borrower pursuant to
this Section 3.04. Notwithstanding the foregoing, the Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or withhold
(and shall not be required to make payments as otherwise required in this
Section 3.04 on account of such deductions or withholdings) income or other
similar taxes imposed by the
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▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ from interest, fees or other amounts payable hereunder
for the account of any Bank other than a Bank (i) who is a U.S. Person for
Federal income tax purposes or (ii) who has the Prescribed Forms on file with
the Borrower for the applicable year to the extent deduction or withholding of
such taxes is not required as a result of the filing of such Prescribed Forms,
provided that if the Borrower shall so deduct or withhold any such taxes, it
shall provide a statement to the Agent and such Bank, setting forth the amount
of such taxes so deducted or withheld, the applicable rate and any other
information or documentation which such Bank may reasonably request for
assisting such Bank to obtain any allowable credits or deductions for the taxes
so deducted or withheld in the jurisdiction or jurisdictions in which such Bank
is subject to tax.
SECTION 4. Conditions Precedent.
4.01 Conditions Precedent to Amendment and Restatement. This
Agreement shall become effective, and the Existing Credit Agreement shall be
amended and restated in its entirety as set forth herein, on the date (the
"Amendment Effective Date") on which all of the following conditions have been
satisfied or waived:
(a) Effectiveness; Notes. The Borrower and each of the Banks shall
have signed a copy of this Agreement (whether the same or different
copies) and shall have delivered the same to the Agent at the Agent's
Notice Office or, in the case of the Banks, shall have given to the Agent
telephonic (confirmed in writing), written, telex or telecopy notice
(actually received) at such office that the same has been signed and
mailed to it. In addition, there shall have been delivered to the Agent
for the account of each Bank the appropriate Notes executed by the
Borrower in the amount, maturity and as otherwise provided herein.
(b) No Default; Representations and Warranties. On the Amendment
Effective Date (before and after giving effect to the amendment and
restatement), (i) there shall exist no Default or Event of Default and
(ii) all of the representations and warranties contained herein or in the
other Credit Documents shall be true and correct in all material respects
with the same effect as though such representations and warranties had
been made on and as of such date, unless stated to relate to a specific
earlier date, in which case such representations and warranties shall be
true and correct in all material respects as of such earlier date.
(c) Officer's Certificate. On the Amendment
Effective Date, the Agent shall have received a
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certificate dated such date, signed by an appropriate officer of the
Borrower, stating that all of the applicable conditions set forth in
Section 4.01(b), (f), (g), (h) and (k) exist as of such date.
(d) Opinions of Counsel. On the Amendment Effective Date, the
Agent shall have received an opinion, or opinions, in form and substance
reasonably satisfactory to the Agent, addressed to each of the Banks and
dated the Amendment Effective Date, from (i) Wilson, Sonsini, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, special counsel to the Borrower, which opinion shall be
substantially in the form of Exhibit C-1 hereto, (ii) ▇▇▇▇ ▇. ▇▇▇▇▇▇,
Associate General Counsel of the Borrower, which opinion shall be
substantially in the form of Exhibit C-2 hereto and (iii) White & Case,
special counsel to the Banks, which opinion shall be substantially in the
form of Exhibit C-3 hereto.
(e) Corporate Proceedings. (i) On the Amendment
---------------------
Effective Date, the Banks shall have received a certificate, dated the
Amendment Effective Date, signed by the President, any Executive Vice
President or any Senior Vice President of the Borrower, and attested to by
the Secretary or any Assistant Secretary of the Borrower, in the form of
Exhibit D hereto with appropriate insertions, together with copies of the
Certificate of Incorporation and By-Laws of each of the Borrower and FIG,
the resolutions of the Borrower and the other documents referred to in
such certificate, and the foregoing shall be reasonably satisfactory to
the Agent.
(ii) All corporate and legal proceedings and all instruments
and agreements in connection with the transactions contemplated by this
Agreement and the other Credit Documents shall be reasonably satisfactory
in form and substance to the Agent, and the Agent shall have received all
information and copies of all certificates, documents and papers,
including records of corporate proceedings and governmental approvals, if
any, which the Agent reasonably may have requested in connection
therewith, such documents and papers where appropriate to be certified by
proper corporate or governmental authorities.
(f) Repayment of Existing Obligations. After giving effect to the
application of the proceeds of any Borrowing which may occur on the
Amendment Effective Date, all Existing Obligations shall have been paid in
full through and including such date, whether or not then due and payable.
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(g) Adverse Change, etc. Since December 31, 1994, nothing shall
have occurred which the Agent or the Required Banks shall determine (i)
has, or could reasonably be expected to have, a material adverse effect on
the rights or remedies of the Agent or the Banks, or on the ability of the
Borrower to perform its obligations to them, (ii) has, or could reasonably
be expected to have, a material adverse effect on the corporate,
organizational or legal structure of the Borrower or its Subsidiaries or
(iii) has, or could reasonably be expected to have, a materially adverse
effect on the condition (financial or otherwise, determined pursuant to
GAAP or SAP), businesses, operations, properties, assets, liabilities,
investments or prospects of the Borrower and its Subsidiaries taken as a
whole, it being understood that, changes in the market value of securities
held in the Borrower's investment portfolio alone shall not constitute a
material adverse effect of the type described in clause (iii) above.
(h) Litigation. On the Amendment Effective Date, there shall be no
actions, suits or proceedings pending or threatened with respect to the
Borrower or any of its Subsidiaries which in the judgment of the Agent or
the Required Banks could reasonably be expected to (i) have a material
adverse effect on the condition (financial or otherwise, determined
pursuant to GAAP or SAP), businesses, operations, properties, assets,
liabilities, investments or prospects of the Borrower and its Subsidiaries
taken as a whole or (ii) have a material adverse effect on the rights or
remedies of the Banks hereunder or under any other Credit Document or on
the ability of the Borrower to perform its obligations to the Banks
hereunder or under any other Credit Document.
(i) Amended and Restated Pledge Agreement. On or prior to the
Amendment Effective Date, the Borrower shall have duly authorized,
executed and delivered the Amended and Restated Pledge Agreement in the
form of Exhibit E hereto (the "Pledge Agreement") and shall have delivered
to the Collateral Agent, as pledgee there- under, all of the Pledged Stock
referred to therein, together with undated stock powers executed in blank.
(j) Financial Statements. Prior to the
Amendment Effective Date, the Borrower shall have delivered or caused to
be delivered to the Agent and to each Bank:
(i) the audited consolidated and unaudited
consolidating balance sheet of the Borrower as of
December 31, 1994, and the related consolidated and
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consolidating statements of income and of stockholders' equity and
consolidated statements of cash flows for the fiscal year then ended, in
each case prepared in accordance with GAAP;
(ii) the unaudited balance sheet of each of the Borrower, FFC
and FIG as of December 31, 1994, and the related statements of income and
of stockholders' equity for the fiscal year then ended, in each case
prepared in accordance with GAAP;
(iii) the audited balance sheet of FIL as of December 31, 1994,
and the related statements of income, of stockholders' equity and of cash
flows for the fiscal year then ended, in each case prepared in accordance
with GAAP;
(iv) the unaudited consolidated balance sheet of FIC as of
December 31, 1994, and the related consolidated statements of income, of
stockholders' equity and of cash flows for the fiscal year then ended, in
each case prepared in accordance with SAP;
(v) the audited consolidated balance sheet of the Workers
Compensation Subsidiaries as of December 31, 1994, and the related
statements of income, of stockholders' equity and of cash flows for the
fiscal year then ended, in each case prepared in accordance with SAP and
as filed with the Applicable Insurance Regulatory Authority;
(vi) the audited balance sheet of each of FRC, ▇▇▇▇▇▇▇▇ and
Bermuda as of December 31, 1994, and the related statements of income, of
stockholders' equity and of cash flows for the fiscal year then ended, in
the case of each of FRC and ▇▇▇▇▇▇▇▇, prepared in accordance with SAP and,
in the case of Bermuda, prepared in accordance with GAAP;
(vii) the unaudited consolidated balance sheet of the Borrower
as of June 30, 1995, and the related consolidated statements of income, of
stockholders' equity and of cash flows for the six-month period then
ended, in each case prepared in accordance with GAAP (subject to normal
year-end audit adjustments); and
(viii) the unaudited call report for FIL for the six-month
period ended June 30, 1995, prepared in accordance with GAAP (subject to
normal year-end audit adjustments).
(k) Approvals. On the Amendment Effective Date,
all necessary and material governmental and third party
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approvals and filings in connection with the Credit Documents and
otherwise referred to herein including the approval of the California
Department of Insurance, to the extent such approvals and filings are
required to be obtained or made prior to the Amendment Effective Date,
shall have been obtained and remain in full force and effect, and all
applicable waiting periods shall have expired without any action being
taken by any competent authority which restrains, prevents or imposes, in
the judgment of the Required Banks or the Agent, materially adverse
conditions upon the consummation of the transactions contemplated thereby.
(l) Payment of Fees. On the Amendment Effective Date, all costs,
fees and expenses, and all other compensation contemplated by this
Agreement or the other Credit Documents, due to the Agent or any Banks
shall have been paid to the extent due.
(m) Consent Letter. On the Amendment Effective Date, the Agent
shall have received a letter from CT Corporation System, substantially in
the form of Exhibit G hereto, indicating its consent to its appointment by
the Borrower as its agent to receive service of process as specified in
Section 11.08.
All of the certificates, legal opinions and other documents and papers referred
to in this Section 4.01, unless otherwise specified, shall be delivered to the
Agent at its Notice Office for the account of each of the Banks and, except for
the Notes, in sufficient counterparts for each of the Banks and shall be
reasonably satisfactory in form and substance to the Agent.
4.02 Conditions Precedent to Borrowings. The obligation of the
Banks to make any Loan or Competitive Bid Loan to the Borrower hereunder is
subject, at the time of the making of such Loan or Competitive Bid Loan, to the
satisfaction of the following conditions:
(a) Notice of Borrowing. The Agent shall have received a Notice of
Borrowing satisfying the requirements of Section 1.03 in the case of a
Borrowing of Loans, or a Notice of Competitive Bid Borrowing satisfying
the requirements of Section 1.04 in the case of a Borrowing of Competitive
Bid Loans.
(b) No Default; Representations and Warranties. At the time of the
making of such Loan or Competitive Bid Loan and also after giving effect
thereto, (i) there shall exist no Default or Event of Default and (ii) all
representations and warranties contained herein or in the other Credit
Documents shall be true and correct in
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all material respects with the same effect as though such representations
and warranties had been made on and as of the date of such Loan or
Competitive Bid Loan, as the case may be, unless stated to relate to a
specific earlier date, in which case such representations and warranties
shall have been true and correct in all material respects as of such
earlier date.
The acceptance of the benefits of each Loan and Competitive Bid Loan shall
constitute a representation and warranty by the Borrower to each of the Banks
that all of the applicable conditions specified above exist or have been
satisfied as of such date.
SECTION 5. Representations, Warranties and Agreements. In order to
induce the Banks to enter into this Agreement and to make the Loans and
Competitive Bid Loans provided for herein, the Borrower makes the following
representations and warranties to, and agreements with, the Banks, all of which
shall survive the execution and delivery of this Agreement and the making of the
Loans and Competitive Bid Loans (with the making of each Loan and Competitive
Bid Loan being deemed to constitute a representation and warranty that the
matters specified in this Section 5 are true and correct in all material
respects on and as of the date of the making of each such Loan or Competitive
Bid Loan, as the case may be, unless such representation and warranty expressly
indicates that it is being made as of any specific date in which case such
representation and warranty shall be true and correct in all material respects
as of such specified date):
5.01 Corporate Status. The Borrower and each of its Subsidiaries
(i) is a duly organized and validly existing corporation in good standing under
the laws of the jurisdiction of its organization and has the corporate or other
organizational power and authority to own its property and assets and to
transact the business in which it is engaged and presently proposes to engage
and (ii) has duly qualified and is authorized to do business and is in good
standing in all jurisdictions where it is required to be so qualified and where
the failure to be so qualified would have a material adverse effect on the
condition (financial or otherwise, determined pursuant to GAAP or SAP),
businesses, operations, properties, assets, liabilities or investments of the
Borrower and its Subsidiaries taken as a whole.
5.02 Corporate Power and Authority. The Borrower has the corporate
power and authority to execute, deliver and carry out the terms and provisions
of the Credit Documents and has taken all necessary corporate action to
authorize the execution, delivery and performance of the Credit Documents. The
Borrower has duly executed and delivered each Credit Document and each such
Credit Document constitutes the legal,
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valid and binding obligation of the Borrower, enforceable in
accordance with its terms.
5.03 No Violation. Neither the execution, delivery and performance
by the Borrower of the Credit Documents nor compliance with the terms and
provisions thereof, nor the consummation of the transactions contemplated
therein (i) will contravene any applicable provision of any law, statute, rule,
regulation, order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict or be inconsistent with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or (other than pursuant to the Pledge Agreement)
result in the creation or imposition of (or the obligation to create or impose)
any Lien upon any of the property or assets of the Borrower or any of its
Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust,
loan agreement or other material instrument to which the Borrower or any of its
Subsidiaries is a party or by which it or any of its property or assets are
bound or to which it may be subject or (iii) will violate any provision of the
charter or By-Laws of the Borrower or any of its Subsidiaries.
5.04 Litigation. There are no actions, suits or proceedings
pending or, to the Borrower's knowledge, threatened, with respect to the
Borrower or any of its Subsidiaries (i) that are reasonably likely to have a
material adverse effect on the condition (financial or otherwise, determined
pursuant to GAAP or SAP), businesses, operations, properties, assets,
liabilities or investments of the Borrower and its Subsidiaries taken as a whole
or (ii) that could reasonably be expected to have a material adverse effect on
the rights or remedies of the Banks or the Agent or on the ability of the
Borrower to perform its obligations to them hereunder and under the other Credit
Documents.
5.05 Use of Proceeds. (a) Subject to Section 5.05(b), (c), (d) and
(e), all proceeds of the Loans and Competitive Bid Loans shall be utilized to
repay the Existing Obligations, to repay the Permitted CIC Acquisition
Subordinated Note and for general corporate purposes of the Borrower and its
Subsidiaries.
(b) Neither the making of any Loan or Competitive Bid Loan
hereunder, nor the use of the proceeds thereof, will violate or be inconsistent
with the provisions of Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System. At the time of the making of each Loan or Competitive
Bid Loan, not more than 25% of the value of the assets subject to the provisions
of Section 7 of the Borrower, or of the Borrower and its Subsidiaries on a
consolidated basis, shall constitute Margin Stock.
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(c) The aggregate outstanding principal amount of the Loans and
Competitive Bid Loans the proceeds of which are permitted to be transferred to
Financial Services Subsidiaries by means of a capital contribution shall, when
added to amount of all other capital contributions made pursuant to this Section
5.05(c), acquisitions made pursuant to Section 7.02(d) and investments made
pursuant to Section 7.05(g), at no time exceed the Permitted Basket Amount.
(d) To the extent that any portion of the proceeds of any Loan or
Competitive Bid Loan are transferred to a Financial Services Subsidiary, other
than any such transfer by means of a capital contribution permitted by clause
(c) above, such transfer shall be effected by means of a loan from the Borrower
to such Financial Services Subsidiary (each such loan, a "Proceeds Loan"), and
each such Proceeds Loan shall rank pari passu with, or senior to, all other
Indebtedness of the respective Financial Services Subsidiary.
(e) Notwithstanding the foregoing provisions of this Section 5.05,
no proceeds of any Loan or any Competitive Bid Loan will be utilized to purchase
any capital stock or other ownership interests of a Person in a transaction, or
as part of a series of transactions, the result of which is the ownership by the
Borrower and/or its Subsidiaries of 5% or more of the capital stock or other
ownership interests of such Person unless the Board of Directors (or similar
body if such Person is not a corporation) of such Person has approved such
transaction prior to any public announcement of the purchase, or the intent to
purchase, any such capital stock or ownership interests.
5.06 Governmental Approvals. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required in
connection with (i) the execution, delivery and performance of any Credit
Document or (ii) the legality, validity, binding effect or enforceability of any
Credit Document.
5.07 Investment Company Act. Neither the Bor-
rower nor any of its Subsidiaries is an "investment company"
or a company "controlled" by an "investment company," within
the meaning of the Investment Company Act of 1940, as
amended.
5.08 Public Utility Holding Company Act. Neither
the Borrower nor any of its Subsidiaries is a "holding com-
pany," or a "subsidiary company" of a "holding company," or
an "affiliate" of a "holding company" or of a "subsidiary
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company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
5.09 True and Complete Disclosure. All factual information (taken
as a whole) heretofore or contemporaneously furnished by or on behalf of the
Borrower or any of its Subsidiaries in writing to the Agent or any Bank
(including, without limitation, all information contained in the Credit
Documents) for purposes of or in connection with this Agreement or any
transaction contemplated herein is, and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of the Borrower in
writing to the Agent or any Bank will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided. There is no fact known
to the Borrower which materially and adversely affects the condition (financial
or otherwise, determined pursuant to GAAP or SAP), businesses, operations,
assets, liabilities, properties or investments of the Borrower and its
Subsidiaries, taken as a whole, which has not been disclosed herein or in such
other documents, certificates and statements furnished to the Banks for use in
connection with the transactions contemplated hereby.
5.10 Financial Condition; Financial Statements. (a) On and as of
the date of the making of each Loan and each Competitive Bid Loan, on a pro
forma basis after giving effect to all Indebtedness incurred on such date, and
to be incurred, and Liens created and to be created, in connection with this
Agreement, (x) the sum of the assets, at a fair valuation, of the Borrower will
exceed its debts, (y) the Borrower will not have incurred nor intended to, or
believe that it will, incur debts beyond its ability to pay such debts as such
debts mature and (z) the Borrower will have sufficient capital with which to
conduct its business. For purposes of this Section 5.10(a), "debt" means any
liability on a claim, and "claim" means (i) right to payment whether or not such
a right is reduced to judgment, liquidated, unli- quidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured; or (ii) right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
(b) The financial statements delivered to the Banks pursuant to
Section 4.01(j) present fairly the financial position of the Persons specified
therein, at the dates of said statements and the results of operations for
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the periods covered thereby. All such financial statements have been prepared in
accordance with SAP or GAAP, as indicated in Section 4.01(j), consistently
applied except to the extent provided in the notes to said financial statements.
(c) Except as fully disclosed in the financial statements
delivered pursuant to Section 4.01(j), there are no liabilities or obligations
with respect to the Borrower or any of its Subsidiaries of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether or not due)
which, either individually or in aggregate, would be material to the Borrower or
to the Borrower and its Subsidiaries taken as a whole. The Borrower does not
know of any basis for the assertion against it of any liability or obligation of
any nature whatsoever that is not fully disclosed in the financial statements
delivered pursuant to Section 4.01(j) which, either individually or in the
aggregate, could reasonably be expected to be material to the Borrower or the
Borrower and its Subsidiaries taken as a whole.
(d) There has been no material adverse change in the condition
(financial or otherwise, determined pursuant to GAAP or SAP), businesses,
operations, properties, assets or liabilities of the Borrower or of the Borrower
and its Subsidiaries taken as a whole from that of the Borrower or of the
Borrower and its Subsidiaries taken as a whole as of December 31, 1994.
5.11 Security Interests. The Pledge Agreement creates, as security
for the Obligations, valid and enforceable perfected security interests in and
Liens on all of the Collateral, superior to and prior to the rights of all third
persons, and subject to no other Liens (except for Non- Consensual Permitted
Liens), in favor of the Collateral Agent for the benefit of the Banks. The
Borrower has good and marketable title to all Collateral free and clear of all
Liens (except as created pursuant to the Pledge Agreement and except for
Non-Consensual Permitted Liens). No filings, recordings or consents (except for
those that have been made) are required in order to perfect the security
interests created under the Pledge Agreement.
5.12 Tax Returns and Payments. The Borrower and each of its
Subsidiaries has filed all federal income tax returns and all other tax returns,
domestic and foreign, required to be filed by it and has paid all material taxes
and assessments payable by it which have become due, other than those not yet
delinquent and except for those contested in good faith. The Borrower and each
of its Subsidiaries has paid, or has provided adequate reserves (in the good
faith judgment of the management of such Person) for the payment of, all
federal, state and foreign income taxes applicable
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for all prior fiscal years and for the current fiscal year to
the date hereof.
5.13 Compliance with ERISA. Each Plan is in substantial compliance
with ERISA and the Code; no Reportable Event has occurred with respect to a
Plan; no Plan is insolvent or in reorganization; the aggregate amount of
Unfunded Current Liabilities in respect of all Plans does not exceed $1,000,000;
no Plan has an accumulated or waived funding deficiency, has permitted decreases
in its funding standard account or has applied for an extension of any
amortization period within the meaning of Section 412 of the Code; neither the
Borrower nor any Subsidiary nor any ERISA Affiliate has incurred any material
liability to or on account of a Plan pursuant to Section 409, 502(i), 502(l),
515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of
the Code or has been notified that it will incur any material liability under
any of the foregoing Sections with respect to any Plan; no proceedings have been
instituted by the PBGC to terminate any Plan; no condition exists which presents
a material risk to the Borrower or any Subsidiary or any ERISA Affiliate of
incurring a material liability to or on account of a Plan pursuant to the
foregoing provisions of ERISA and the Code; no material lien imposed under the
Code or ERISA on the assets of the Borrower or any Subsidiary or any ERISA
Affiliate exists nor has the Borrower, any Subsidiary or any ERISA Affiliate
been notified that such a lien will be imposed on the assets of the Borrower,
any Subsidiary or any ERISA Affiliate on account of any Plan; and the Borrower
and its Subsidiaries do not maintain or contribute to any employee welfare
benefit plan (as defined in Section 3(1) of ERISA) (other than such an employee
welfare benefit plan which is a "multiemployer plan" within the meaning of
Section 414(f) of the Code) which provides benefits to retired employees (other
than as required by Section 601 of ERISA) or any employee pension benefit plan
(as defined in Section 3(2) of ERISA) (other than any such employee pension
benefit plan which is intended to be qualified under Section 401(a) of the
Code), the obligations with respect to which employee welfare benefit plans or
employee pension benefit plans, individually or in the aggregate, would have a
material adverse effect upon the condition (financial or otherwise, determined
pursuant to GAAP or SAP), businesses, operations, properties, assets,
liabilities or investments of the Borrower and its Subsidiaries taken as a
whole. With respect to Plans that are multiemployer plans (as defined in Section
3(37) of ERISA) the representations and warranties in this Section 5.13, other
than any made with respect to liability under Section 4201 or 4204 of ERISA, are
made to the best knowledge of the Borrower.
5.14 Subsidiaries. (a) Annex III lists each
Subsidiary of the Borrower (and the direct and indirect own-
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ership interest of the Borrower therein) in each case exist-
ing on the Amendment Effective Date. As of the Amendment
Effective Date, all such Subsidiaries are Wholly-Owned
Subsidiaries of the Borrower.
(b) There are no restrictions on the Borrower or any of its P&C
Insurance Subsidiaries which prohibit or otherwise restrict (x) the ability of
any P&C Insurance Subsidiary to (a) pay dividends or make other distributions or
pay any Indebtedness owed to the Borrower or any P&C Insurance Subsidiary, (b)
make loans or advances to the Borrower or any P&C Insurance Subsidiary, (c)
transfer any of its properties or assets to the Borrower or any P&C Insurance
Subsidiary or (d) guarantee the Obligations or (y) the ability of the Borrower
or any P&C Insurance Subsidiary of the Borrower to create, incur, assume or
suffer to exist any Lien upon its property or assets to secure the Obligations,
other than prohibitions or restrictions existing under or by reason of (i) this
Agreement or the other Credit Documents, (ii) Legal Requirements, (iii)
customary non-assignment provisions entered into in the ordinary course of
business and consistent with past practices, (iv) purchase money obligations for
property acquired in the ordinary course of business, so long as such
obligations are permitted under this Agreement, (v) any restriction or
encumbrance with respect to a P&C Insurance Subsidiary imposed pursuant to an
agreement which has been entered into for the sale or disposition of all or
substantially all of the capital stock or assets of such P&C Insurance
Subsidiary, so long as such sale or disposition is permitted under this
Agreement, and (vi) Liens permitted under Section 7.03 and any documents or
instruments governing the terms of any Indebtedness or other obligations secured
by any such Liens, provided, that such prohibitions or restrictions apply only
to the assets subject to such Liens.
(c) There are no restrictions on the Borrower or any Financial
Services Subsidiary which is the obligor in respect of a Proceeds Loan which
prohibit or otherwise restrict the ability of such Financial Services Subsidiary
to repay such Proceeds Loan, together with interest thereon, other than
prohibitions or restrictions existing under or by reason of (i) this Agreement
or the other Credit Documents or (ii) Legal Requirements.
5.15 Intellectual Property. The Borrower and each of its
Subsidiaries have obtained or are in the process of applying for all material
patents, trademarks, servicemarks, trade names, copyrights, licenses and other
rights, free from burdensome restrictions, that are necessary for the operation
of their respective businesses as presently conducted and as proposed to be
conducted.
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5.16 Pollution and Other Regulations. The Borrower and each of its
Subsidiaries are in compliance with all laws and regulations relating to
pollution and environmental control, equal employment opportunity and employee
safety in all domestic and foreign jurisdictions in which the Borrower and each
of its Subsidiaries is presently doing business, and the Borrower will comply
and cause each of its Subsidiaries to comply with all such laws and regulations
which may be imposed in the future in jurisdictions in which the Borrower or
such Subsidiary may then be doing business; in each case other than those the
non-compliance with which would not have a material adverse effect on the
condition (financial or otherwise, determined pursuant to GAAP or SAP),
businesses, operations, properties, assets, liabilities or investments of the
Borrower and its Subsidiaries taken as a whole or on the ability of the Borrower
to perform its obligations under any Credit Document.
5.17 Properties. The Borrower and each of its Subsidiaries has
good and marketable title to all properties owned by them, free and clear of all
Liens, other than as permitted by Section 7.03.
5.18 Labor Relations; Collective Bargaining Agreements. (a) Set
forth on Annex IV is a list and description (including dates of termination) of
all collective bargaining or similar agreements between or applicable to the
Borrower or any of its Subsidiaries and any union, labor organization or other
bargaining agent in respect of the employees of the Borrower and/or any
Subsidiary on the Amendment Effective Date.
(b) Neither the Borrower nor any of its Subsidiaries is engaged in
any unfair labor practice that is reasonably likely to have a material adverse
effect on the Borrower or on the Borrower and its Subsidiaries taken as a whole.
There is (i) no significant unfair labor practice complaint pending against the
Borrower or any of its Subsidiaries or, to the best knowledge of the Borrower,
threatened against any of them, before the National Labor Relations Board, and
no significant grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is now pending against the Borrower or
any of its Subsidiaries or, to the best knowledge of the Borrower, threatened
against any of them, (ii) no significant strike, labor dispute, slowdown or
stoppage is pending against the Borrower or any of its Subsidiaries or, to the
best knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries and (iii) to the best knowledge of the Borrower, no union
representation question exists with respect to the employees of the Borrower or
any of its Subsidiaries, except (with respect to any matter specified in clause
(i), (ii) or (iii) above, either in-
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dividually or in the aggregate) such as is not reasonably likely to have a
material adverse effect on the condition (financial or otherwise, determined
pursuant to GAAP or SAP) businesses, operations, properties, assets, liabilities
or investments of the Borrower and its Subsidiaries taken as a whole.
5.19 Capitalization. On the Amendment Effective Date, the
authorized capital stock of the Borrower consists of (i) 30,000,000 shares of
common stock, $1.00 par value, of which 16,926,948 were issued and outstanding
as of July 31, 1995 and (ii) 2,000,000 shares of preferred stock, $0.01 par
value, none of which are issued and outstanding. As of the Amendment Effective
Date, all such outstanding shares of the Borrower have been duly and validly
issued and are fully paid and nonassessable. Except for the Liquid Yield Option
Notes, neither the Borrower nor any of its Subsidiaries has outstanding any
securities convertible into or exchangeable for its capital stock or outstanding
any rights to subscribe for or to purchase, or any options for the purchase of,
or any agreements providing for the issuance (contingent or otherwise) of, or
any calls, commitments or claims of any character relating to, its capital
stock.
5.20 Indebtedness. Annex V sets forth a true and complete list of
all Indebtedness (including, without limitation, Contingent Obligations) of the
Borrower as of the Amendment Effective Date (other than Indebtedness having an
aggregate principal amount not to exceed $1,000,000), in each case showing the
aggregate principal amount thereof, the name of the lender in respect thereof
and the name of any other entity which has directly or indirectly guaranteed
such Indebtedness.
5.21 Compliance with Statutes, etc. The Borrower and each of its
Subsidiaries is in compliance in all material respects with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct of their
businesses and the ownership of their properties (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls).
SECTION 6. Affirmative Covenants. The Borrower hereby covenants
and agrees that on the Amendment Effective Date and thereafter, for so long as
this Agreement is in effect and until such time as the Total Commitment has
terminated, no Notes are outstanding and the Loans and Competitive Bid Loans,
together with interest, Fees and all other Obligations incurred hereunder, are
paid in full:
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6.01 Information Covenants. The Borrower will
furnish to each Bank:
(a) Annual Financial Statements. (i) As soon as available and in
any event within 120 days after the close of each fiscal year of the
Borrower, (x) the consolidated and consolidating balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal year and the
related consolidated and consolidating statements of income and of
stockholders' equity and consolidated statement of cash flows for such
fiscal year, and (y) the balance sheet of each of the Borrower, FFC and
FIG (on a stand alone basis in the case of the Borrower and on a
consolidated basis in the case of FFC and FIG) as at the end of such
fiscal year and the related statements of income and of stockholders'
equity for such fiscal year, in each case prepared in accordance with GAAP
and setting forth comparative figures for the preceding fiscal year, and,
(1) in the case of such consolidated financial statements furnished to
each Bank with respect to the Borrower and FFC, examined by independent
certified public accountants of recognized national standing whose opinion
shall not be qualified as to the scope of audit or as to the status of the
Borrower, FFC or any of their respective Subsidiaries as a going concern
and (2) in the case of such financial statements furnished to each Bank
with respect to the Borrower on an unconsolidated basis and FIG,
accompanied by an opinion of the Chief Financial Officer or other
Authorized Officer of the Borrower stating that such financial statements
fairly present the financial condition and results of operations of the
Borrower or FIG, as the case may be, in accordance with GAAP.
(ii) As soon as available and in any event within 180 days after the
close of each fiscal year of the Borrower, (x) the annual combined
financial statements of FCIC and its Subsidiaries (prepared in accordance
with SAP) for such fiscal year, setting forth comparative figures for the
preceding fiscal year, together with an opinion of the Chief Financial
Officer or other Authorized Officer of the Borrower stating that such
financial statements fairly present the combined financial condition and
results of operations of FCIC and each respective Subsidiary in accordance
with SAP, (y) the annual combined financial statements of FIC and its
Subsidiaries (prepared in accordance with SAP) for such fiscal year, as
filed with the respective Applicable Insurance Regulatory Authority and
setting forth comparative figures for the preceding fiscal year, together
with an opinion of the Chief Financial Officer or other Authorized Officer
of the Borrower stating that such financial statements fairly present the
combined ▇▇▇▇▇-
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cial condition and results of operations of FIC and each respective
Subsidiary in accordance with SAP, and (z) the annual financial statements
of each P&C Insurance Subsidiary (prepared in accordance with SAP) for
such fiscal period, as filed with the respective Applicable Insurance
Regulatory Authority and setting forth comparative figures for the
preceding fiscal year, and examined by independent certified public
accountants of recognized national standing whose opinion shall not be
qualified as to the scope of audit or as to the status of any P&C
Insurance Subsidiary as a going concern.
(iii) As soon as available and in any event within 120 days after
the close of each fiscal year of the Borrower, (x) the consolidated and
consolidating balance sheet of Investors Bancor and its Subsidiaries as at
the end of such fiscal year and the related consolidated and consolidating
statements of income and of stockholders' equity for such year, setting
forth comparative figures for the preceding fiscal year, together with an
opinion of the Chief Financial Officer or other Authorized Officer of the
Borrower stating that, in the case of such consolidated financial
statements, such financial statements fairly present the consolidated
financial condition and results of operations of Investors Bancor and each
respective Subsidiary in accordance with GAAP, (y) the balance sheet of
FIL as at the end of such fiscal year and the related statements of
income, of stockholders' equity and of cash flows for such fiscal year,
setting forth comparative figures for the preceding fiscal year, and
examined by independent certified public accountants of recognized
national standing whose opinion shall not be qualified as to scope of
audit or as to the status of FIL as a going concern and (z) to the extent
not included in clause (y) above, the balance sheet of each Subsidiary of
Investors Bancor as at the end of such fiscal year and the related
statement of income, setting forth comparative figures for the preceding
fiscal year, together with an opinion of the Chief Financial Officer or
other Authorized Officer of the Borrower stating that such balance sheet
fairly presents the assets and liabilities such Subsidiary in accordance
with GAAP.
(iv) As soon as available and in any event no later than June 15
of each year (September 15 of each year in the case of Bermuda), the
balance sheet of each Material Discontinued Subsidiary as at the end of
the fiscal year ending on the immediately preceding December 31 and the
related statements of income, of stockholders' equity and of cash flows
for such fiscal year, in each case prepared in accordance with SAP (or, in
the case of any Material Discontinued Subsidiary
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which is not a Regulated Insurance Subsidiary, GAAP) and setting forth
comparative figures for the preceding fiscal year, and examined by
independent certified public accountants of recognized national standing
whose opinion shall not be qualified as to the scope of audit.
(v) As soon as available and in any event within 120 days after
the close of each fiscal year of the Borrower, a written favorable
opinion, in form and substance satisfactory to the Agent, by either the
firm of independent certified public accountants providing the opinion
referred to in Section 6.01(a)(i) in respect of such fiscal year or an
independent actuarial consulting firm reasonably satisfactory to the
Agent, which firm shall be provided access to or copies of all reserve
analyses and valuations relating to the insurance business of each Workers
Compensation Subsidiary in the possession of or available to the Borrower
or its Subsidiaries stating, with respect to each Workers Compensation
Subsidiary, that its loss reserves as of the last day of such fiscal year
(A) make a reasonable provision in the aggregate for all unpaid losses and
loss adjustment expenses, gross and net as to reinsurance ceded, under the
terms of such Workers Compensation Subsidiary's policies, (B) are computed
in a manner that conforms to the appropriate Standards of Practice of the
Actuarial Standards Board, (C) are computed on the basis of similar
general methods as used as of the last day of the preceding fiscal year
and (D) meet the relevant requirements of the insurance laws of the
jurisdiction where such Workers Compensation Subsidiary is domiciled.
(b) Quarterly Financial Statements. (i) As soon as available and
in any event within 60 days after the close of each of the first three
quarterly accounting periods in each fiscal year of the Borrower, (x) the
consolidated balance sheet of the Borrower and its Subsidiaries as at the
end of such quarterly period and the related consolidated statements of
income, of stockholders' equity and of cash flows for such quarterly
period and for the elapsed portion of the fiscal year ended with the last
day of such quarterly period, and (y) the balance sheet of the Borrower
and FFC (on a stand alone basis in the case of the Borrower and on a
consolidated basis in the case of FFC) as at the end of such fiscal
quarter and the related statements of income and of stockholders' equity
for such quarterly period and for the elapsed portion of the fiscal year
ended with the last day of such quarterly period; in each case setting
forth comparative figures for the related periods in the prior fiscal year
(prepared in accordance with GAAP), and all of which
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shall be certified by the Chief Financial Officer or other Authorized
Officer of the Borrower, subject to changes resulting from normal year-end
audit adjustments.
(ii) As soon as available and in any event (x) within 90 days after
the close of each of the first three quarterly accounting periods in each
fiscal year of the Borrower, quarterly combined financial statements of
FCIC and its Subsidiaries (prepared in accordance with SAP) for such
fiscal period, together with the opinion thereon of the Chief Financial
Officer or other Authorized Officer of the Borrower stating that such
financial statements fairly present the combined financial condition and
results of operations of FCIC and its Subsidiaries in accordance with SAP,
and (y) within 60 days after the close of each of the first three
quarterly accounting periods in each fiscal year of the Borrower,
quarterly financial statements of each P&C Insurance Subsidiary (prepared
in accordance with SAP) for such fiscal period, together with the opinion
thereon of the Chief Financial Officer or other Authorized Officer of the
Borrower stating that such financial statements fairly present the
financial condition and results of operations of each such Subsidiary in
accordance with SAP.
(iii) As soon as available and in any event within 45 days after the
close of each of the first three quarterly accounting periods in each
fiscal year of the Borrower, the call report with respect to FIL for such
fiscal quarter, certified by the Chief Financial Officer or other
Authorized Officer of the Borrower, subject to changes resulting from
normal year-end audit adjustments.
(c) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 6.01(a) and (b), a
certificate of the Chief Financial Officer or other Authorized Officer of
the Borrower to the effect that no Default or Event of Default exists or,
if any Default or Event of Default does exist, specifying the nature and
extent thereof, which certificate shall set forth the calculations
required to establish whether the Borrower and its Subsidiaries were in
compliance with the provisions of Sections 6.11, 7.05 and 7.10 through
7.15 as at the end of such fiscal year or quarter, as the case may be.
(d) Notice of Default or Litigation. Promptly,
and in any event within three Business Days after a
senior officer of the Borrower obtains knowledge
thereof, notice of (x) the occurrence of any event which
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constitutes a Default or Event of Default, which notice shall specify the
nature thereof, the period of existence thereof and what action the
Borrower proposes to take with respect thereto and (y) any litigation or
governmental or regulatory proceeding pending against the Borrower or any
of its Subsidiaries which is likely to have a material adverse effect on
the condition (financial or otherwise, determined pursuant to GAAP or
SAP), businesses, operations, properties, assets, liabilities or
investments of the Borrower and its Subsidiaries taken as a whole or the
ability of the Borrower to perform its obligations hereunder or under any
other Credit Document.
(e) Auditors' Reports. Promptly upon receipt thereof, a copy of
each other report or "management letter" submitted to the Borrower or any
of its Subsidiaries by their independent accountants or independent
actuaries in connection with any annual, interim or special audit made by
them of the books of the Borrower or any of its Subsidiaries (it being
understood and agreed that if the Borrower receives any such report or
"management letter" that relates to the Borrower and its Subsidiaries on a
consolidated basis, the delivery of such report or letter will satisfy the
provisions of this clause (e).
(f) Loss Reserve Report. As promptly as reasonably practicable
following a request therefor by the Agent or the Required Banks, a report
prepared by an independent accounting or actuarial consulting firm of
recognized professional standing selected by the Agent or the Required
Banks reviewing the adequacy of loss reserves of each Workers Compensation
Subsidiary, which firm shall be provided access to or copies of all
reserve analyses and valuations relating to the insurance business of each
such Workers Compensation Subsidiary in the possession of or available to
the Borrower or its Subsidiaries; provided that (x) no more than one
request may be made pursuant to this clause (f) during any four
consecutive fiscal quarters of the Borrower, and (y) the cost of such
review and report shall be for the account of the Banks (pro rata
according to their respective Commitments).
(g) Other Regulatory Statements and Reports. Promptly (A) after
their becoming available, copies of any statutory financial statements
that the Borrower or any Regulated Insurance Company periodically files
with the Applicable Insurance Regulatory Authority of the state in which
it is domiciled or any state in which it is deemed to be commercially
domiciled or any governmental agency or agencies substituted therefor (in-
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cluding all exhibits and schedules thereto), (B) after receipt thereof,
copies of all regular and periodic reports of reviews or examinations
(including, without limitation, triennial examinations and risk based
capital reports) of any Regulated Insurance Company that is a Subsidiary,
or any of them, delivered to such Person by any Applicable Insurance
Regulatory Authority, insurance commission or similar regulatory
authority, (C) after receipt thereof, written notice of any assertion by
any Applicable Insurance Regulatory Authority or any governmental agency
or agencies substituted therefor, as to a violation of any Legal
Requirement by any Regulated Insurance Company which is likely to have a
material adverse effect on the condition (financial or otherwise,
determined pursuant to GAAP or SAP), businesses, operations, properties,
assets, liabilities or investments of the Borrower and its Subsidiaries
taken as a whole or the ability of the Borrower to perform its obligations
hereunder or under any other Credit Document, (D) after receipt thereof, a
copy of the final report to each Regulated Insurance Company from the NAIC
for each fiscal year, as to such Company's compliance or noncompliance
with each of the NAIC Tests, (E) after receipt thereof, a copy of A.M.
Best's rating analysis for each Regulated Insurance Company for each
fiscal year, (F) and in any event within three Business Days after receipt
thereof, copies of any notice of actual suspension, termination or
revocation of any license of any Regulated Insurance Company by any
Applicable Insurance Regulatory Authority (other than any termination
voluntarily effected by such Regulated Insurance Company), including any
request by an Applicable Insurance Regulatory Authority which commits a
Regulated Insurance Company to take or refrain from taking any action or
which otherwise affects the authority of such Regulated Insurance Company
to conduct its business, and (G) and in any event within three Business
Days after the Borrower or any of its Subsidiaries obtains knowledge
thereof, notice of any actual changes in the insurance laws enacted in any
state in which any Regulated Insurance Company is domiciled which, in the
case of the foregoing clause (F) or (G), could (in the reasonable judgment
of the Borrower) have a material adverse effect on the condition
(financial or otherwise, determined pursuant to GAAP or SAP), businesses,
operations, properties, assets, liabilities or investments of the Borrower
and its Subsidiaries taken as a whole or on the ability of the Borrower to
perform its obligations under any Credit Document.
(h) Credit Rating Changes. Promptly, and in any
event within three Business Days after a senior officer
of the Borrower obtains knowledge thereof, notice of any
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change in the credit rating assigned by ▇▇▇▇▇'▇ or S&P to any long-term
debt of the Borrower (including without limitation any change in the
▇▇▇▇▇'▇ Credit Rating or the S&P Credit Rating).
(i) Other Information. Promptly upon transmission thereof, copies
of any filings and registrations with, and reports to, the SEC by the
Borrower or any of its Subsidiaries (other than any registration statement
on Form S-8) and copies of all financial statements, proxy statements,
notices and reports as the Borrower or any of its Subsidiaries shall send
to analysts generally or to the holders (other than the Borrower and its
Subsidiaries) of their capital stock in their capacity as such holders (in
each case to the extent not theretofore delivered to the Banks pursuant to
this Agreement) and, with reasonable promptness, such other information or
documents (financial or otherwise) as the Agent or any Bank may reasonably
request from time to time. By August 31, 1995, the unaudited consolidated
balance sheet of the Workers Compensation Subsidiaries as of June 30,
1995, and the related statements of income, of stockholders' equity and of
cash flows for the six-month period then ended, in each case prepared in
accordance with SAP (subject to normal year-end audit adjustments).
6.02 Books, Records and Inspections. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries in conformity in all material respects with
GAAP or SAP, as the case may be, and all requirements of law shall be made of
all dealings and transactions in relation to its business and activities. The
Borrower will, and will cause each of its Subsidiaries to, permit officers and
designated representatives of the Agent or any Bank to visit and inspect, during
regular business hours and under guidance of officers of the Borrower or such
Subsidiary, any of the properties or assets of the Borrower and any of its
Subsidiaries in whomsoever's possession (but only to the extent the Borrower or
such Subsidiary has the right to do so to the extent in the possession of
another Person), and to examine the books of account of the Borrower and any of
its Subsidiaries and discuss the affairs, finances and accounts of the Borrower
and of any of its Subsidiaries with, and be advised as to the same by, its and
their officers and independent accountants and independent actuaries, if any,
all at such reasonable times and intervals and to such reasonable extent as the
Agent or such Bank may request; provided, that so long as no Event of Default
has occurred and is continuing, such inspections shall not be made more
frequently than semi-annually.
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6.03 Insurance. The Borrower will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance in
such amounts, covering such risks and liabilities and with such deductibles or
self-insured retentions as are in accordance with normal industry practice. The
Borrower will, and will cause each of its Subsidiaries to, furnish annually to
the Banks a summary of the insurance carried.
6.04 Payment of Taxes. The Borrower will pay and discharge, and
will cause each of its Subsidiaries to pay and discharge, all taxes, assessments
and governmental charges or levies imposed upon it or upon its income or
profits, or upon any properties belonging to it, prior to the date on which
penalties attach thereto, and all lawful claims (other than claims relating to
the adjustment or settling, in the ordinary course of business, of claims in
respect of insurance policies or reinsurance contracts) which, if unpaid, might
become a Lien or charge upon any properties of the Borrower or any of its
Subsidiaries; provided that neither the Borrower nor any Subsidiary shall be
required to pay any such tax, assessment, charge, levy or claim which is being
contested in good faith and by proper proceedings if it has maintained adequate
reserves with respect thereto in accordance with GAAP or SAP, as the case may
be.
6.05 Corporate Franchises. The Borrower will do, and will cause
each Subsidiary to do, or cause to be done, all things necessary to preserve and
keep in full force and effect its corporate existence, rights and authority,
provided that any transaction permitted by Section 7.02 will not constitute a
breach of this Section 6.05.
6.06 Compliance with Statutes, etc. The Borrower will, and will
cause each Subsidiary to, comply in all material respects with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls).
6.07 ERISA. As soon as possible and, in any event, within 10 days
after the Borrower or any Subsidiary knows or has reason to know any of the
following (and with regard to Plans with respect to which an ERISA Affiliate
contributes pursuant to collective bargaining requirements or maintains, the
Borrower shall use its best efforts to obtain information therefrom regarding
any of the following), the Borrower will deliver to each of the Banks a
certificate of the Chief Financial Officer or other Authorized Officer of the
Borrower setting forth details as to such occurrence and
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such action, if any, which the Borrower, such Subsidiary or such ERISA Affiliate
is required or proposes to take, together with any notices required or proposed
to be given to or filed with or by the Borrower, the Subsidiary, the ERISA
Affiliate, the PBGC, a Plan participant (other than notices relating to an
individual participant's benefits) or the plan administrator with respect
thereto: that a Reportable Event has occurred, that an accumulated funding
deficiency has been incurred or an application has been or could reasonably be
expected to be made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard (including any required installment
payments) or an extension of any amortization period under Section 412 of the
Code with respect to a Plan, that a Plan which has an Unfunded Current Liability
has been or could reasonably be expected to be terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA, that a Plan has an
Unfunded Current Liability giving rise to a lien under ERISA or the Code, that
proceedings have been or could reasonably be expected to be instituted to
terminate a Plan which has an Unfunded Current Liability, that a proceeding has
been instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan, or that the Borrower, any Subsidiary or any ERISA
Affiliate will or could reasonably be expected to incur any liability (including
any contingent or secondary liability) to or on account of the termination of or
withdrawal from a Plan under Section 4062, 4063, 4064, 4201 or 4204 of ERISA.
Upon request of a Bank, the Borrower will deliver to such Bank a complete copy
of the annual report (Form 5500) of each Plan required to be filed with the
Internal Revenue Service. In addition to any certificates or notices delivered
to the Banks pursuant to the first sentence hereof, copies of any notices
received by the Borrower or any Subsidiary required to be delivered to the Banks
hereunder shall be delivered to the Banks no later than 10 days after the later
of the date such notice has been filed with the Internal Revenue Service or the
PBGC, given to Plan participants (other than notices relating to an individual
participant's benefits) or received by the Borrower or such Subsidiary.
6.08 Performance of Obligations. The Borrower will, and will cause
each of its Subsidiaries to, perform all of its obligations under the terms of
each mortgage, deed of trust, indenture, loan agreement, security agreement,
other debt instrument and each other material agreement, contract or instrument
by which it is bound or to which it is a party, except such non-performance as
could not individually or in the aggregate, reasonably be expected to have a
material adverse effect on the condition (financial or otherwise, determined in
accordance with GAAP or SAP), businesses, operations, properties, assets,
liabilities or investments of the Borrower and its Subsidiaries taken as a
whole.
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6.09 Good Repair. The Borrower will, and will cause each of its
Subsidiaries to, to the extent and in the manner customary for companies in
similar businesses, ensure that its material properties and equipment used or
useful in its business in whomsoever's possession they may be, are kept in good
repair, working order and condition, normal wear and tear excepted, and that
from time to time there are made in such properties and equipment all needful
and proper repairs, renewals, replacements, extensions, additions, betterments
and improvements thereto.
6.10 End of Fiscal Years; Fiscal Quarters. The Borrower will, for
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries' fiscal years to end on December 31 of each year and (ii) each of
its, and each of its Subsidiaries', fiscal quarters to end on March 31, June 30,
September 30 and December 31 of each year.
6.11 NAIC Tests. The Borrower shall cause FIC and its Subsidiaries
to maintain risk-based capital ratios that are above the minimum levels required
by the NAIC Tests below which FIC or such Subsidiary may be required to take
action of any kind as a result of such ratios (including communication with
regulatory authorities, etc.).
SECTION 7. Negative Covenants. The Borrower hereby covenants and
agrees that on the Amendment Effective Date and thereafter, for so long as this
Agreement is in effect and until such time as the Total Commitment has
terminated, no Notes are outstanding and the Loans and Competitive Bid Loans,
together with interest, Fees and all other Obligations incurred hereunder, are
paid in full:
7.01 Changes in Business. The Borrower will not, and will not
permit any of its Subsidiaries to, engage in any business other than the
ownership and management of property, casualty and life insurance and annuities
operations and financial services operations, and businesses reasonably related
or incidental thereto, provided that investments by the Borrower and its
Subsidiaries after the Amendment Effective Date in businesses other than those
of the type in which the Borrower and its Subsidiaries are engaged as of the
Amendment Effective Date shall be limited to $20,000,000 (it being understood
that for the purpose of this Section 7.01 an investment shall be deemed to be
the amount paid for the equity of a business, exclusive of Indebtedness of such
business assumed or remaining outstanding). Notwithstanding the preceding
sentence, no P&C Insurance Subsidiary shall engage in any business other than
the ownership and management of property and casualty insurance operations and
businesses reasonably related or incidental thereto; no Financial Services
Non-Thrift Subsidiary shall engage in any
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business other than the ownership and management of financial services
operations and businesses reasonably related or incidental thereto; and no
Thrift Subsidiary shall engage in any business other than the ownership and
management of thrift operations and businesses reasonably related or incidental
thereto.
7.02 Consolidation, Merger, Sale or Purchase of Assets, etc. The
Borrower will not, and will not permit any Subsidiary to, wind up, liquidate or
dissolve its affairs, or enter into any transaction of merger or consolidation,
or convey, sell, lease or otherwise dispose of (in one transaction or a series
of related transactions) all or any substantial part of its property or assets,
(but excluding any sale or disposition of property or assets in the ordinary
course of business), or purchase, lease or otherwise acquire (in one transaction
or a series of related transactions) all or any part of the property or assets
of any Person (excluding any purchases, leases or other acquisitions of property
or assets in, and for use in, the ordinary course of business, other than
Capital Expenditures, except to the extent permitted by clause (e) below, and
Investments, except to the extent permitted by clause (f) below) or agree to do
any of the foregoing at any future time, except that the following shall be
permitted:
(a) So long as no Default or Event of Default exists or would
exist immediately after giving effect thereto, the merger or consolidation
of any Wholly-Owned Subsidiary of the Borrower with or into another
Wholly- Owned Subsidiary of the Borrower, provided that no P&C Insurance
Subsidiary may merge or consolidate with any Financial Services
Subsidiary;
(b) Any Subsidiary that is a Discontinued
Subsidiary as of the Amendment Effective Date may be
sold, liquidated, wound up or dissolved;
(c) Any Subsidiary (other than FIG) not engaged to any significant
extent in any business other than acting as a holding company for other
Subsidiaries of the Borrower may be liquidated, wound up, dissolved, or
merged with its direct parent (if other than the Borrower) or direct
Subsidiary;
(d) The Borrower and its Subsidiaries may acquire new businesses
or operations (including without limitation by acquiring new
Subsidiaries), provided that (i) no Default or Event of Default exists or
would exist immediately after giving effect thereto, (ii) to the extent
that the consideration paid by the Borrower in respect of any such
acquisition consists solely of capital stock of the Borrower, the value of
the assets
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of such acquired entity, together with the value of the assets of any
other acquired entity or entities purchased with the capital stock of the
Borrower in the same fiscal year, shall not exceed 20% of the value of the
assets of the Borrower and its Subsidiaries on a consolidated basis as of
the last day of such fiscal year and (iii) to the extent that the
consideration paid by the Borrower in respect of any such acquisition is
other than all capital stock of the Borrower (including without limitation
cash and/or assumption of Indebtedness), the aggregate amount of
consideration paid by the Borrower and its Subsidiaries in respect
thereof, together with the aggregate amount paid in connection with other
acquisitions made pursuant to this clause (d), contributions made pursuant
to Section 5.05(c) and other investments made pursuant to Section 7.05(g),
in each case after the Amendment Effective Date, shall not exceed the
Permitted Basket Amount;
(e) The Borrower and its Subsidiaries may make Capital
Expenditures so long as the aggregate amount thereof made in any fiscal
year does not exceed $11,000,000;
(f) The Borrower and its Subsidiaries may acquire and dispose of
Investments so long as the Borrower is in compliance with Section 7.05
before and after giving effect thereto; and
(g) The Securitization Subsidiaries may (i) convey and transfer,
or, as the case may be, purchase and acquire, the interests contemplated
by the securiti- zation transactions to which they respectively are or may
after the date hereof become parties, (ii) purchase or sell participating
interests, whether evidenced by certificates, debt instruments, or
otherwise, in the securitization transactions to which they respectively
are or may after the date hereof become parties and (iii) be liquidated,
wound up or dissolved following the termination of the securitization
transactions to which they are respectively parties.
7.03 Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of the Borrower or any such Subsidiary whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable or notes with recourse to the
Borrower or any of its Subsidiaries) or assign any right to receive income, or
file or permit the filing of any ▇▇▇▇▇-
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cing statement under the UCC or any other similar notice of Lien under any
similar recording or notice statute, except:
(a) Liens for taxes not yet due or Liens for taxes being contested
in good faith and by appropriate proceedings for which adequate reserves
have been established in accordance with GAAP or SAP, as the case may be;
(b) Liens in respect of property or assets of any of the
Borrower's Subsidiaries imposed by law which were incurred in the ordinary
course of business, such as carriers', warehousemen's and mechanics' Liens
and other similar Liens arising in the ordinary course of business, and
(x) which do not in the aggregate materially detract from the value of
such property or assets or materially impair the use thereof in the
operation of the business of the Borrower or any Subsidiary or (y) which
are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the
property or asset subject to such Lien;
(c) Liens created by this Agreement or the other
Credit Documents;
(d) Liens in existence on the Amendment Effective Date which are
listed, and the property subject thereto on the Amendment Effective Date
described, in Annex VI, without giving effect to any extensions or
renewals thereof;
(e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 8.08;
(f) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, performance
and return-of-money bonds and other similar obligations incurred in the
ordinary course of business (exclusive of obligations in respect of the
payment for borrowed money);
(g) Leases or subleases granted to others not interfering in any
material respect with the business of the Borrower or any of its
Subsidiaries and any interest or title of a lessor under any lease not in
violation of this Agreement;
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(h) Easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the
business of the Borrower or any of its Subsidiaries;
(i) Liens arising from UCC financing statements
regarding leases not in violation of this Agreement;
(j) Liens incurred in the ordinary course of business by a
Regulated Insurance Company on securities to secure repurchase and reverse
repurchase obligations in respect of such securities;
(k) Liens constituting pledges or deposits of cash or securities
made by any Regulated Insurance Company as a condition to obtaining or
maintaining any licenses issued to it by any Applicable Insurance
Regulatory Authority;
(l) Liens arising pursuant to purchase money mortgages securing
Indebtedness representing the purchase price (or financing of the purchase
price within 90 days after the respective purchase) of assets acquired
after the Amendment Effective Date, provided that (i) any such Liens
attach only to the assets so purchased, attachments thereto and proceeds
thereof, (ii) the principal amount of the Indebtedness secured by any such
Lien does not exceed 100%, nor is less than 70%, of the lesser of the fair
market value or the purchase price of the property being purchased at the
time of the incurrence of such Indebtedness and (iii) the aggregate
outstanding principal amount of Indebtedness secured by Liens permitted by
this clause (l) shall not exceed $5,000,000 at any time;
(m) Liens on property or assets acquired pursuant to Section
7.02(d) after the Amendment Effective Date, or on property or assets of a
Subsidiary of the Borrower in existence at the time such Subsidiary is
acquired pursuant to Section 7.02(d), provided that (i) any Indebtedness
that is secured by such Liens is otherwise permitted to be incurred under
Section 7.04, and (ii) such Liens are not incurred in contemplation of
such acquisition and do not attach to any other asset of the Borrower or
any of its Subsidiaries;
(n) Liens which constitute rights of set-off of a customary nature
or bankers' liens on amounts on deposit, whether arising by contract or by
operation of law, in connection with arrangements entered into with
depository institutions in the ordinary course of business;
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(o) Liens encumbering customary initial deposits and margin
deposits, and similar Liens attaching to commodity trading accounts or
other brokerage accounts and the funds or investments on deposit therein,
incurred in the ordinary course of business, securing Indebtedness under
Interest Rate Protection Agreements or Other Hedging Agreements or in
respect of repurchase obligations permitted by Section 7.04(f);
(p) Liens constituting extensions, renewals or replacements of any
Lien referred to in clause (l) or (m) above, provided that the principal
amount of the Indebtedness secured thereby is not increased and that any
such extension, renewal or replacement Lien attaches only to the property
originally encumbered thereby;
(q) Liens on assets of the Thrift Subsidiaries securing
Indebtedness owing by such Thrift Subsidiaries to the Federal Home Loan
Bank;
(r) Liens on assets of the Securitization
Subsidiaries; and
(s) liens on assets of FGC or on assets of any Subsidiary of FGC
(other than any such Subsidiary that engages in banking or thrift
operations or the activities of which are limited to holding the stock or
securities of another Subsidiary or Subsidiaries of FGC engaged in banking
or thrift operations), provided that (i) the principal amount of the
Indebtedness secured by any such Lien does not exceed 80% of the lesser of
the fair market value or the purchase price of asset being encumbered at
the time of the incurrence of such Indebtedness and (ii) the aggregate
outstanding principal amount of Indebtedness secured by Liens permitted by
this clause (s) shall not exceed $300,000,000 at any time.
7.04 Indebtedness. The Borrower will not, and will not permit any
of its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this
Agreement and the other Credit Documents;
(b) Permitted Subordinated Debt;
(c) Indebtedness (including, without limitation, Contingent
Obligations) in existence on the Amendment Effective Date which is listed
on Annex V, without giving effect to any subsequent extension, renewal or
refinancing thereof;
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(d) Indebtedness of the Borrower incurred after the Amendment
Effective Date constituting guaranties of Indebtedness of the Financial
Services Non-Thrift Subsidiaries;
(e) Permitted Acquisition Debt of any P&C
Insurance Subsidiary;
(f) Repurchase obligations of any P&C Insurance Subsidiary
incurred in the ordinary course of business for short term liquidity
management purposes;
(g) Additional Indebtedness of P&C Insurance Subsidiaries
consisting of reimbursement obligations in respect of letters of credit,
or other Contingent Obligations, so long as the aggregate outstanding
principal amount of Indebtedness incurred under this clause (g) does not
exceed $20,000,000 at any time;
(h) other Indebtedness of P&C Insurance Subsidiaries not to exceed
$1,000,000 in aggregate outstanding principal amount for all P&C Insurance
Subsidiaries at any time;
(i) Indebtedness of (x) the Financial Services Non-Thrift
Subsidiaries, provided, that the proceeds of such Indebtedness (other than
the proceeds of securitization transactions entered into by Securitization
Subsidiaries) are used to fund the operations of, and acquisitions by,
such Financial Services Non-Thrift Subsidiaries and no part of such
proceeds are advanced, loaned or distributed to the Borrower or any of its
other Subsidiaries (other than other Financial Services Non-Thrift
Subsidiaries), and (y) the Thrift Subsidiaries, provided, that the
proceeds of such Indebtedness are used to fund the operations of, and
acquisitions by, such Thrift Subsidiaries and no part of such proceeds are
advanced, loaned or distributed to the Borrower or any of its other
Subsidiaries (other than other Thrift Subsidiaries);
(j) Indebtedness owing to brokers in respect of accounts
maintained with such brokers, including margin deposits, incurred in the
ordinary course of business;
(k) Indebtedness consisting of Interest Rate Protection Agreements
or Other Hedging Agreements entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business, so long as such
Agreements are entered into in respect of the assets or obligations of the
Borrower or such Subsidiary for bona fide hedging purposes and not for
purposes of speculation;
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(l) Indebtedness of the Borrower owing to any Subsidiary (other
than a Thrift Subsidiary), Indebtedness of any Subsidiary (other than a
Thrift Subsidiary) owing to the Borrower, Indebtedness of any P&C
Insurance Subsidiary owing to any other P&C Insurance Subsidiary,
Indebtedness of any Financial Services Non-Thrift Subsidiary owing to any
other Financial Services Non-Thrift Subsidiaries and Indebtedness of any
Thrift Subsidiary owing to any other Thrift Subsidiary; and
(m) any guaranty by a P&C Insurance Subsidiary of the obligations
of another P&C Insurance Subsidiary, or by a Financial Services Non-Thrift
Subsidiary of the obligations of another Financial Services Non-Thrift
Subsidiary, or by a Thrift Subsidiary of the obligations of another Thrift
Subsidiary.
7.05 Investments. (a) The Borrower will not permit any P&C
Insurance Subsidiary to purchase or otherwise acquire any Non-Investment Grade
Security if at such time, or immediately after giving effect thereto, the fair
market value (determined on a consolidated basis) of all Investments of the P&C
Insurance Subsidiaries (other than Investments in the P&C Insurance
Subsidiaries) in Non-Investment Grade Securities would exceed 10% of the fair
market value (determined on a consolidated basis) of all Investments of the P&C
Insurance Subsidiaries (other than Investments in P&C Insurance Subsidiaries).
(b) The Borrower will not permit the fair market value (determined
on a consolidated basis) of all real property (including real property leasehold
interests) and mortgage loans (excluding mortgage-backed securities) held by the
P&C Insurance Subsidiaries to exceed 5% of the fair market value (determined on
a consolidated basis) of all Investments of the P&C Insurance Subsidiaries.
(c) The Borrower will not permit the fair market value of all real
property (including real property leasehold interests) and mortgage loans
(excluding mortgage-backed securities) held by the Borrower to exceed
$35,000,000.
(d) The Borrower will not, and will not permit FIC and its
Subsidiaries to, materially alter their respective investment strategies from
those in effect on the Amendment Effective Date.
(e) The Borrower will not permit any P&C Insurance Subsidiary to
make or permit to remain outstanding any Investment in the Borrower or any of
its Subsidiaries or Affiliates (other than another P&C Insurance Subsidiary) if
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the aggregate book value of all such Investments shall at any time exceed 25% of
FIC Consolidated Surplus at such time.
(f) The Borrower will not, and will not permit any of its
Subsidiaries to, make any real estate construction loans.
(g) The Borrower will not, and will not permit any of its
Subsidiaries to, lend money or credit or make advances to any Financial Services
Subsidiary, or purchase or acquire any capital stock, obligations (including
loans) or securities of, or any other interest in, or make any capital
contribution to, any Financial Services Subsidiary, except (i) the Borrower may
purchase, acquire or otherwise participate in mortgage loans purchased or
originated by FIL to the extent permitted by Section 7.05(c) and (ii) to the
extent the aggregate amount of such purchases, acquisitions and contributions
(excluding from such aggregate amount those purchases, acquisitions and
participations described in clause (i) above) made pursuant to this Section
7.05(g), contributions made pursuant to Section 5.05(c) and acquisitions made
pursuant to Section 7.02(d), in each case after the Amendment Effective Date,
does not exceed the Permitted Basket Amount. Notwithstanding the foregoing
sentence, in no event shall the Borrower permit any of its Subsidiaries (other
than Thrift Subsidiaries) to, lend money or credit or make advances to any
Thrift Subsidiary, or purchase or acquire any capital stock, obligations
(including loans) or securities of, or any other interest in, or make any
capital contribution to, any Thrift Subsidiary.
7.06 Prepayments and Modifications of Permitted
Subordinated Debt and Liquid Yield Option Notes. The Bor-
rower will not, and will not permit any of its Subsidiaries
to:
(a) make (or give any notice in respect thereof) any voluntary or
optional payment or prepayment or redemption or repurchase (including by
virtue of the exercise of any put right) or acquisition for value of
(including, without limitation, by way of depositing with the trustee with
respect thereto money or securities before due for the purpose of paying
when due), or exchange of, the Liquid Yield Option Notes or, after its
issuance, any Permitted Subordinated Debt; or
(b) amend or modify (or permit the amendment or modification of)
any of the terms or provisions of the Liquid Yield Option Notes or, after
its issuance, any Permitted Subordinated Debt, except for amendments or
modifications the sole effect of which is to reduce the interest rate,
extend the maturity, waive covenant compliance or reduce covenant
requirements and do not
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involve the payment of any fee or other compensation to the holders of the
Liquid Yield Option Notes or, after its issuance, such Permitted
Subordinated Debt.
7.07 Restrictions on Subsidiary Payments. (a) The Borrower will
not, and will not permit any of its P&C Insurance Subsidiaries to, create or
otherwise cause or suffer to exist any encumbrance or restriction which
prohibits or otherwise restricts (x) the ability of any P&C Insurance Subsidiary
to (a) pay dividends or make other distributions or pay any Indebtedness owed to
the Borrower or any P&C Insurance Subsidiary, (b) make loans or advances to the
Borrower or any P&C Insurance Subsidiary, (c) transfer any of its properties or
assets to the Borrower or any P&C Insurance Subsidiary or (d) guarantee the
Obligations or (y) the ability of the Borrower or any P&C Insurance Subsidiary
of the Borrower to create, incur, assume or suffer to exist any Lien upon its
property or assets to secure the Obligations, other than prohibitions or
restrictions existing under or by reason of (i) this Agreement or the other
Credit Documents, (ii) Legal Requirements, (iii) customary non- assignment
provisions entered into in the ordinary course of business and consistent with
past practices, (iv) purchase money obligations for property acquired in the
ordinary course of business, so long as such obligations are permitted under
this Agreement, (v) any restriction or encumbrance with respect to a P&C
Insurance Subsidiary of the Borrower imposed pursuant to an agreement which has
been entered into for the sale or disposition of all or substantially all of the
capital stock or assets of such P&C Insurance Subsidiary, so long as such sale
or disposition is permitted under this Agreement, (vi) any provision contained
in the Credit Agreement, dated as of August 24, 1995, among FFC, the various
lenders party thereto, First Interstate Bank of California and Natwest Bank as
co-agents, and The Chase Manhattan Bank, N.A. as agent, which restricts payment
of dividends to the Borrower on common or preferred stock of FFC, and (vii)
Liens permitted under Section 7.03 and any documents or instruments governing
the terms of any Indebtedness or other obligations secured by any such Liens,
provided, that such prohibitions or restrictions apply only to the assets
subject to such Liens.
(b) The Borrower will not, and will not permit any Financial
Services Subsidiary which is an obligor in respect of a Proceeds Loan (so long
as such Proceeds Loan remains outstanding) to, create or otherwise cause or
suffer to exist any encumbrance or restriction which prohibits or otherwise
restricts the ability of such Financial Services Subsidiary to repay such
Proceeds Loan, together with interest thereon, other than prohibitions or
restrictions existing under or by reason of (i) this Agreement or the other
Credit Documents or (ii) Legal Requirements.
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7.08 Transactions with Affiliates. The Borrower will not, and will
not permit any Subsidiary to, enter into any transaction or series of
transactions with any Affiliate (other than the Borrower or a Subsidiary of the
Borrower), other than on terms and conditions substantially as favorable to the
Borrower or such Subsidiary as would be obtainable by the Borrower or such
Subsidiary at the time in a comparable arm's-length transaction with a Person
other than an Affiliate. In addition, in transactions in which the Borrower
purchases or participates in loans made by a Financial Services Subsidiary, the
Borrower and such Financial Services Subsidiary will not use selection criteria
for determining the particular loans that will be purchased or participated in
by the Borrower that are adverse to the Borrower.
7.09 Issuance of Stock. The Borrower will not issue any shares of
preferred stock, preference stock or redeemable common stock. The Borrower shall
not permit any of its P&C Insurance Subsidiaries to issue any shares of common
stock, preferred stock, preference stock or redeemable common stock or any
options or warrants to purchase, or securities convertible into, any such stock,
except for common stock issued to the Borrower or Wholly-Owned Subsidiaries of
the Borrower.
7.10 Liabilities to Policyholder Surplus Ratio. The Borrower shall
not permit the Liabilities to Policyholder Surplus Ratio of FIC and its
Subsidiaries (determined on a consolidated basis) at any time to exceed 6.00 to
1.
7.11 Net Premiums Written Ratio. The Borrower will not permit the
ratio of (i) Net Premiums Written of the Workers Compensation Subsidiaries (on a
consolidated basis) for any fiscal year to (ii) Policyholder Surplus of the
Workers Compensation Subsidiaries (on a consolidated basis) on the last day of
such fiscal year to exceed 3.0:1.0.
7.12 Leverage Ratio. The Borrower will not permit the ratio of (i)
Total Indebtedness to (ii) Total Capitalization at any time to exceed 0.6 to
1.0:
7.13 Minimum Consolidated Net Worth. The
Borrower will not permit Consolidated Net Worth at any time
to be less than $375,000,000.
7.14 Interest Coverage Ratio. The Borrower will not permit the
ratio of (i) Consolidated EBIT to (ii) Consolidated Interest Expense for any
period of four consecutive fiscal quarters of the Borrower (taken as one
accounting period) to be less than 3.0 to 1.0.
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7.15 FIC Consolidated Surplus. The Borrower will not permit FIC
Consolidated Surplus at any time to be less than $225,000,000.
7.16 Insured Depository Subsidiaries. (a) The
Borrower will not permit any Insured Depository Subsidiary to
be or become "undercapitalized", "significantly
undercapitalized" or "critically undercapitalized" for
purposes of 12 U.S.C. ss. 1831o, as amended, restated or
redesignated from time to time.
(b) The Borrower shall not, nor shall it permit any Subsidiary
(including, without limitation, any Insured Depository Subsidiary) to, submit a
"capital restoration plan" or enter into a "capital management agreement" under
12 U.S.C. ss. 1831o(b)(2)(C), as amended, restated or redesignated from time to
time, with respect to any Insured Depository Subsidiary, except for the
Permitted Capital Management Agreement. The Borrower shall not, nor shall it
permit FIL or any other Subsidiary to, amend, modify or supplement the Permitted
Capital Management Agreement in any material respect.
7.17 Permitted CIC Acquisition Subordinated Note. The Borrower
will not amend, modify or change (or permit the amendment or modification of) or
enter into any new agreement with respect to, any of the terms or provisions of
the Permitted CIC Acquisition Subordinated Note. The Borrower shall repay the
Permitted CIC Acquisition Subordinated Note in full no later than December 31,
1995.
SECTION 8. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
8.01 Payments. The Borrower shall (i) default in the payment when
due of any principal of the Loans or Competitive Bid Loans or (ii) default, and
such default shall continue for two or more days, in the payment when due of any
interest on the Loans or Competitive Bid Loans or any Fees or any other amounts
owing hereunder or under any other Credit Document; or
8.02 Representations, etc. Any representation, warranty or
statement made or deemed made by the Borrower or any of its Subsidiaries herein
or in any other Credit Document or in any statement or certificate delivered or
required to be delivered pursuant hereto or thereto shall prove to have been
untrue in any material respect on the date as of which made or deemed made; or
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8.03 Covenants. The Borrower shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 6.10, 6.11 or 7, or (b) default in the due performance or observance by
it of any term, covenant or agreement (other than those referred to in Sections
8.01, 8.02, 8.07 or clause (a) of this Section 8.03) contained in this Agreement
or in the Pledge Agreement and such default shall continue unremedied for a
period of at least 30 consecutive days; or
8.04 Default Under Other Agreements. (a) The Borrower or any of
its Subsidiaries shall (i) default in any payment with respect to Indebtedness
(other than the Loans and Competitive Bid Loans) in excess of $5,000,000
individually or in the aggregate, for the Borrower and its Subsidiaries, beyond
the period of grace, if any, provided in the instrument or agreement under which
such Indebtedness was created or (ii) default in the observance or performance
of any agreement or condition relating to any such Indebtedness or contained in
any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause (determined without regard to whether any notice or lapse of time is
required), any such Indebtedness to become due prior to its stated maturity; or
(b) any such Indebtedness of the Borrower or any of its Subsidiaries shall be
declared to be due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment, prior to the stated maturity thereof;
or
8.05 Bankruptcy, etc. The Borrower or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect and applicable,
or any successor thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against the Borrower or any of its Subsidiaries and, with respect to
any such case commenced under the Bankruptcy Code, the petition is not
controverted within 10 days, or is not dismissed within 60 consecutive days,
after commencement of the case; or a custodian (as defined in the Bankruptcy
Code) is appointed for, or takes charge of, all or substantially all of the
property of the Borrower or any of its Subsidiaries; or the Borrower or any of
its Subsidiaries commences (including by way of applying for or consenting to
the appointment of, or the taking of possession by, a rehabilitator, receiver,
custodian, trustee, conservator or liquidator (collectively, a "conservator") of
itself or all or any substantial portion of its property, whether or not
confidential) any other proceeding under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency, liquidation,
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rehabilitation, conservatorship or similar law of any jurisdiction whether now
or hereafter in effect relating to the Borrower or any of its Subsidiaries; or
any such proceeding is commenced against (a) any Regulated Insurance Company
which is engaged in the business of underwriting insurance and/or reinsurance in
the United States, whether or not such proceeding is consented to by such
Person, or (b) the Borrower or any of its Subsidiaries (other than any Regulated
Insurance Company described in the immediately preceding clause (a)), whether or
not such proceeding is consented to by such Person but only to the extent that
such proceeding remains undismissed for a period of 60 consecutive days; or the
Borrower or any of its Subsidiaries is adjudicated insolvent or bankrupt; or any
order of relief or other order approving any such case or proceeding is entered;
or (a) any Regulated Insurance Company which is engaged in the business of
underwriting insurance and/or reinsurance in the United States suffers any
appointment of any conservator or the like for it or any substantial part of its
property, or (b) the Borrower or any of its Subsidiaries (other than any
Regulated Insurance Company described in the immediately preceding clause (a))
suffers any appointment of any conservator or the like for it or substantially
all of its property which continues undischarged or unstayed for a period of 60
consecutive days; or the Borrower or any of its Subsidiaries makes a general
assignment for the benefit of creditors; or any formal corporate action is taken
by the Borrower or any of its Subsidiaries for the purpose of effecting any of
the foregoing; or
8.06 ERISA. (a) Any Plan shall fail to maintain the minimum
funding standard required by Section 412 of the Code for any plan year or part
thereof or a waiver of such standard or extension of any amortization period is
sought or granted under Section 412 of the Code or shall provide security to
induce the issuance of such waiver or extension, (b) any Plan is or shall have
been terminated or the subject of termination proceedings under ERISA or an
event has occurred entitling the PBGC to terminate a Plan under Section 4042(a)
of ERISA, (c) any Plan shall have an Unfunded Current Liability or (d) the
Borrower or a Subsidiary or any ERISA Affiliate has incurred or is likely to
incur a material liability to or on account of a termination of or a withdrawal
from a Plan under Section 515, 4062, 4063, 4064, 4201 or 4204 of ERISA; and
there shall result from any such event or events described in the preceding
clauses of this Section 8.06 the imposition of a lien upon the assets of the
Borrower or any Subsidiary or any ERISA Affiliate, the granting of a security
interest, or a liability or a material risk of incurring a liability to the PBGC
or a Plan or a trustee appointed under ERISA or a penalty under Section 4971 or
4975 of the Code or Section 409, 502(i) or 502(l) of ERISA, any of which,
individually or in the aggregate, would have a material adverse
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effect upon the condition (financial or otherwise, determined pursuant to GAAP
or SAP), businesses, operations, properties, assets, liabilities, investments or
prospects of the Borrower and its Subsidiaries taken as a whole; or
8.07 Pledge Agreement. Except in each case to the extent resulting
from the negligent or willful failure of the Collateral Agent to retain
possession of any Pledged Stock, the Pledge Agreement shall cease to be in full
force and effect, or shall cease to give the Collateral Agent the Liens, rights,
powers and privileges purported to be created thereby (including, without
limitation, a first priority perfected security interest in, and Lien on, all of
the Collateral subject thereto, in favor of the Collateral Agent, superior to
and prior to the rights of all third Persons, and subject to no other Liens
other than Non-Consensual Permitted Liens), or the Borrower or any other pledgor
thereunder shall default in the due performance or observance of any material
term, covenant or agreement on its part to be performed or observed pursuant to
the Pledge Agreement; or
8.08 Judgments. One or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving a liability of
$1,000,000 or more in the aggregate for all such judgments and decrees for the
Borrower and its Subsidiaries and any such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within 30 days from
the entry thereof; or
8.09 Ownership. (a) There shall occur a Change
of Control;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent shall, upon the written request of the
Required Banks, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Agent or any Bank to
enforce its claims against the Borrower, except as otherwise specifically
provided for in this Agreement (provided that if an Event of Default specified
in Section 8.05 shall occur with respect to the Borrower, the result which would
occur upon the giving of written notice by the Agent as specified in clauses (i)
and (ii) below shall occur automatically without the giving of any such notice):
(i) declare the Total Commitment (or the unutilized portion thereof) terminated,
whereupon the Commitment (or the unutilized portion thereof, as the case may be)
of each Bank shall forthwith terminate immediately; (ii) declare the principal
of and any accrued interest in respect of all Loans and Competitive Bid Loans
and all Obligations owing hereunder and under the other Credit Documents to be,
whereupon the same shall become, forthwith due and payable without present-
ment, demand, protest or other notice of any kind, all of
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which are hereby waived by the Borrower; and/or (iii) enforce, as Collateral
Agent (or direct the Collateral Agent to enforce), any or all of the Liens and
security interests created pursuant to the Pledge Agreement.
SECTION 9. Definitions. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Absolute Rate" shall mean an interest rate (rounded to the
nearest .0001) expressed as a decimal.
"Absolute Rate Borrowing" shall mean a Competitive Bid Borrowing
with respect to which the Borrower has requested that the Banks offer to make
Competitive Bid Loans at Absolute Rates.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by, or under direct or
indirect common control with, such Person. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power (i) to
vote 10% or more of the securities having ordinary voting power for the election
of directors of such corporation or (ii) to direct or cause the direction of the
management and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise.
"Agent" shall have the meaning provided in the first paragraph of
this Agreement and shall include any successor to the Agent appointed pursuant
to Section 10.09.
"Aggregate Loan Outstandings" shall have the
meaning provided in Section 3.02(a).
"Agreement" shall mean this Amended and Restated Credit Agreement,
as the same may be from time to time modified, amended and/or supplemented.
"Amendment Effective Date" shall have the meaning
provided in Section 4.01.
"Applicable Base Rate Margin" shall mean, for any day, the rate
per annum set forth below opposite the Applicable Rating Period then in effect:
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Applicable Rating Applicable Base
Period Rate Margin
Category A Period 0.000%
Category B Period 0.000%
Category C Period 0.000%
Category D Period 0.100%
"Applicable Eurodollar Margin" shall mean, for any day, the rate per
annum set forth below opposite the Applicable Rating Period then in effect:
Applicable Rating Applicable Eurodollar
Period Margin
Category A Period 0.350%
Category B Period 0.450%
Category C Period 0.875%
Category D Period 1.300%
"Applicable Facility Fee Percentage" shall mean, for any day, the
percentage set forth below opposite the Applicable Rating Period then in effect:
Applicable Rating Applicable Facility
Period Fee Percentage
Category A Period 0.250%
Category B Period 0.300%
Category C Period 0.375%
Category D Period 0.450%
"Applicable Insurance Regulatory Authority" shall mean, when used
with respect to any Regulated Insurance Company, the insurance department or
similar administrative authority or agency located in (x) each state or other
jurisdiction in which such Regulated Insurance Company is domiciled or (y) to
the extent asserting regulatory jurisdiction over such Regulated Insurance
Company, the insurance department, authority or agency in each state or other
jurisdiction in which such Regulated Insurance Company is licensed, and shall
include any Federal insurance regulatory department, authority or agency that
may be created and that asserts regulatory jurisdiction over such Regulated
Insurance Company.
"Applicable Rating Period" shall mean, subject to the terms and
conditions set forth below in this definition, the period set forth below then
in effect:
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Applicable Rating
Period Criteria
Category A Period The S&P Credit Rating is BBB+ or above or
the ▇▇▇▇▇'▇ Credit Rating is Baa1 or above.
Category B Period The S&P Credit Rating is BBB- or above or
the ▇▇▇▇▇'▇ Credit Rating is Baa3 or above, but no
Category A Period is in effect at such time.
Category C Period The S&P Credit Rating is BB+ or above or
the ▇▇▇▇▇'▇ Credit Rating is Ba1 or above, but no
Category A or B Period is in effect at such time.
Category D Period The S&P Credit Rating is below BB+ and
the ▇▇▇▇▇'▇ Credit Rating is below Ba1.
If (a) only one of a ▇▇▇▇▇'▇ Credit Rating and an S&P Credit Rating exists at
any time (the Rating Agency which has assigned a Credit Rating is hereinafter
referred to as the "Assigning Rating Agency" and the Rating Agency which has no
assigned Credit Rating is hereinafter referred to as the "Non-Assigning Rating
Agency") and (b) the Non-Assigning Rating Agency either (i) states an implied
rating for the Borrower's senior long-term debt and/or (ii) assigns a Credit
Rating to the Liquid Yield Option Notes, then the Applicable Rating Period shall
be determined as set forth above based on the Credit Rating of the Assigning
Rating Agency and the stated implied senior debt rating of the Non-Assigning
Rating Agency or, if no such stated implied senior debt rating exists, one "full
rating" above the Credit Rating assigned by the Non-Assigning Rating Agency to
the Liquid Yield Option Notes (it being understood that a "full rating" shall
include numerical modifiers and (+) and (-) modifiers). In the event that an
Assigning Rating Agency has assigned a Credit Rating and the Non-Assigning
Rating Agency does not state an implied rating for the Borrower's senior
long-term debt or assign a Credit Rating to the Liquid Yield Option Notes, then
the Applicable Rating Period shall be determined as set forth above based on
such Credit Rating.
In the event that (a) no Credit Rating exists with respect to the Borrower's
senior long-term debt, then the Applicable Rating Period shall be determined as
follows: (a) if both ▇▇▇▇▇'▇ and S&P state an implied rating for any senior
long-term debt of the Borrower, then the Applicable Rating Period shall be
determined by reference to such implied ratings; or (b) if (i) only one of
▇▇▇▇▇'▇ and S&P states an implied
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rating for any senior long-term debt of the Borrower and (ii) the Non-Assigning
Rating Agency assigns a Credit Rating to the Liquid Yield Option Notes, then the
Applicable Rating Period shall be determined as set forth above based on the
stated implied senior debt rating of the Assigning Rating Agency and one "full
rating" above the Credit Rating of the Non-Assigning Rating Agency assigned to
the Liquid Yield Option Notes.
In the event that (a) no Credit Rating exists with respect to the Borrower's
senior long-term debt and no stated implied rating exists for the senior
long-term debt of the Borrower, then the Applicable Rating Period shall be
determined as follows: (a) if both ▇▇▇▇▇'▇ and S&P assign a Credit Rating to the
Liquid Yield Option Notes, then the Applicable Rating Period shall be one "full
rating" above such assigned ratings; (b) if only one of ▇▇▇▇▇'▇ and S&P assigns
a Credit Rating to the Liquid Yield Option Notes, then the Applicable Rating
Period shall be one "full rating" above the Credit Rating assigned to the Liquid
Yield Option Notes assigned by the Assigning Rating Agency.
In the event of a split rating of two or more rating levels, the rating level
one below the higher rating level shall apply. If any Credit Rating shall be
changed by ▇▇▇▇▇'▇ or S&P, such change shall be effective for purposes of this
definition as of the Business Day following the day on which the Borrower
notifies the Banks of such change pursuant to Section 6.01(h), provided that if
such change represents a downgrade and the Borrower fails to notify the Banks
thereof pursuant to Section 6.01(h), then such change shall be effective on the
fourth Business Day after a senior officer obtained knowledge of such downgrade.
Any change in the Applicable Rating Period due to a change in a Credit Rating
shall apply during the effective date of such change and ending on the date
immediately preceding the effective date of the next such change. In the event
that and for so long as the Borrower has no senior debt or Liquid Yield Option
Notes that is rated by ▇▇▇▇▇'▇ or S&P including, without limitation, stated
implied rating, then a Category D Period shall be deemed to exist.
"Authorized Officer" shall mean any senior officer of the Borrower
designated as such in writing by the Borrower to, and found acceptable by, the
Agent.
"Bank" shall have the meaning provided in the first
paragraph of this Agreement.
"Bankruptcy Code" shall have the meaning provided
in Section 8.05.
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"Base Rate" at any time shall mean the higher of (x) the rate which
is 1/2 of 1% plus the Federal Funds Effective Rate and (y) the Prime Lending
Rate as in effect from time to time.
"Base Rate Loans" shall mean each Loan bearing interest at the rates
provided in Section 1.09(a).
"Bermuda" shall mean Fremont Reinsurance Company,
Ltd., a Bermuda corporation.
"Bidder Bank" shall mean each Bank that has notified in writing (and
has not withdrawn such notice) the Agent that it desires to participate
generally in the bidding arrangements relating to Competitive Bid Borrowings.
"Borrower" shall have the meaning provided in the
first paragraph of this Agreement.
"Borrowing" shall mean (i) the incurrence of one Type of Loan by the
Borrower from all of the Banks on a pro rata basis on a given date (or resulting
from conversions on a given date), having in the case of Eurodollar Loans the
same Interest Period, provided that Base Rate Loans incurred pursuant to Section
1.11(b) shall be considered part of any related Borrowing of Eurodollar Loans or
(ii) a Competitive Bid Borrowing.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans or Competitive Bid Loans
priced by reference to the Eurodollar Rate, any day which is a Business Day
described in clause (i) and which is also a day for trading by and between banks
in U.S. dollar deposits in the interbank Eurodollar market.
"Capital Expenditures" shall mean expenditures by any Person that,
in conformity with GAAP, are or are required to be included in the property,
plant or equipment reflected in the balance sheet of such Person.
"Capital Lease" as applied to any Person, shall mean any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in conformity with GAAP, is, or is required to be, accounted for as a capital
lease on the balance sheet of that Person.
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"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.
"Change of Control" shall mean (i) the Borrower shall cease to own,
directly, 100% of the capital stock of FIG, or FIG shall cease to own, directly
or indirectly, 100% of the capital stock of FIC, (ii) the acquisition, whether
directly or indirectly, by any Person or "group" (as defined in Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended) (other than an employee
benefit or stock ownership plan of the Borrower) of more than 30% of the voting
stock of the Borrower or (iii) during any period of 25 consecutive calendar
months, a majority of the Board of Directors of the Borrower shall no longer be
composed of individuals (x) who were members of said Board on the first day of
such period, (y) whose election or nomination to said Board was approved by
individuals referred to in clause (x) above constituting at the time of such
election or nomination at least a majority of said Board or (z) whose election
or nomination to said Board was approved by individuals referred to in clauses
(x) and (y) above constituting at the time of such election or nomination at
least a majority of said Board.
"Chase" shall mean The Chase Manhattan Bank, N.A.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
"Collateral" shall mean all of the Collateral as
defined in the Pledge Agreement.
"Collateral Agent" shall mean the Agent acting as
collateral agent for the Banks.
"Commitment" shall mean, with respect to each Bank, the amount set
forth opposite such Bank's name in Annex I hereto, as the same may be reduced or
terminated pursuant to Sections 2.02, 2.03 and/or 8.
"Competitive Bid Borrowing" shall mean a Borrowing
of Competitive Bid Loans pursuant to Section 1.04.
"Competitive Bid Loan" shall have the meaning
provided in Section 1.01(b).
"▇▇▇▇▇▇▇▇" shall mean ▇▇▇▇▇▇▇▇ Insurance Company, an insurance
company organized under the laws of California.
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"Consolidated EBIT" shall mean, for any period, the sum of (i)
Consolidated Net Income of the Borrower for such period, (ii) provisions for
taxes based on income or profits to the extent such income or profits were
included in computing Consolidated Net Income for such period and (iii)
Consolidated Interest Expense (including amortization of original issue discount
and the interest component of Capitalized Lease Obligations), net of interest
income, thereto- fore deducted from earnings in computing Consolidated Net
Income for such period, provided that in determining Consolidated EBIT for any
period there shall be excluded any portion thereof otherwise included therein
(whether positive or negative) attributable to FFC and its Subsidiaries.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that attributable to Capital Leases in accordance
with GAAP) of the Borrower and its Subsidiaries for such period, but excluding
therefrom all Excluded Interest Expense.
"Consolidated Net Income" shall mean, for any period, the net income
(or loss) of the Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period, as determined in accordance with
GAAP.
"Consolidated Net Worth" shall mean, at any time, Net Worth of the
Borrower and its Subsidiaries determined on a consolidated basis in accordance
with GAAP after appropriate deduction for any minority interests in
Subsidiaries.
"Contingent Obligations" shall mean, as to any Person, without
duplication, any obligation of such Person guaranteeing or intended to guarantee
any Indebtedness, leases, dividends or other obligations ("primary obligations")
of any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor
(excluding any obligation or commitment of any Financial Services Subsidiary to
advance funds to any borrower pursuant to a lending contract entered into in the
ordinary course of business), (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary obligation
or (d) otherwise to assure or hold harmless the owner of
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such primary obligation against loss in respect thereof; provided, however, that
the term Contingent Obligation shall not include (x) endorsements of instruments
for deposit or collection in the ordinary course of business, (ii) indemnities
granted in the ordinary course of business and (iii) any insurance or
reinsurance obligation of any Regulated Insurance Company entered into in the
ordinary course of the insurance business of such Regulated Insurance Company.
The amount of any Contingent Obligation shall, subject to any contractual
limitation stated in such Contingent Obligation, be deemed to be an amount equal
to the stated or determinable amount of the primary obligation in respect of
which such Contingent Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform there- under) as determined by such Person in good
faith.
"Conversion Date" shall mean August 31, 1997.
"Credit Documents" shall mean this Agreement, the
Notes and the Pledge Agreement.
"Credit Rating" shall mean the Moody's Credit
Rating and the S&P Credit Rating.
"Default" shall mean any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Discontinued Subsidiary" shall mean any Subsidiary of the Borrower
all of whose operations constitute discontinued operations.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time. Section references to ERISA are to ERISA, as
in effect at the date of this Agreement and any subsequent provisions of ERISA,
amend- atory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which, from and after the Amendment Effective Date, together with the
Borrower, or any Subsidiary of the Borrower, would be deemed to be a member of
the same "controlled group" within the meaning of Section 414(b), (c), (m) and
(o) of the Code.
"Eurodollar Loans" shall mean each Loan bearing interest at the
rates provided in Section 1.09(b).
"Eurodollar Rate" shall mean with respect to each Interest Period,
(i) the arithmetic average (rounded to the nearest 1/100 of 1%) of the offered
quotations to first-class banks in the interbank Eurodollar market by each
Reference
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Bank for dollar deposits of amounts in same day funds comparable to the
outstanding principal amount of the Eurodollar Loan of such Reference Bank for
which an interest rate is then being determined (or in the case of a Competitive
Bid Loan that is a Spread Borrowing priced by reference to the Eurodollar Rate,
the arithmetic average (rounded to the nearest 1/100 of 1%) of the offered rates
for deposits in U.S. dollars for the applicable Interest Period (or the period
closest to such applicable Interest Period) which appear on the Telerate Page
3750, British Bankers Association Interest Settlement Rates (or if such Telerate
Page is unavailable, the comparable page on the Reuters Screen LIBO Page)) with
maturities comparable to the Interest Period, determined as of 10:00 A.M. (New
York time) on the date which is two Business Days prior to the commencement of
such Interest Period, divided (and rounded upward to the next whole multiple of
1/16 of 1%) by (ii) a percentage equal to 100% minus the then stated maximum
rate of all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves) applicable to any member
bank of the Federal Reserve System in respect of Eurocurrency liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D); provided that if one or more of the Reference Banks fails to
provide the Agent with its aforesaid rate, then the Eurodollar Rate shall be
determined based on the rate or rates provided to the Agent by the other
Reference Bank or Banks.
"Event of Default" shall have the meaning provided
in Section 8.
"Excluded Interest Expense" shall mean, for any period, the portion
of interest expense of the Borrower and its Subsidiaries for such period
representing (i) interest expense incurred during such period which, had such
expense been incurred during the Borrower's fiscal year ending December 31,
1994, would have been shown on the Borrower's GAAP financial statements for such
period as interest paid on "Total interest bearing liabilities," other than the
portion thereof representing interest on "Debt from affiliates" and (ii)
interest expense incurred during such period attributable to the Borrower's
Liquid Yield Option Notes.
"Existing Credit Agreement" shall have the meaning provided in the
first recital paragraph of this Agreement.
"Existing Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description (including, without
limitation, principal, interest and facility fees), and at any time existing,
owing to the agent, the collateral agent or any other bank pursuant to the terms
of the Existing Credit Agreement.
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"Facility Fee" shall have the meaning provided in
Section 2.01.
"Federal Funds Effective Rate" shall mean for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by the Agent.
"Fees" shall mean all amounts payable pursuant to,
or referred to in, Section 2.01.
"FCIC" shall mean Fremont Compensation Insurance
Co., a California corporation.
"FFC" shall mean Fremont Financial Corporation, a
California corporation.
"FGC" shall mean FGC Commercial Mortgage Finance,
a California corporation.
"FIC" shall mean Fremont Indemnity Company, a property and casualty
insurance company organized under the laws of California.
"FIC Consolidated Surplus" shall mean, at any time, the consolidated
Policyholder Surplus of FIC and its Subsidiaries at such time.
"FIG" shall mean Fremont Insurance Group, Inc., a
Delaware corporation.
"FIL" shall mean Fremont Investment and Loan, a
California corporation.
"Final Maturity Date" shall mean August 31, 2001.
"Financial Services Non-Thrift Subsidiaries" shall
mean all Financial Services Subsidiaries other than Thrift
Subsidiaries.
"Financial Services Subsidiaries" shall mean (i) the Securitization
Subsidiaries, (ii) the Thrift Subsidiaries and (iii) all other Subsidiaries of
the Borrower, whether in existence on the Amendment Effective Date or created or
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acquired thereafter; but in any event excluding the P&C
Insurance Subsidiaries.
"FRC" shall mean Fremont Reinsurance Co., a
California corporation.
"GAAP" shall mean generally accepted accounting principles in the
United States of America; it being understood and agreed that determinations in
accordance with GAAP for purposes of Section 7, including defined terms as used
therein, are subject (to the extent provided therein) to Section 11.07(a).
"Indebtedness" of any Person shall mean, without duplication, (i)
all indebtedness of such Person for borrowed money, (ii) the deferred purchase
price of assets or services which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person, (iii) the face amount of all
letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (iv) all Indebtedness of a second
Person secured by any Lien on any property owned by such first Person, whether
or not such Indebtedness has been assumed, provided that if such Indebtedness is
not assumed, the amount of such Indebtedness shall be deemed for purposes hereof
to be the lesser of the principal amount of such Indebtedness and the fair
market value of the property securing such Indebtedness, (v) all Capitalized
Lease Obligations of such Person, (vi) all obligations of such Person to pay a
specified purchase price for goods or services whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (vii) all obligations of
such Person under Interest Rate Protection Agreements or Other Hedging
Agreements, (viii) all Contingent Obligations of such Person and (ix) any
obligation of the type referred to in any of clauses (i)-(viii) above of any
general partnership of which such Person is the or a general partner (but
excluding any general partnership the general partners of which include the
Borrower or any of its Subsidiaries and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. and the business of
which shall be to hold and administer loans acquired in connection with loan
portfolio purchases; provided that Indebtedness shall not include trade payables
(including reinsurance payables), daylight overdrafts, open accounts, accrued
expenses, indemnities, and insurance and reinsurance obligations of Regulated
Insurance Companies, in each case arising in the ordinary course of business.
"Insurance Business" shall mean one or more aspects of the business
of selling, issuing or underwriting insurance or reinsurance.
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"Insured Depository Subsidiary" shall mean any
Subsidiary of the Borrower that is an "insured depository
institution" within the meaning of 12 U.S.C. ss. 1813(c)(2).
"Interest Period" shall mean (x) with respect to any Eurodollar
Loan, the interest period applicable thereto, as determined pursuant to Section
1.10 and (y) with respect to any Competitive Bid Loan, the period beginning on
the date of incurrence thereof and ending on the stated maturity thereof.
"Interest Rate Basis" shall mean the Eurodollar Rate and/or such
other basis for determining an interest rate as the Borrower and the Agent may
agree upon from time to time.
"Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, interest rate cap agreement, interest collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.
"Investment" shall mean, for any Person: (a) the acquisition
(whether for cash, property, services or securities or otherwise) of capital
stock, bonds, notes, debentures, partnership or other ownership interests or
other securities of any other Person or any agreement to make any such
acquisition (including, without limitation, any "short sale" or any sale of any
securities at a time when such securities are not owned by the Person entering
into such short sale); (b) the making of any deposit with, or advance, loan or
other extension of credit to, any other Person (including the purchase of
property from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such property to such Person) and (without
duplication) the entering into of any commitment to deposit funds with, advance
or lend funds to or otherwise extend credit to such Person; (c) the entering
into of any Contingent Obligation with respect to Indebtedness or other
liability of any other Person; or (d) the entering into by such Person of any
interest rate protection agreement.
"Investment Grade Securities" shall mean (i) any securities (as
defined in Section 8-102(1)(c) of the UCC as in effect in the State of New York
on the Amendment Effective Date) that are rated BBB- or higher by S&P, Baa3 or
higher by Moody's, Class (2) or higher by NAIC or the equivalent of such rating
by S&P, Moody's or NAIC, or if none of S&P, Moody's and NAIC shall then exist,
the equivalent of such rating by any other nationally recognized securities
rating agency and (ii) any fund investing exclusively in investments of the type
described in clause (i) which fund may also hold immaterial amounts of cash
pending investment and/or distribution.
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"Investors Bancor" shall mean Investors Bancor, a
California corporation.
"Legal Requirements" shall mean all applicable laws, rules, orders
and regulations made by any governmental body or regulatory authority
(including, without limitation, any Applicable Insurance Regulatory Authority)
having jurisdiction over the Borrower or a Subsidiary of the Borrower.
"Liabilities to Policyholder Surplus Ratio" shall mean, at any time,
the ratio of (a) consolidated liabilities (determined on a consolidated basis
without duplication in accordance with SAP) of FIC and its consolidated
Subsidiaries at such time to (b) the consolidated Policyholder Surplus of FIC
and its consolidated Subsidiaries at such time.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement or any
lease in the nature thereof).
"Liquid Yield Option Notes" shall mean the Borrower's $373,750,000
Aggregate Principal Amount at Maturity Liquid Yield Option(TM) Notes due 2013
(Zero Coupon Subordinated) Effective October 4, 1993.
"Loan" and "Loans" shall have the meaning provided
in Section 1.01(a).
"Margin Stock" shall have the meaning provided in
Regulation U.
"Material Discontinued Subsidiary" shall mean, at any time, (i) FRC,
(ii) ▇▇▇▇▇▇▇▇ and (iii) any other Discontinued Subsidiary to the extent that
such Discontinued Subsidiary had assets (valued at fair market value) of
$25,000,000 or more at the end of the then most recently ended fiscal year.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service,
Inc. and its successors.
"Moody's Credit Rating" shall mean the rating level (it being
understood that a rating level shall include numerical modifiers and (+) and (-)
modifiers) assigned by Moody's to the senior unsecured long-term debt of the
Borrower.
"NAIC" shall mean the National Association of Insurance
Commissioners or any successor organization thereto.
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"NAIC Tests" shall mean the ratios and other financial measurements
developed by the NAIC under its Insurance Regulatory Information System, as
initially in effect with respect to property and casualty insurance companies
and as thereafter modified, supplemented, replaced or eliminated from time to
time.
"Net Premiums Written" shall mean, for any period, determined in
accordance with SAP, the aggregate amount of premiums written by the Workers
Compensation Subsidiaries during such period.
"Net Worth" shall mean, as to any Person, the sum of its capital
stock, capital in excess of par or stated value of shares of its capital stock,
retained earnings and any other account which, in accordance with GAAP,
constitutes stockholders equity, but excluding (i) any treasury stock and (ii)
the effect, if any, of unrealized capital gains and losses.
"Non-Consensual Permitted Lien" shall mean Liens permitted by
Section 7.03(a) or (e), provided that such Liens have not specifically attached
to the Collateral by the filing of a notice of lien or otherwise.
"Non-Investment Grade Securities" shall mean any securities (as
defined in Section 8-102(1)(c) of the UCC as in effect in the State of New York
on the Amendment Effective Date) (i) that are not rated by any of S&P, Moody's
or the NAIC or (ii) that are not Investment Grade Securities.
"Note" and "Notes" shall have the meaning provided
in Section 1.06(a).
"Notice of Borrowing" shall have the meaning
provided in Section 1.03.
"Notice of Competitive Bid Borrowing" shall have the meaning
provided in Section 1.04.
"Notice of Conversion" shall have the meaning
provided in Section 1.07.
"Notice Office" shall mean the office of the Agent at Four Chase
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other office as the Agent
may designate to the Borrower and the Banks from time to time.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Agent, the Collateral Agent or any Bank pursuant to the terms of this
Agreement or any other Credit Document.
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"Other Hedging Agreement" shall mean any foreign exchange contracts,
currency swap agreements or other similar agreements or arrangements designed to
protect against the fluctuations in currency values.
"Payment Office" shall mean the office of the Agent at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other office as the Agent may
designate to the Borrower and the Banks from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"P&C Insurance Subsidiaries" shall mean (i) FIG, (ii) each of FIG's
Subsidiaries (whether in existence on the Amendment Effective Date or created or
acquired thereafter) and (iii) each other Subsidiary of the Borrower created or
acquired after the Amendment Effective Date that engages in property and
casualty insurance operations or the activities of which are limited to holding
the stock or other securities of another Subsidiary or Subsidiaries engaged in
property and casualty insurance operations.
"Percentage" shall mean for each Bank on each date of determination
a fraction the numerator of which is equal to the Commitment of such Bank on
such date and the denominator of which is equal to the Total Commitment on such
date, provided that if the Percentage of any Bank is to be determined after the
Total Commitment has been terminated, then the Percentage for each Bank shall be
a fraction the numerator of which is equal to the aggregate principal amount of
Loans of such Bank outstanding on such date and the denominator of which is
equal to the aggregate principal amount of all Loans outstanding on such date.
"Permitted Acquisition Debt" shall mean Indebtedness of any P&C
Insurance Subsidiary acquired by the Borrower after the Amendment Effective
Date, provided that (i) such Indebtedness was in existence prior to such
acquisition and was not created in connection with, or in contemplation of, such
acquisition and (ii) neither the Borrower nor any of its other Subsidiaries
guaranties or is otherwise obligated in any manner in respect of such
Indebtedness.
"Permitted Basket Amount" shall mean, as of any date of
determination, an amount equal to the sum of (i) $50,000,000 plus (ii) 50% of
any increase in the retained earnings of the Borrower (on a consolidated basis
determined in accordance with GAAP) from June 30, 1995 through the end of the
most recently ended fiscal quarter prior to such date of determination for which
financial statements have been
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delivered to the Banks plus (iii) the net cash proceeds of any issuance of
common equity securities of the Borrower after the Amendment Effective Date.
"Permitted Capital Management Agreement" shall mean the Memorandum
of Understanding between FIL and the Federal Deposit Insurance Corporation
executed on January 25, 1995. The Permitted Capital Management Agreement is not
a "capital management agreement" within the meaning of 12 U.S.C. ss.
1831o(b)(2)(C).
"Permitted CIC Acquisition Subordinated Note" shall mean the
$25,000,000 subordinated promissory note issued by the Borrower to The Buckeye
Union Insurance Company as partial consideration for the acquisition by Fremont
Compensation Insurance Company of all of the capital stock of the Casualty
Insurance Company.
"Permitted Subordinated Debt" shall mean Indebtedness of the
Borrower expressly subordinated to the Obligations, which (i) shall contain no
financial maintenance covenants or cross-default provisions (it being understood
and agreed that a cross-acceleration provision shall be permitted), (ii) shall
have no maturities, scheduled repayments or sinking fund requirements prior to
one year following the Final Maturity Date and (iii) shall contain terms and
conditions relating to the interest rate applicable thereto, covenants,
defaults, remedies and subordination provisions, and shall be issued pursuant to
documentation, which shall be in form and substance satisfactory to the Required
Banks.
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any multiemployer or single- employer plan as
defined in Section 4001 of ERISA, which is contributed to pursuant to collective
bargaining requirements or maintained by, or at any time during the five
calendar years preceding the date of this Agreement was contributed to pursuant
to collective bargaining requirements or maintained by, the Borrower, any
Subsidiary or an ERISA Affiliate.
"Pledge Agreement" shall have the meaning provided
in Section 4.01(i).
"Pledged Stock" shall mean all the Pledged Stock as
defined in the Pledge Agreement.
"Policyholder Surplus" of any Person shall mean, at
any time, the consolidated policyholders' surplus (determined
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on a consolidated basis without duplication in accordance with SAP) of such
Person and its consolidated Subsidiaries at such time (but excluding therefrom
the effect of any unrealized gains and losses from the marketable securities
portfolio of such Person and its consolidated Subsidiaries).
"Prescribed Forms" shall mean such duly executed form(s) or
statement(s), and in such number of copies, which may, from time to time, be
prescribed by law and which, pursuant to applicable provisions of (a) an income
tax treaty between the United States and the country of residence of the Bank
providing the form(s) or statement(s), (b) the Code, or (c) any applicable rule
or regulation under the Code, permit the Borrower to make payments hereunder for
the account of such Bank free of deduction or withholding of income or similar
taxes.
"Prime Lending Rate" shall mean the rate which the Agent announces
from time to time as its prime commercial lending rate, the Prime Lending Rate
to change when and as such prime commercial lending rate changes. The Prime
Lending Rate is a reference rate and does not necessarily represent the lowest
or best rate actually charged to any customer. The Agent may make commercial
loans or other loans at rates of interest at, above or below the Prime Lending
Rate.
"Proceeds Loan" shall have the meaning provided in
Section 5.05(d).
"Rating Agencies" shall mean each of Moody's and
S&P.
"Reference Banks" shall mean Chase, Sanwa Bank
California and Shawmut Bank Connecticut, N.A.
"Register" shall have the meaning provided in
Section 1.06(d).
"Regulated Insurance Company" shall mean any Subsidiary of the
Borrower, whether now owned or hereafter acquired, that is authorized or
admitted to carry on or transact Insurance Business in any jurisdiction and is
regulated by the insurance department or similar regulatory authority of such
jurisdiction.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board
of Governors of the Federal Reserve System as from time to
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time in effect and any successor to all or a portion thereof
establishing margin requirements.
"Reply Date" shall have the meaning provided in
Section 1.04(b).
"Reportable Event" shall mean an event described in Section 4043(b)
of ERISA with respect to a Plan as to which the 30-day notice requirement has
not been waived by the PBGC.
"Required Banks" shall mean Banks having Commitments which
constitute more than 50% of the Total Commitment, provided that at any time
after the Total Commitment has been terminated, the "Required Banks" shall mean
Banks whose Loans and Competitive Bid Loans constitute more than 50% of the
aggregate principal amount of Loans and Competitive Bid Loans outstanding at
such time.
"Reuters Screen" shall mean, when used in connection with any
designated page in determining the applicable Eurodollar Rate for an Interest
Period for a Competitive Bid Borrowing that is a Spread Borrowing priced by
reference to the Eurodollar Rate, the display page so designated on the Reuters
Monitor Money Rates Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates).
"S&P" shall mean Standard & Poor's Rating Group and
its successors.
"S&P Credit Rating" shall mean the rating level (it being understood
that a rating level shall include numerical modifiers and (+) and (-) modifiers)
assigned by S&P to the senior unsecured long-term debt of the Borrower.
"SAP" shall mean, with respect to any Regulated Insurance Company,
the accounting procedures and practices prescribed or permitted by the
Applicable Insurance Regulatory Authority of the state in which such Regulated
Insurance Company is domiciled; it being understood and agreed that
determinations in accordance with SAP for purposes of Section 7, including
defined terms as used therein, are subject (to the extent provided therein) to
Section 11.07(a).
"SEC" shall mean the Securities and Exchange
Commission or any successor thereto.
"SEC Regulation D" shall mean Regulation D as promulgated under the
Securities Act of 1933, as amended, as the same may be in effect from time to
time.
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"Securitization Subsidiaries" shall mean (i) FFC, (ii) each of FFC's
Subsidiaries (whether in existence on the Amendment Effective Date or created or
acquired thereafter), (iii) each other Subsidiary of the Borrower created or
acquired after the Amendment Effective Date that engages in asset securitization
operations or the activities of which are limited to holding the stock or
securities of another Subsidiary or Subsidiaries engaged in asset securitization
operations and (iv) any other Financial Services Subsidiaries which enters into
asset securitization transactions after the Amendment Effective Date.
"Spread" shall mean a percentage per annum in excess of, or less
than, an Interest Rate Basis.
"Spread Borrowing" shall mean a Competitive Bid Borrowing with
respect to which the Borrower has requested the Banks to make Competitive Bid
Loans at a Spread over or under a specified Interest Rate Basis.
"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person directly
or indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries has more than a 50% equity or voting interest at the time. Unless
otherwise expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Taxes" shall have the meaning provided in Section
3.04.
"Telerate Page" shall mean, when used in connection with any
designated page number, the display page so designated on the Dow ▇▇▇▇▇ Telerate
Service (or such other page as may replace that page on that service, or such
other service as may be nominated as the information vendor, for the purpose of
displaying rates or prices comparable to the Eurodollar Rate).
"Thrift Subsidiaries" shall mean (i) Investors Bancor, (ii) each of
Investors Bancor's Subsidiaries (whether in existence on the Amendment Effective
Date or created or acquired thereafter, and in any event including FIL and FGC)
and (iii) each other Subsidiary of the Borrower created or acquired after the
Amendment Effective Date that engages in thrift operations or the activities of
which are limited to
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holding the stock or securities of another Subsidiary or
Subsidiaries engaged in thrift operations.
"Total Capitalization" shall mean, at any time, the
sum of Total Funded Indebtedness plus Consolidated Net Worth
at such time.
"Total Funded Indebtedness" shall mean, at any time, Total
Indebtedness at such time less any portion of such Total Indebtedness
constituting Contingent Obligations.
"Total Indebtedness" shall mean, at any time, all
Indebtedness of the Borrower at such time.
"Total Commitment" shall mean the sum of the Commit-
ments of each Bank.
"Total Unutilized Commitment" shall mean at any time for the
determination thereof, the Total Commitment less the aggregate outstanding
principal amount of all Loans at such time.
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the present value of the accrued benefits under such Plan as of
the close of its most recent plan year exceeds the fair market value of the
assets allocable thereto, determined in accordance with Section 412 of the Code.
"Wholly-Owned Subsidiary" of any Person shall mean any Subsidiary of
such Person to the extent all of the capital stock or other ownership interests
in such Subsidiary, other than directors' or nominees' qualifying shares, is
owned directly or indirectly by such Person.
"Workers Compensation Subsidiaries" shall mean FCIC, Pacific
Compensation Insurance Co., Beaver Insurance Company, Casualty Insurance
Company, Workers' Compensation and Indemnity Corporation and each of their
respective Subsidiaries.
"Written" or "in writing" shall mean any form of written
communication or a communication by means of telex, facsimile device, telegraph
or cable.
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SECTION 10. The Agent.
10.01 Appointment. Each Bank hereby irrevocably designates and
appoints Chase as Agent of such Bank (such term to include, for purposes of this
Section 10, Chase acting as Collateral Agent) to act as specified herein and in
the other Credit Documents, and each such Bank hereby irrevocably authorizes
Chase as the Agent for such Bank to take such action on its behalf under the
provisions of this Agreement and the other Credit Documents and to exercise such
powers and perform such duties as are expressly delegated to the Agent by the
terms of this Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto. The Agent agrees to act as such
upon the express conditions contained in this Section 10. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Agent shall not have
any duties or responsibilities, except those expressly set forth herein or in
the other Credit Documents, or any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against the
Agent. The provisions of this Section 10 are solely for the benefit of the Agent
and the Banks, and the Borrower shall have no 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 the Agent shall not assume, nor shall it be deemed to have assumed, any
obligation or relationship of agency or trust with or for the Borrower or any of
its Subsidiaries.
10.02 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Credit Document by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care except to the extent otherwise required by Section 10.03.
10.03 Exculpatory Provisions. Neither the Agent, nor any of its
respective officers, directors, employees, representatives, agents,
attorneys-in-fact or affiliates shall be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
this Agreement (except for its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties made by the Borrower, any
Subsidiary or any of their respective officers contained in this Agreement, any
other Credit Document or in any certificate, report, statement or other document
referred to
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or provided for in, or received by the Agent under or in connection with, this
Agreement or any other Credit Document or for any failure of the Borrower or any
Subsidiary or any of their respective officers to perform its obligations
hereunder or thereunder. The Agent shall not be under any obligation to any Bank
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrower or any Subsidiary. The Agent shall
not be responsible to any Bank for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any Credit
Document or for any representations, warranties, recitals or statements made
herein or therein or made in any written or oral statement or in any financial
or other statements, instruments, reports, certificates or any other documents
in connection herewith or therewith furnished or made by the Agent to the Banks
or by or on behalf of the Borrower to the Agent or any Bank or be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or Competitive Bid Loans or of the
existence or possible existence of any Default or Event of Default.
10.04 Reliance by Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, facsimile, telex
or teletype message, statement, order or other document or conversation believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take or continue to take any action under
this Agreement or any other Credit Document unless it shall first receive such
advice or concurrence of the Required Banks as it deems appropriate or it shall
first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Credit Documents in accordance with a request of the Required Banks, (or
to the extent specifically provided in Section 11.11, all the Banks), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Banks.
10.05 Notice of Default. The Agent shall not be
deemed to have knowledge or notice of the occurrence of any
Default or Event of Default hereunder unless the Agent has
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received notice from a Bank or the Borrower referring to this Agreement,
describing 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 prompt notice thereof to the Banks. The Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Banks, provided that, unless and until the Agent shall
have received such directions, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Banks.
10.06 Non-Reliance on Agent and Other Banks. Each Bank expressly
acknowledges that neither the Agent nor any of its respective officers,
directors, employees, agents, representatives, attorneys-in-fact or affiliates
has made any representations or warranties to it and that no act by the Agent
hereinafter taken, including any review of the affairs of the Borrower or any
Subsidiary, shall be deemed to constitute any representation or warranty by the
Agent to any Bank. Each Bank represents to the Agent that it has, independently
and without reliance upon the Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the businesses, assets, operations, property,
financial and other conditions, prospects and credit-worthiness of the Borrower
and its Subsidiaries and made its own decision to make its Loans and its
Competitive Bid Loans hereunder and enter into this Agreement. Each Bank also
represents 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 credit analysis, appraisals
and decisions in taking or not taking action under this Agreement, and to make
such investigation as it deems necessary to inform itself as to the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Borrower and its Subsidiaries. Except for notices,
reports and other documents 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 credit or other information concerning the businesses,
operations, assets, property, financial and other conditions, prospects or
creditworthiness of the Borrower or any Subsidiary which may come into the
possession of the Agent or any of its officers, directors, employees, agents,
representatives, attorneys-in-fact or affiliates.
10.07 Indemnification. The Banks agree to indem-
nify the Agent in its capacity as such ratably according to
their respective "percentages" as used in determining the
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Required Banks at such time from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
reasonable expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Obligations) be imposed on, incurred by or asserted against the Agent in its
capacity as such in any way relating to or arising out of this Agreement or any
other Credit Document, or any documents contemplated by or referred to herein or
the transactions contemplated hereby or any action taken or omitted to be taken
by the Agent under or in connection with any of the foregoing, but only to the
extent that any of the foregoing is not paid by the Borrower or any of its
Subsidiaries, provided that no Bank shall be liable to the Agent for the payment
of any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
gross negligence or willful misconduct of the Agent. If any indemnity furnished
to the Agent for any purpose shall, in the opinion of the Agent be insufficient
or become impaired, the Agent may call for additional indemnity and cease, or
not commence, to do the acts indemnified against until such additional indemnity
is furnished. The agreements in this Section 10.07 shall survive the payment of
all Obligations.
10.08 Agent in Its Individual Capacity. The Agent and its affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower and its Affiliates as though the Agent were not the
Agent hereunder. With respect to the Loans and Competitive Bid Loans made by it
and all Obligations owing to it, the Agent shall have the same rights and powers
under this Agreement as any Bank and may exercise the same as though it were not
the Agent and the terms "Bank" and "Banks" shall include the Agent in its
individual capacity.
10.09 Resignation of the Agent; Successor Agent. The Agent may
resign as the Agent upon 20 days' notice to the Banks. Upon the resignation of
the Agent, the Required Banks shall appoint from among the Banks a successor
Agent for the Banks subject to prior approval by the Borrower, whereupon such
successor agent shall succeed to the rights, powers and duties of the Agent, and
the term "Agent" shall include such successor agent effective upon its
appointment, and the re- signing Agent's rights, powers and duties as the Agent
shall be terminated, without any other or further act or deed on the part of
such former Agent or any of the parties to this Agreement. After the resignation
of the Agent hereunder, the provisions of this Section 10 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Agent under this Agreement.
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SECTION 11. Miscellaneous.
11.01 Payment of Expenses, etc. The Borrower agrees to: (i) whether
or not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Agent in connection with the
negotiation, preparation, execution and delivery of the Credit Documents and the
documents and instruments referred to therein and any amendment, waiver or
consent relating thereto (including, without limitation, the reasonable fees and
disbursements of White & Case) and of the Agent and each of the Banks in
connection with the enforcement of the Credit Documents and the documents and
instruments referred to therein (including, without limitation, the reasonable
fees and disbursements of counsel for the Agent and for each of the Banks); (ii)
pay and hold each of the Banks harmless from and against any and all present and
future stamp and other similar taxes with respect to the foregoing matters and
save each of the Banks harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the extent
attributable to such Bank) to pay such taxes; and (iii) indemnify the Agent and
each Bank, and their respective officers, directors, employees, representatives
and agents from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a result of,
or arising out of, or in any way related to, or by reason of, any investigation,
litigation or other proceeding (whether or not the Agent or any Bank is a party
thereto) related to the entering into and/or performance of any Credit Document
or the use of the proceeds of any Loans or Competitive Bid Loans hereunder or
the consummation of any other transactions contemplated in any Credit Document,
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding (but excluding any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified).
11.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Bank is hereby
authorized at any time or from time to time, without present- ment, demand,
protest or other notice of any kind to the Borrower or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Bank (including, without limitation, by branches
and agencies of such Bank wherever located) to or for the credit or the account
of the Borrower against and on account of the Obligations and liabil-
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ities of the Borrower to such Bank under this Agreement or under any of the
other Credit Documents, including, without limitation, all interests in
Obligations of the Borrower purchased by such Bank pursuant to Section 11.06(b),
and all other claims of any nature or description arising out of or connected
with this Agreement or any other Credit Document, which are then due and payable
irrespective of whether or not such Bank shall have made any demand hereunder.
11.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to the Borrower, at
the address specified opposite its signature below; if to any Bank, at its
address specified for such Bank on Annex II hereto; or, at such other address as
shall be designated by any party in a written notice to the other parties
hereto. All such notices and communications shall be mailed, telegraphed,
telexed, telecopied, cabled or sent by overnight courier and shall be effective
when received.
11.04 Benefit of Agreement. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided that the Borrower may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of the Banks. Each Bank may at any time grant participations in any of
its rights hereunder or under any of its Notes to another financial institution;
provided that in the case of any such participation, the participant shall not
have any rights under this Agreement or any of the other Credit Documents (the
participant's rights against such Bank in respect of such participation to be
those set forth in the agreement executed by such Bank in favor of the
participant relating thereto) and all amounts payable by the Borrower hereunder
shall be determined as if such Bank had not sold such participation, except that
the participant shall be entitled to receive the additional amounts under
Sections 1.11, 1.12 and 3.04 to, and only to, the extent that such Bank would be
entitled to such benefits if the participation had not been entered into or
sold; and provided further that no Bank shall transfer, grant or assign any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan or Competitive Bid Loan or Note in which such participant
is participating or reduce the rate or extend the time of payment of interest
thereon (except in connection with a waiver of the applicability of any post-
default increase in interest rates) or Fees, or reduce the principal amount
thereof, or increase the Commitment in which
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such participant is participating over the amount thereof then in effect (it
being understood that a waiver of any Default or Event of Default or of a
mandatory reduction in the Total Commitment or of a mandatory prepayment shall
not constitute a change in the terms of any Commitment and that an increase in
any Commitment shall be permitted without the consent of any participant therein
if such participant's participation is not increased as a result thereof), (ii)
release all or substantially all of the Collateral (except as expressly provided
in the Credit Documents) or (iii) consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement or any other
Credit Document except in accordance with the terms hereof and thereof.
(b) Notwithstanding the foregoing, any Bank may assign all or a
portion of its Commitment, and its rights and obligations hereunder, to one or
more commercial banks or other financial institutions (including one or more
Banks); provided, however, that no Bank may effect such an assignment without
the prior written consent of the Borrower and the Agent, neither of which
consents will be unreasonably withheld. No assignment of less than all of a
Bank's Commitment and its rights and obligations hereunder pursuant to the
immediately preceding sentence shall, to the extent such transaction represents
an assignment to an institution other than one or more Banks hereunder, be in an
aggregate amount less than the minimum of $10,000,000. Each assignment shall be
of a constant, and not a varying percentage, of all of the assigning Bank's
rights and obligations under this Agreement. If any Bank so sells or assigns all
or a part of its Commitment and its rights hereunder or under the Notes, any
reference in this Agreement or the Notes to such assigning Bank shall thereafter
refer to such Bank and to the respective assignee to the extent of their
respective interests and the respective assignee shall have, to the extent of
such assignment (unless otherwise provided therein), the same rights and
benefits as it would if it were such assigning Bank. Each assignment pursuant to
this Section 11.04(b) shall be effected by the assigning Bank and the assignee
Bank executing an Assignment and Assumption Agreement substantially in the form
of Exhibit F (appropriately completed). At the time of any such assignment, (i)
Annex I shall be deemed to be amended to reflect the Commitment of the
respective assignee (which shall result in a direct reduction to the Commitment
of the assigning Bank) and of the other Banks, (ii) if any such assignment
occurs after the Amendment Effective Date, at the request of the assignor or the
assignee the Borrower will issue new Notes to the respective assignee and to the
assigning Bank in conformity with the requirements of Section 1.06 and (iii) the
Agent shall receive from the assigning Bank and/or the assignee Bank or
financial institution at the time of each assignment the
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payment of a nonrefundable assignment fee of $3,000. Each Bank and the Borrower
agrees to execute such documents (including, without limitation, amendments to
this Agreement and the other Credit Documents) as shall be necessary to effect
the foregoing at the expense of the assignee Bank. Promptly following any
assignment pursuant to this Section 11.04(b), the assigning Bank shall promptly
notify the Borrower and the Agent thereof. Nothing in this Section 11.04 shall
prevent or prohibit any Bank from pledging its Loans or Competitive Bid Loans or
Notes hereunder to a Federal Reserve Bank in support of borrowings made by such
Bank from such Federal Reserve Bank.
11.05 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Agent or any Bank in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
the Borrower and the Agent or any Bank shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under any other Credit Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or
thereunder. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights or remedies which the Agent or any Bank would
otherwise have. No notice to or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Agent or the Banks to
any other or further action in any circumstances without notice or demand.
11.06 Payments Pro Rata. (a) The Agent agrees that promptly after
its receipt of each payment from or on behalf of the Borrower in respect of any
Obligations of the Borrower, it shall distribute such payment to the Banks
(other than any Bank that has consented in writing to waive its pro rata share
of such payment) pro rata based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or Competitive Bid Loans or Fees, of a sum which with respect to
the related sum or sums received by other Banks is in a greater proportion than
the total of such Obligation then owed and due to such Bank bears to the total
of such Obligation then owed and due to all of the Banks immediately prior to
such receipt, then such Bank receiving such excess payment shall purchase for
cash without
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recourse or warranty from the other Banks an interest in the Obligations of the
Borrower to such Banks in such amount as shall result in a proportional
participation by all of the Banks in such amount, provided that if all or any
portion of such excess amount is thereafter recovered from such Bank, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
11.07 Calculations; Computations. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with GAAP or SAP, as the case may be, consistently applied throughout the
periods involved (except as set forth in the notes thereto or as otherwise
disclosed in writing by the Borrower to the Banks). In addition, except as
otherwise specifically provided herein, all computations determining compliance
with Section 7, including definitions used therein, shall utilize accounting
principles and policies in effect from time to time; provided that if any such
accounting principle or policy (whether GAAP or SAP or both) shall change after
the Amendment Effective Date, the Borrower shall give prompt notice thereof to
the Agent and each of the Banks and if within 30 days following such notice the
Borrower, the Agent or the Required Banks shall elect by giving written notice
of such election to the other parties hereto, such computations shall not give
effect to such change unless and until this Agreement shall be amended pursuant
to Section 11.11 to give effect to such change.
(b) All computations of interest and Facility Fees hereunder shall
be made on the actual number of days elapsed over a year of 360 days.
11.08 Governing Law; Submission to Jurisdiction; Venue. (a) THIS
AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Agreement or any other Credit Document may be brought in
the courts of the State of New York or of the United States for the Southern
District of New York, and, by execution and delivery of this Agreement, the
Borrower hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. The
Borrower hereby irrevocably designates, appoints and empowers CT Corporation
System, with offices on the date hereof at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ as its designee, appointee and agent to receive, accept and acknowledge
for and on its behalf, and in respect of its property, service of any and all
legal process, summons, notices and documents which may be served in any such
action or proceeding. The Agent agrees
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to use reasonable good faith efforts to mail, by registered or certified mail,
to the Borrower, at its address set forth opposite its signature below, copies
of any correspondence mailed or delivered to CT Corporation System in connection
with the immediately preceding sentence; provided that no failure of the
Borrower to receive, for any reason, copies of such correspondence shall in any
way affect the effectiveness of the delivery of any legal process, summons,
notice or documents delivered to CT Corporation System. If for any reason such
designee, appointee and agent shall cease to be available to act as such, the
Borrower agrees to designate a new designee, appointee and agent in New York
City on the terms and for the purposes of this provision satisfactory to the
Agent. The Borrower further irrevocably consents to the service of process out
of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
the Borrower at its address for notices pursuant to Section 11.03, such service
to become effective 30 days after such mailing. Nothing herein shall affect the
right of the Agent or any Bank to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed against the Borrower
in any other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.
11.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Agent.
11.10 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
11.11 Amendment or Waiver. Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the Borrower and the Required Banks, provided that no such
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change, waiver, discharge or termination shall, without the consent of each Bank
affected thereby, (i) extend any date fixed for any payment of principal of any
Loan or Competitive Bid Loan or Note or reduce the rate or extend the time of
payment of interest thereon or Fees or reduce the principal amount thereof, or
increase the Commitment of any Bank over the amount thereof then in effect (it
being understood that a waiver of any Default or Event of Default shall not
constitute a change in the terms of any Commitment of any Bank), (ii) release
any of the Collateral (except as expressly provided in the Credit Documents),
(iii) amend, modify or waive any provision of this Section, (iv) reduce any
percentage specified in, or otherwise modify, the definition of Required Banks
or any provision of this Agreement specifying the number or percentage of Banks
required to take any action hereunder or (v) consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement or any other Credit Document. No provision of Section 10 or any other
term or provision relating to the rights or obligations of the Agent may be
amended without the consent of the Agent.
11.12 Survival. All indemnities set forth herein including, without
limitation, in Section 1.11, 1.12, 3.04, 10.07 or 11.01 shall survive the
execution and delivery of this Agreement and the making of the Loans and
Competitive Bid Loans, the repayment of the Obligations and the termination of
the Total Commitment.
11.13 Domicile of Loans. Subject to Section 11.04, each Bank may
transfer and carry its Loans and Competitive Bid Loans at, to or for the account
of any branch office, subsidiary or affiliate of such Bank, provided that the
Borrower shall not be responsible for costs arising under Section 1.11 or 3.04
resulting from any such transfer to the extent not otherwise applicable to such
Bank prior to such transfer.
11.14 Confidentiality. Each Bank shall hold all non-public
information furnished by or on behalf of the Borrower in connection with such
Bank's evaluation of whether to become a Bank hereunder or obtained by such Bank
pursuant to the requirements of this Agreement, which has been identified as
such by the Borrower, in accordance with its customary procedure for handling
confidential information of this nature and in accordance with safe and sound
banking or lending practices and in any event may make disclosure reasonably
required by any bona fide actual or contemplated transferee or participant in
connection with an actual or contemplated transfer of any Loans or Competitive
Bid Loans or participation therein or as required or requested by any
governmental agency or representative thereof or pursuant to legal process or to
such Bank's attorneys or independent
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auditors or affiliates; provided that unless specifically prohibited by
applicable law or court order, each Bank shall notify the Borrower of any
request or requirement by any governmental agency or representative thereof
(other than any such request or requirement in connection with an examination of
the financial condition of such Bank by such governmental agency) or pursuant to
legal process for disclosure of any such non-public information prior to
disclosure of such information; and provided further, that in no event shall any
Bank be obligated or required to return any materials furnished by the Borrower
or any Subsidiary of the Borrower.
11.15 WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
11.16 Existing Notes. Each Bank that is a party to the Existing
Credit Agreement shall, on the Amendment Effective Date or within 30 days
thereafter, deliver to the Borrower for cancellation any Note (as such term is
defined in the Existing Credit Agreement) made by the Borrower in favor of such
Bank pursuant to the Existing Credit Agreement. If any such Bank has failed to
deliver to the Borrower any such Note by the close of business of the Borrower
on such thirtieth day, such Bank shall execute and deliver to the Borrower a
letter in form and substance reasonably satisfactory to the Borrower pursuant to
which such Bank will agree to indemnify the Borrower against losses that may
arise from the failure of such Bank to deliver any such Note to the Borrower.
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
Address:
2020 Santa ▇▇▇▇▇▇ Boulevard FREMONT GENERAL CORPORATION
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ By ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Title: Vice President,
Vice President, Treasurer and Chief Financial
Treasurer and Officer
Chief Financial
Officer
THE CHASE MANHATTAN BANK,
N.A., Individually and as
Agent
By ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Title: Managing Director
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▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇,
▇▇▇ ▇▇▇▇ AND/OR
CAYMAN ISLANDS BRANCHES
By ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title:Assistant Vice
President
By ▇▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
Title: President
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FIRST BANK NATIONAL ASSOCIATION
By ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
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▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
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THE INDUSTRIAL BANK OF JAPAN,
LIMITED, LOS ANGELES AGENCY
By Masatake Yashiro
---------------------------
Name: Masatake Yashiro
Title: General Manager
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THE SAKURA BANK, LIMITED,
LOS ANGELES AGENCY
By ▇▇▇▇▇ ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Senior Vice President
and Assistant General
Manager
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SANWA BANK CALIFORNIA
By ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
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SHAWMUT BANK CONNECTICUT, N.A.
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
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▇▇▇▇▇ ▇▇▇▇
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
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▇▇▇▇▇ FARGO BANK, N.A.
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
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THE YASUDA TRUST AND BANKING
CO., LTD., LOS ANGELES AGENCY
By ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Joint General Manager
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ANNEX I
LIST OF BANKS AND COMMITMENTS
Name of Bank Commitment
The Chase Manhattan Bank, N.A ........................... $ 25,000,000.00
Deutsche Bank AG, New York Branch ....................... 15,000,000.00
First Bank National Association ......................... 10,000,000.00
First Union National Bank of North
Carolina .............................................. 25,000,000.00
The Industrial Bank of Japan, Limited,
Los Angeles Agency .................................... 15,000,000.00
The Sakura Bank, Limited ................................ 12,500,000.00
Sanwa Bank California ................................... 25,000,000.00
Shawmut Bank Connecticut, N.A ........................... 25,000,000.00
Union Bank .............................................. 25,000,000.00
The Yasuda Trust and Banking Co., Ltd.,
Los Angeles Agency .................................... 10,000,000.00
▇▇▇▇▇ Fargo Bank, N.A ................................... 12,500,000.00
-----------------
Total: .................................................. $ 200,000,000.00
=================
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