EXHIBIT 10.1
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EXECUTION COPY
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$50,000,000
CREDIT AGREEMENT
AMONG
URC HOLDINGS CORP.,
as Borrower,
THE LENDERS NAMED HEREIN
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
DATED AS OF
October 23, 1996
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS .............................................. 1
ARTICLE II
THE FACILITY.............................................. 22
2.1. The Facility....................................... 22
2.1.1. Description of Facility.................... 22
2.1.2. Facility Amount............................ 22
2.1.3. Availability of Facility................... 22
2.2. Ratable Advances................................... 23
2.2.1. Ratable Advances........................... 23
2.2.2. Ratable Advance Rate Options............... 23
2.2.3. Method of Selecting Types and
Interest Periods for Ratable Advances...... 23
2.2.4. Conversion and Continuation of
Outstanding Ratable Advances............... 24
2.3. Competitive Bid Advances........................... 25
2.3.1. Competitive Bid Option..................... 25
2.3.2. Competitive Bid Quote Request.............. 26
2.3.3. Invitation for Competitive Bid Quotes...... 26
2.3.4. Submission and Contents of
Competitive Bid Quotes..................... 27
2.3.5. Notice to Borrower......................... 29
2.3.6. Acceptance and Notice by Borrower.......... 29
2.3.7. Allocation by Agent........................ 30
2.4. Availability of Funds.............................. 30
2.5. Facility Fee; Reductions in Aggregate Commitment... 31
2.6. Minimum Amount of Each Advance..................... 31
2.7. Optional Principal Payments........................ 31
2.8. Changes in Interest Rate, etc...................... 32
2.9. Rates Applicable After Default..................... 32
2.10. Method of Payment.................................. 33
2.11. Notes; Telephonic Notices.......................... 33
2.12. Interest Payment Dates; Interest and Fee Basis..... 34
2.13. Notification of Advances, Interest Rates,
Prepayments and Commitment Reductions.............. 34
2.14. Lending Installations.............................. 34
2.15. Non-Receipt of Funds by the Agent.................. 35
2.16. Taxes.............................................. 35
2.17. Agent's Fees....................................... 37
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ARTICLE III
CHANGE IN CIRCUMSTANCES................................... 37
3.1. Yield Protection................................... 37
3.2. Changes in Capital Adequacy Regulations............ 38
3.3. Availability of Types of Advances.................. 39
3.4. Funding Indemnification............................ 39
3.5. Lender Statements; Survival of Indemnity........... 39
3.6. Substitution of Lenders............................ 40
3.7. Survival........................................... 40
ARTICLE IV
CONDITIONS PRECEDENT...................................... 41
4.1. Initial Loans...................................... 41
4.2. Each Future Advance................................ 43
ARTICLE V
REPRESENTATIONS AND WARRANTIES............................ 44
5.1. Corporate Existence and Standing................... 44
5.2. Authorization and Validity......................... 44
5.3. Compliance with Laws and Contracts................. 45
5.4. Governmental Consents.............................. 45
5.5. Financial Statements............................... 46
5.6. Material Adverse Change............................ 46
5.7. Taxes.............................................. 46
5.8. Litigation......................................... 47
5.9. Capitalization..................................... 47
5.10. ERISA.............................................. 48
5.11. Defaults........................................... 48
5.12. Federal Reserve Regulations........................ 49
5.13. Investment Company; Public Utility
Holding Company Act................................ 49
5.14. Certain Fees....................................... 49
5.15. Solvency........................................... 50
5.16. Ownership of Properties............................ 50
5.17. Indebtedness....................................... 50
5.18. Material Agreements................................ 51
5.19. Environmental Laws................................. 51
5.20. Insurance.......................................... 52
5.21. Insurance Licenses................................. 52
5.22. Reserves........................................... 52
5.23. Disclosure......................................... 53
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ARTICLE VI
COVENANTS................................................. 53
6.1. Financial Reporting................................ 53
6.2. Use of Proceeds.................................... 57
6.3. Notice of Default.................................. 57
6.4. Conduct of Business................................ 57
6.5. Taxes.............................................. 58
6.6. Insurance.......................................... 59
6.7. Compliance with Laws............................... 59
6.8. Maintenance of Properties.......................... 59
6.9. Inspection......................................... 59
6.10. Capital Stock and Dividends........................ 60
6.11. Indebtedness ...................................... 60
6.12. Merger............................................. 61
6.13. Sale of Assets..................................... 61
6.14. Investments and Purchases.......................... 62
6.15. Contingent Obligations............................. 64
6.16. Liens.............................................. 65
6.17. Affiliates......................................... 66
6.18. Other Indebtedness................................. 66
6.19. Environmental Matters.............................. 66
6.20. Change in Corporate Structure; Fiscal Year......... 67
6.21. Inconsistent Agreements............................ 67
6.22. Financial Covenants................................ 67
6.22.1. Minimum Statutory Surplus................. 67
6.22.2. Leverage Ratio............................ 67
6.23. Tax Consolidation.................................. 68
6.24. ERISA Compliance................................... 68
ARTICLE VII
DEFAULTS.................................................. 69
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES............ 72
8.1. Acceleration....................................... 72
8.2. Amendments......................................... 73
8.3. Preservation of Rights............................. 74
ARTICLE IX
GENERAL PROVISIONS........................................ 74
9.1. Survival of Representations........................ 74
9.2. Governmental Regulation............................ 74
9.3. Taxes.............................................. 75
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9.4. Headings........................................... 75
9.5. Entire Agreement................................... 75
9.6. Several Obligations; Benefits of
this Agreement..................................... 75
9.7. Expenses; Indemnification.......................... 75
9.8. Numbers of Documents............................... 76
9.9. Accounting ........................................ 76
9.10. Severability of Provisions......................... 76
9.11. Nonliability of Lenders............................ 76
9.12. Choice of Law...................................... 77
9.13. Consent to Jurisdiction............................ 77
9.14. Waiver of Jury Trial............................... 78
9.15. Disclosure......................................... 78
9.16. Counterparts....................................... 78
9.17. Confidentiality.................................... 78
ARTICLE X
THE AGENT................................................. 79
10.1. Appointment........................................ 79
10.2. Powers............................................. 80
10.3. General Immunity................................... 80
10.4. No Responsibility for Loans, Recitals, etc......... 80
10.5. Action on Instructions of Lenders.................. 80
10.6. Employment of Agents and Counsel................... 81
10.7. Reliance on Documents; Counsel..................... 81
10.8. Agent's Reimbursement and Indemnification.......... 81
10.9. Notice of Default ................................. 82
10.10. Rights as a Lender................................. 82
10.11. Lender Credit Decision............................. 82
10.12. Successor Agent.................................... 83
ARTICLE XI
SETOFF; RATABLE PAYMENTS.................................. 83
11.1. Setoff............................................. 83
11.2. Ratable Payments................................... 84
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS......... 84
12.1. Successors and Assigns............................. 84
12.2. Participations..................................... 85
12.2.1. Permitted Participants; Effect............ 85
12.2.2. Voting Rights............................. 85
12.2.3. Benefit of Setoff......................... 86
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12.3. Assignments........................................ 86
12.3.1. Permitted Assignments..................... 86
12.3.2. Effect; Effective Date.................... 87
12.4. Dissemination of Information....................... 87
12.5. Tax Treatment...................................... 87
ARTICLE XIII
NOTICES................................................... 88
13.1. Giving Notice...................................... 88
13.2. Change of Address.................................. 88
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EXHIBITS
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Exhibit A - Ratable Note
Exhibit B - Competitive Bid Note
Exhibit C - Competitive Bid Quote Request
Exhibit D - Invitation for Competitive Bid Quotes
Exhibit E - Competitive Bid Quote
Exhibit F - Compliance Certificate
Exhibit G - Assignment Agreement
SCHEDULES
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Schedule 5.3 - Approvals and Consents
Schedule 5.4 - Governmental Consents
Schedule 5.7 - Taxes
Schedule 5.9 - Capitalization
Schedule 5.10 - ERISA
Schedule 5.16 - Owned Properties
Schedule 5.17 - Indebtedness
Schedule 5.19 - Environmental
Schedule 5.21 - Insurance Licenses
Schedule 6.14 - Investments
Schedule 6.16 - Liens
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CREDIT AGREEMENT
This Credit Agreement, dated as of October 23, 1996, is among
URC HOLDINGS CORP., a Delaware corporation, the Lenders and THE
FIRST NATIONAL BANK OF CHICAGO, as Agent and in its individual
capacity as a Lender.
R E C I T A L S:
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A. The Borrower has requested the Lenders to make financial
accommodations to it in the aggregate principal amount of
$50,000,000, the proceeds of which the Borrower will use for the
general corporate needs of the Borrower and its Subsidiaries.
B. The Lenders are willing to extend such financial
accommodations on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower, the Lenders and the Agent hereby agree
as follows:
ARTICLE I
DEFINITIONS
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As used in this Agreement:
"Absolute Rate" means, with respect to an Absolute Rate Loan
made by a given Lender for the relevant Absolute Rate Interest
Period, the rate of interest per annum (rounded to the nearest
1/100 of 1%) offered by such Lender and accepted by the Borrower.
"Absolute Rate Advance" means a borrowing hereunder
consisting of the aggregate amount of the several Absolute Rate
Loans made by some or all of the Lenders to the Borrower at the
same time and for the same Interest Period.
"Absolute Rate Auction" means a solicitation of Competitive
Bid Quotes setting forth Absolute Rates pursuant to Section 2.3.
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"Absolute Rate Interest Period" means, with respect to an
Absolute Rate Advance, a period of not less than 7 and not more
than 180 days commencing on a Business Day selected by the
Borrower pursuant to this Agreement. If such Absolute Rate
Interest Period would end on a day which is not a Business Day,
such Absolute Rate Interest Period shall end on the next
succeeding Business Day.
"Absolute Rate Loan" means a Loan which bears interest at the
Absolute Rate.
"Advance" means a borrowing hereunder consisting of the
aggregate amount of the several Loans made by some or all of the
Lenders to the Borrower on the same Borrowing Date, of the same
Type (or on the same interest basis in the case of Competitive Bid
Advances) and, when applicable, for the same Interest Period and
includes a Competitive Bid Advance.
"Affected Lender" is defined in Section 3.6.
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"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with
such Person. For the purposes of this Agreement, a Person shall
be deemed to control another Person if the controlling Person owns
10% or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or
indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through
ownership of stock, by contract or otherwise.
"Agent" means First Chicago in its capacity as agent for the
Lenders pursuant to Article X, and not in its individual capacity
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as a Lender, and any successor Agent appointed pursuant to
Article X.
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"Aggregate Commitment" means the aggregate of the Commitments
of all the Lenders hereunder. The initial Aggregate Commitment is
$50,000,000.
"Agreement" means this Credit Agreement, as it may be
amended, modified or restated and in effect from time to time.
"Agreement Accounting Principles" means generally accepted
accounting principles as in effect from time to time, applied in a
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manner consistent with those used in preparing the financial
statements referred to in Section 5.5(a) and (b), as modified by
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interpretations of the FASB Emerging Issues Task Force regarding
multi-year funded reinsurance contracts; provided, that with
respect to the financial covenants contained in Section 6.22
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hereof, the related definitions, and the computations required
thereby, such term means generally accepted accounting principles
(except where SAP is applicable) in effect on the date hereof,
applied in a manner consistent with those used in preparing the
financial statements referred to in Section 5.5(a) and (b).
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"Alleghany" means Alleghany Corporation, a Delaware
corporation.
"Annual Statement" means the annual statutory financial
statement of any Insurance Subsidiary required to be filed with
the insurance commissioner (or similar authority) of its
jurisdiction of incorporation, which statement shall be in the
form required by such Insurance Subsidiary's jurisdiction of
incorporation or, if no specific form is so required, in the form
of financial statements permitted by such insurance commissioner
(or such similar authority) to be used for filing annual statutory
financial statements and shall contain the type of information
permitted by such insurance commissioner (or such similar
authority) to be disclosed therein, together with all exhibits or
schedules filed therewith.
"Applicable Eurodollar Margin" means, on any date, subject to
the following sentence of this definition, the applicable of the
following percentages:
Applicable
Debt Rating on Such Date Eurodollar Margin
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Level I Status .16%
Level II Status .20%
Level III Status .225%
Level IV Status .25%
Level V Status .325%
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Any change in the Applicable Eurodollar Margin shall be effective
as of the date on which the Borrower has received official
notification of the change in the Debt Rating giving rise thereto
and shall apply during the period commencing on the effective date
of such change and ending on the date immediately preceding the
effective date of the next such change.
"Applicable Facility Fee Percentage" means, on any date,
subject to the following sentence of this definition, the
applicable of the following percentages:
Applicable Facility
Debt Rating on Such Date Fee Percentage
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Level I Status .09%
Level II Status .10%
Level III Status .125%
Level IV Status .15%
Level V Status .175%
Any change in the Applicable Facility Fee Percentage shall be
effective as of the date on which the Borrower has received
official notification of the change in the Debt Rating giving rise
thereto and shall apply during the period commencing on the
effective date of such change and ending on the date immediately
preceding the effective date of the next such change.
"Arranger" means First Chicago Capital Markets, Inc., and its
successors and assigns.
"Article" means an article of this Agreement unless another
document is specifically referenced.
"Authorized Officer" means any of the chief executive officer
or chief financial officer of the Borrower, acting singly.
"Bankruptcy Code" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code,
sections 1 et seq., as the same may be amended from time to time,
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and any successor thereto or replacement therefor which may be
hereafter enacted.
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"Borrower" means URC Holdings Corp., a Delaware corporation,
and its successors and assigns.
"Borrowing Date" means a date on which an Advance is made
hereunder.
"Business Day" means (a) with respect to any borrowing,
payment or rate selection of Eurodollar Advances, a day (other
than a Saturday or Sunday) on which banks generally are open in
Chicago for the conduct of substantially all of their commercial
lending activities and on which dealings in United States dollars
are carried on in the London interbank market, and (b) for all
other purposes, a day (other than a Saturday or Sunday) on which
banks generally are open in Chicago for the conduct of
substantially all of their commercial lending activities.
"Capitalized Lease" of a Person means any lease of Property
by such Person as lessee which would be capitalized on a balance
sheet of such Person prepared in accordance with Agreement
Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount
of the obligations of such Person under Capitalized Leases which
would be shown as a liability on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Cash Equivalents" means Investments maturing within one year
from the date of investment (excluding (x) Investments as to which
the principal amount to be repaid may be subject to fluctuation
and (y) mortgage backed securities consisting of principal only or
interest only strips) in (a) certificates of deposit, Eurodollar
time deposits and other interest bearing deposits or accounts with
United States commercial banks having a combined capital and
surplus of at least $500,000,000 and rated C or better by ▇▇▇▇▇
▇▇▇▇▇▇▇▇ and Associates or with any Lender, (b) certificates of
deposit, other interest bearing accounts or deposits and demand
deposits with other United States commercial banks, which deposits
and accounts are in amounts fully insured by the Federal Deposit
Insurance Corporation, (c) obligations issued or unconditionally
guaranteed by the United States government or issued by an agency
thereof and backed by the full faith and credit of the United
States, (d) direct obligations issued by any state of the United
States or any political subdivision thereof which have the highest
rating obtainable from S&P on the date of investment, (e)
commercial paper rated A-1 or better by S&P and P-1 or better by
▇▇▇▇▇'▇ or (f) money market mutual funds identified by the
valuation office of the NAIC as requiring no investment reserve.
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"Change" is defined in Section 3.2.
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"Change in Control" means (a) Alleghany shall fail to
maintain beneficial ownership, directly or indirectly, free and
clear of any Lien, of at least 51% of the outstanding voting stock
of the Borrower (unless such failure arises from a Public Offering
and no Person (other than Alleghany) or Persons acting in concert
acquire (either in such Public Offering or thereafter) beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934) of
10% or more of the outstanding voting stock of the Borrower), or
(b) during any period of 25 consecutive calendar months,
commencing on the date of this Agreement, the ceasing of those
individuals (the "Continuing Directors") who (i) were directors of
the Borrower on the first day of each such period or (ii)
subsequently became directors of the Borrower and whose initial
election or initial nomination for election subsequent to that
date was approved by a majority of the Continuing Directors then
on the board of directors of the Borrower, to constitute a
majority of the board of directors of the Borrower.
"Closing Transactions" is defined in Section 4.1(d).
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"Code" means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such
Lender to make Ratable Loans not exceeding the amount set forth
opposite its signature below and as set forth in any Notice of
Assignment relating to any assignment which has become effective
pursuant to Section 12.3.2, as such amount may be modified from
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time to time pursuant to the terms hereof.
"Competitive Bid Advance" means a borrowing hereunder
consisting of the aggregate amount of the several Competitive Bid
Loans made by some or all of the Lenders to the Borrower at the
same time and for the same Interest Period.
"Competitive Bid Borrowing Notice" is defined in Section
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2.3.6.
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"Competitive Bid Loan" means a Eurodollar Bid Rate Loan or an
Absolute Rate Loan, or both, as the case may be.
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"Competitive Bid Margin" means the margin above or below the
applicable Eurodollar Base Rate offered for a Eurodollar Bid Rate
Loan, expressed as a percentage (rounded to the nearest 1/100 of
1%) to be added or subtracted from such Eurodollar Base Rate.
"Competitive Bid Note" means a promissory note in
substantially the form of Exhibit B hereto, with appropriate
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insertions, duly executed and delivered to the Agent by the
Borrower for the account of a Lender and payable to the order of
such Lender, including any amendment, modification, renewal or
replacement of such promissory note.
"Competitive Bid Quote" means a Competitive Bid Quote
substantially in the form of Exhibit E hereto completed and
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delivered by a Lender to the Agent in accordance with Section
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2.3.4.
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"Competitive Bid Quote Request" means a Competitive Bid Quote
Request substantially in the form of Exhibit C hereto completed
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and delivered by the Borrower to the Agent in accordance with
Section 2.3.2.
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"Condemnation" is defined in Section 7.8.
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"Consolidated" or "consolidated", when used in connection
with any calculation, means a calculation to be determined on a
consolidated basis for the Borrower and its Subsidiaries in
accordance with Agreement Accounting Principles.
"Consolidated Person" means, for the taxable year of
reference of Alleghany, each Person which has joined or which is
required to join in the filing of a consolidated federal income
tax return with Alleghany.
"Contingent Obligation" of a Person means any agreement,
undertaking or arrangement by which such Person assumes,
guarantees, endorses, contingently agrees to purchase or provide
funds for the payment of, or otherwise becomes or is contingently
liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other
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financial condition of any other Person, or otherwise assures any
creditor of such other Person against loss, including, without
limitation, any comfort letter, operating agreement or take-or-pay
contract.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the
Borrower or any of its Subsidiaries, are treated as a single
employer under Section 414 of the Code.
"Conversion/Continuation Notice" is defined in Section 2.2.4.
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"Corporate Base Rate" means a rate per annum equal to the
corporate base rate of interest announced by First Chicago from
time to time, changing when and as said corporate base rate
changes. The Corporate Base Rate is a reference rate and does not
necessarily represent the lowest or best rate of interest actually
charged to any customer. First Chicago may make commercial loans
or other loans at rates of interest at, above or below the
Corporate Base Rate.
"Debt Rating" means the credit rating assigned to the
Borrower's senior, unsecured long term Indebtedness (without
credit enhancement) as publicly announced by ▇▇▇▇▇'▇ or S&P, as
the case may be. If the rating system of ▇▇▇▇▇'▇ or S&P shall
materially change from that in effect on the date of this
Agreement, then the parties hereto shall negotiate in good faith
to amend the references to such ratings in this Agreement to
fairly reflect such changes.
"Default" means an event described in Article VII.
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"Environmental Laws" is defined in Section 5.19.
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"Environmental Permits" is defined in Section 5.19.
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"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurodollar Advance" means a Eurodollar Bid Rate Advance or a
Eurodollar Ratable Advance, or both, as the case may be.
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"Eurodollar Auction" means a solicitation of Competitive Bid
Quotes setting forth Eurodollar Bid Rates pursuant to Section 2.3.
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"Eurodollar Base Rate" means, with respect to a Eurodollar
Advance for the relevant Eurodollar Interest Period, the rate
determined by the Agent to be the rate at which deposits in U.S.
dollars are offered by First Chicago to first-class banks in the
London interbank market at approximately 11 a.m. (London time) two
Business Days prior to the first day of such Eurodollar Interest
Period, in the approximate amount of First Chicago's relevant
Eurodollar Ratable Loan (or in the case of a Eurodollar Bid Rate
Advance, in an amount comparable to the amount of such Advance)
and having a maturity approximately equal to such Eurodollar
Interest Period.
"Eurodollar Bid Rate" means, with respect to a Eurodollar Bid
Rate Loan made by a given Lender for the relevant Eurodollar
Interest Period, the sum of (a) the Eurodollar Base Rate and (b)
the Competitive Bid Margin offered by such Lender and accepted by
the Borrower.
"Eurodollar Bid Rate Advance" means a Competitive Bid Advance
which bears interest at a Eurodollar Bid Rate.
"Eurodollar Bid Rate Loan" means a Loan which bears interest
at the Eurodollar Bid Rate.
"Eurodollar Interest Period" means, with respect to a
Eurodollar Ratable Advance or a Eurodollar Bid Rate Advance, a
period of one, two, three or six months commencing on a Business
Day selected by the Borrower pursuant to this Agreement. Such
Eurodollar Interest Period shall end on (but exclude) the day
which corresponds numerically to such date one, two, three or six
months thereafter; provided, however, that if there is no such
numerically corresponding day in such next, second, third or sixth
succeeding month, such Eurodollar Interest Period shall end on the
last Business Day of such next, second, third or sixth succeeding
month. If a Eurodollar Interest Period would otherwise end on a
day which is not a Business Day, such Eurodollar Interest Period
shall end on the next succeeding Business Day; provided, however,
that if said next succeeding Business Day falls in a new month,
such Eurodollar Interest Period shall end on the immediately
preceding Business Day.
"Eurodollar Loan" means a Eurodollar Ratable Loan or
Eurodollar Bid Rate Loan, or both, as the case may be.
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"Eurodollar Ratable Advance" means an Advance which bears
interest at a Eurodollar Rate requested by the Borrower pursuant
to Section 2.2.3.
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"Eurodollar Ratable Loan" means a Loan which bears interest
at a Eurodollar Rate requested by the Borrower pursuant to Section
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2.2.3.
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"Eurodollar Rate" means, with respect to a Eurodollar Ratable
Advance for the relevant Eurodollar Interest Period, the sum of
(a) the quotient of (i) the Eurodollar Base Rate applicable to
such Eurodollar Interest Period, divided by (ii) one minus the
Reserve Requirement (expressed as a decimal) applicable to such
Eurodollar Interest Period, plus (b) the Applicable Eurodollar
Margin or Margins, as applicable, for such Eurodollar Interest
Period. The Eurodollar Rate shall be rounded to the next higher
multiple of 1/16 of 1% if the rate is not such a multiple.
"Facility Termination Date" means October 22, 2001.
"Federal Funds Effective Rate" means, for any day, an
interest rate per annum equal to the weighted average of the rates
on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such
day, as published for such day (or, if such day is not a Business
Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations at
approximately 10 a.m. (Chicago time) on such day on such
transactions received by the Agent from three Federal funds
brokers of recognized standing selected by the Agent in its sole
discretion.
"Financial Statements" is defined in Section 5.5.
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"First Chicago" means The First National Bank of Chicago in
its individual capacity as a Lender and not in its capacity as
Agent, and its successors.
"Fiscal Quarter" means one of the four three-month accounting
periods comprising a Fiscal Year.
"Fiscal Year" means the twelve-month accounting period ending
December 31 of each year.
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"Floating Rate" means, for any day, a rate per annum equal to
the higher of (a) the Corporate Base Rate for such day, or (b) the
sum of the Federal Funds Effective Rate for such day plus one-half
percent (.50%) per annum.
"Floating Rate Advance" means an Advance which bears interest
at the Floating Rate.
"Floating Rate Loan" means a Ratable Loan which bears
interest at the Floating Rate.
"Governmental Authority" means any government (foreign or
domestic) or any state or other political subdivision thereof or
any governmental body, agency, authority, department or commission
(including without limitation any board of insurance, insurance
department or insurance commissioner or any taxing authority or
political subdivision) or any instrumentality or officer thereof
(including without limitation any court or tribunal) exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government and any corporation,
partnership or other entity directly or indirectly owned or
controlled by or subject to the control of any of the foregoing.
"Hazardous Materials" is defined in Section 5.19.
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"Indebtedness" of a Person means such Person's (a)
obligations for borrowed money, (b) obligations representing the
deferred purchase price of Property or services (other than
accounts payable arising in the ordinary course of such Person's
business payable on terms customary in the trade), (c)
obligations, whether or not assumed, secured by Liens or payable
out of the proceeds or production from Property now or hereafter
owned or acquired by such Person, (d) obligations which are
evidenced by notes, acceptances, or similar instruments, (e)
Capitalized Lease Obligations, (f) Rate Hedging Obligations, (g)
Contingent Obligations, (h) obligations for which such Person is
obligated pursuant to or in respect of a Letter of Credit and (i)
repurchase obligations or liabilities of such Person with respect
to accounts or notes receivable sold by such Person.
"Insurance Subsidiary" means any Subsidiary which is engaged
in the insurance business.
"Interest Period" means a Eurodollar Interest Period or an
Absolute Rate Interest Period.
-11-
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees
made in the ordinary course of business), extension of credit
(other than accounts receivable arising in the ordinary course of
business on terms customary in the trade), deposit account or
contribution of capital by such Person to any other Person or any
investment in, or purchase or other acquisition of, the stock,
partnership interests, notes, debentures or other securities of
any other Person made by such Person.
"Invitation for Competitive Bid Quotes" means an Invitation
for Competitive Bid Quotes substantially in the form of Exhibit D
---------
hereto, completed and delivered by the Agent to the Lenders in
accordance with Section 2.3.3.
-------------
"Lenders" means the lending institutions listed on the
signature pages of this Agreement and their respective successors
and assigns.
"Lending Installation" means, with respect to a Lender or the
Agent, any office, branch, subsidiary or affiliate of such Lender
or the Agent.
"Letter of Credit" of a Person means a letter of credit or
similar instrument which is issued upon the application of such
Person or upon which such Person is an account party or for which
such Person is in any way liable.
"Level I Status" exists at any date if at such date the Debt
Rating is (a) A2 (or the equivalent) or higher by ▇▇▇▇▇'▇ or A (or
the equivalent) or higher by S&P and (b) not lower than Baa3 (or
the equivalent) by ▇▇▇▇▇'▇ or BBB- (or the equivalent) by S&P.
"Level II Status" exists at any date if at such date (a) the
Debt Rating is A3 (or the equivalent) or higher by ▇▇▇▇▇'▇ or A-
(or the equivalent) or higher by S&P, (b) the Debt Rating is not
lower than Baa3 (or the equivalent) by ▇▇▇▇▇'▇ or BBB- (or the
equivalent) by S&P and (c) Level I Status does not exist.
"Level III Status" exists at any date if at such date (a) the
Debt Rating is Baa1 (or the equivalent) or higher by ▇▇▇▇▇'▇ or
BBB+ (or the equivalent) or higher by S&P, (b) the Debt Rating is
not lower than Baa3 (or the equivalent) by ▇▇▇▇▇'▇ or BBB- (or the
equivalent) by S&P and (c) neither Level I Status nor Level II
Status exists.
-12-
"Level IV Status" exists at any date if at such date (a) the
Debt Rating is Baa3 (or the equivalent) or higher by ▇▇▇▇▇'▇ and
BBB- (or the equivalent) or higher by S&P and (b) none of Level I
Status, Level II Status or Level III Status exists.
"Level V Status" exists at any date if at such date (a) the
Debt Rating is lower than Baa3 (or the equivalent) by ▇▇▇▇▇'▇ or
lower than BBB- (or the equivalent) by S&P or (b) the Borrower's
senior, unsecured long term Indebtedness (without credit
enhancement) is unrated by both ▇▇▇▇▇'▇ and S&P.
"Leverage Ratio" means, with respect to the Borrower on a
consolidated basis with its Subsidiaries, at any time, the ratio
of (a) Indebtedness to (b) the sum of (i) Indebtedness and (ii)
Net Worth, excluding the impact of Statement of Financial
Accounting Standards No. 115. For the purpose of determining this
ratio, Contingent Obligations shall be excluded from Indebtedness
to the extent that they relate to underlying obligations which
would be included in Indebtedness.
"License" means any license, certificate of authority, permit
or other authorization which is required to be obtained from any
Governmental Authority in connection with the operation, ownership
or transaction of insurance business.
"Lien" means any security interest, lien (statutory or
other), mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance or preference, priority or other security
agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a
vendor or lessor under any conditional sale, Capitalized Lease or
other title retention agreement).
"Loan" means, with respect to a Lender, such Lender's portion
of any Advance and "Loans" means, with respect to the Lenders, the
aggregate of all Advances.
"Loan Documents" means this Agreement, the Notes and the
other documents and agreements contemplated hereby and executed by
the Borrower in favor of the Agent or any Lender.
"Margin Stock" has the meaning assigned to that term under
Regulation U.
"Material Adverse Effect" means a material adverse effect on
(a) the business, Property, condition (financial or other),
performance, operations, or prospects of the Borrower and its
Subsidiaries, taken as a whole, (b) the ability of the Borrower to
-13-
perform its obligations under the Loan Documents, or (c) the
validity or enforceability of any of the Loan Documents or the
rights or remedies of the Agent or the Lenders thereunder.
"▇▇▇▇▇'▇" means ▇▇▇▇▇'▇ Investors Service, Inc., a Delaware
corporation, together with any Person succeeding thereto by
merger, consolidation or acquisition of all or substantially all
of its assets, including substantially all of its business of
rating securities.
"Multiemployer Plan" means a Plan maintained pursuant to a
collective bargaining agreement which is subject to Title IV of
ERISA to which the Borrower or any member of the Controlled Group
is a party to which more than one employer is obligated to make
contributions.
"NAIC" means the National Association of Insurance
Commissioners or any successor thereto, or in lieu thereof, any
other association, agency or other organization performing
advisory, coordination or other like functions among insurance
departments, insurance commissioners and similar Governmental
Authorities of the various states of the United States toward the
promotion of uniformity in the practices of such Governmental
Authorities.
"Net Worth" means at any date the stockholders' equity of the
Borrower and its Subsidiaries determined on a consolidated basis
in accordance with Agreement Accounting Principles.
"Notes" means, collectively, the Competitive Bid Notes and
the Ratable Notes; and "Note" means any one of the Notes.
"Notice of Assignment" is defined in Section 12.3.2.
--------------
"Obligations" means all unpaid principal of and accrued and
unpaid interest on the Notes, all accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of the
Borrower to the Lenders or to any Lender, the Agent or any
indemnified party hereunder arising under any of the Loan
Documents and any Rate Hedging Obligations or foreign exchange
contracts of the Borrower owing to the Agent or any Lender.
"Participants" is defined in Section 12.2.1.
--------------
"Payment Date" means the last day of each March, June,
September and December.
-14-
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Person" means any natural person, corporation, firm, limited
liability company, joint venture, partnership, association,
enterprise, trust or other entity or organization, or any
government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means an employee pension benefit plan, as defined in
Section 3(2) of ERISA, as to which the Borrower or any member of
the Controlled Group may have any liability.
"Property" of a Person means any and all property, whether
real, personal, tangible, intangible, or mixed, of such Person, or
other assets owned, leased or operated by such Person.
"pro-rata" means, when used with respect to a Lender, and any
described aggregate or total amount, an amount equal to such
Lender's pro-rata share or portion based on its percentage of the
Aggregate Commitment or if the Aggregate Commitment has been
terminated, its percentage of the aggregate principal amount of
outstanding Loans.
"Public Offering" means any public offering after the date
hereof of shares of the Borrower's common stock, or options,
warrants or securities convertible into or exchangeable for, or
rights to acquire, shares of such common stock, which is
registered pursuant to an effective registration statement filed
by the Borrower under the Securities Act (other than (a) a
registration statement filed on Form S-4 (or any successor form
thereto) or (b) a registration statement filed on Form S-8 (or any
successor form thereto), or any other applicable form with respect
to the issuance of shares of such common stock, or options,
warrants or securities convertible into or exchangeable for, or
rights to acquire, such shares of common stock, issued or to be
issued or granted to directors, officers or employees of the
Borrower and its Subsidiaries).
"Purchase" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement,
by which the Borrower or any of its Subsidiaries (a) acquires any
going business or all or substantially all of the assets of any
firm, corporation or division or line of business thereof, whether
through purchase of assets, merger or otherwise, or (b) directly
or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in
-15-
number of votes) of the securities of a corporation which have
ordinary voting power for the election of directors (other than
securities having such power only by reason of the happening of a
contingency) or a majority (by percentage or voting power) of the
outstanding partnership interests of a partnership or membership
interests of a limited liability company.
"Purchasers" is defined in Section 12.3.1.
--------------
"Quarterly Statement" means the quarterly statutory financial
statement of any Insurance Subsidiary required to be filed with
the insurance commissioner (or similar authority) of its
jurisdiction of incorporation or, if no specific form is so
required, in the form of financial statements permitted by such
insurance commissioner (or such similar authority) to be used for
filing quarterly statutory financial statements and shall contain
the type of financial information permitted by such insurance
commissioner (or such similar authority) to be disclosed therein,
together with all exhibits or schedules filed therewith.
"Ratable Advance" means a borrowing hereunder consisting of
the aggregate amount of the several Ratable Loans made by the
Lenders to the Borrower at the same time, of the same Type and for
the same Interest Period.
"Ratable Borrowing Notice" is defined in Section 2.2.3.
-------------
"Ratable Loan" means a Loan made by a Lender pursuant to
Section 2.2 hereof.
-----------
"Ratable Note" means a promissory note in substantially the
form of Exhibit A hereto, duly executed and delivered to the Agent
---------
by the Borrower for the account of each Lender and payable to the
order of a Lender in the amount of its Commitment, including any
amendment, modification, renewal or replacement of such promissory
note.
"Rate Hedging Obligations" of a Person means any and all
obligations of such Person, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (a) any and all agreements, devices
or arrangements designed to protect at least one of the parties
thereto from the fluctuations of interest rates, exchange rates or
-16-
forward rates applicable to such party's assets, liabilities or
exchange transactions, including, but not limited to, dollar-
denominated or cross-currency interest rate exchange agreements,
forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or interest rate
options, puts and warrants, and (b) any and all cancellations,
buybacks, reversals, terminations or assignments of any of the
foregoing.
"Regulation D" means Regulation D of the Board of Governors
of the Federal Reserve System as from time to time in effect and
any successor thereto or other regulation or official
interpretation of said Board of Governors relating to reserve
requirements applicable to depositary institutions.
"Regulation G" means Regulation G of the Board of Governors
of the Federal Reserve System as from time to time in effect and
shall include any successor or other regulation or official
interpretation of said Board of Governors relating to the
extension of credit by Persons other than banks, brokers and
dealers for the purpose of purchasing or carrying margin stocks
applicable to such Persons.
"Regulation T" means Regulation T of the Board of Governors
of the Federal Reserve System as from time to time in effect and
shall include any successor or other regulation or official
interpretation of such Board of Governors relating to the
extension of credit by securities brokers and dealers for the
purpose of purchasing or carrying margin stocks applicable to such
Persons.
"Regulation U" means Regulation U of the Board of Governors
of the Federal Reserve System as from time to time in effect and
any successor or other regulation or official interpretation of
said Board of Governors relating to the extension of credit by
banks for the purpose of purchasing or carrying margin stocks
applicable to such Persons.
"Regulation X" means Regulation X of the Board of Governors
of the Federal Reserve System as from time to time in effect and
shall include any successor or other regulation or official
interpretation of said Board of Governors relating to the
extension of credit by the specified lenders for the purpose of
purchasing or carrying margin stocks applicable to such Persons.
"Release" is defined in the Comprehensive Environmental
Response, Compensation and Liability Act, as amended, 42 U.S.C.
39601 et seq.
-- ---
-17-
"Replacement Lender" is defined in Section 3.6.
-----------
"Reportable Event" means a reportable event as defined in
Section 4043 of ERISA and the regulations issued under such
section, with respect to a Plan, excluding, however, such events
as to which the PBGC has by regulation unconditionally or
conditionally waived the requirement of Section 4043(a) of ERISA
that it be notified within 30 days of the occurrence of such
event; provided, that a failure to meet the minimum funding
standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such
waiver of the notice requirement in accordance with either Section
4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at
least 66-2/3% of the Aggregate Commitment or, if the Aggregate
Commitment has been terminated, Lenders in the aggregate holding
at least 66-2/3% of the aggregate unpaid principal amount of the
outstanding Loans.
"Reserve Requirement" means, with respect to an Interest
Period, the maximum aggregate reserve requirement (including all
basic, supplemental, marginal and other reserves) which is imposed
under Regulation D on Eurocurrency liabilities.
"Risk-Based Capital Guidelines" is defined in Section 3.2.
-----------
"S&P" means Standard & Poor's Ratings Group, a division of
▇▇▇▇▇▇-▇▇▇▇, Inc., together with any Person succeeding thereto by
merger, consolidation or acquisition of all or substantially all
of its assets, including substantially all of its business of
rating securities.
"SAP" means, with respect to any Insurance Subsidiary, the
statutory accounting practices prescribed or permitted by the
insurance commissioner (or other similar authority) in the
jurisdiction of such Insurance Subsidiary for the preparation of
annual statements and other financial reports by insurance
companies of the same type as such Insurance Subsidiary in effect
from time to time, applied in a manner consistent with those used
in preparing the financial statements referred to in Section
--------
5.5(c) and (d); provided, that with respect to the financial
------ ---
-18-
covenants contained in Section 6.22 hereof, the related
------------
definitions, and the computations required thereby, "SAP" means
such statutory accounting practices (except where Agreement
Accounting Principles are applicable) in effect on the date
hereof, applied in a manner consistent with those used in
preparing the financial statements referred to in Section 5.5(c)
--------------
and (d).
-------
"Section" means a numbered section of this Agreement, unless
another document is specifically referenced.
"Single Employer Plan" means a Plan subject to Title IV of
ERISA maintained by the Borrower or any member of the Controlled
Group for employees of the Borrower or any member of the
Controlled Group, other than a Multiemployer Plan.
"Solvent" means, when used with respect to a Person, that (a)
the fair saleable value of the assets of such Person is in excess
of the total amount of the present value of its liabilities
(including for purposes of this definition all liabilities
(including loss reserves as determined by such Person), whether or
not reflected on a balance sheet prepared in accordance with
Agreement Accounting Principles and whether direct or indirect,
fixed or contingent, secured or unsecured, disputed or
undisputed), (b) such Person is able to pay its debts or
obligations in the ordinary course as they mature and (c) such
Person does not have unreasonably small capital to carry on its
business as conducted and as proposed to be conducted. "Solvency"
shall have a correlative meaning.
"Statutory Net Income" means, with respect to any Insurance
Subsidiary for any computation period, the net income earned by
such Person during such period, as determined in accordance with
SAP ("Underwriting and Investment Income" exhibit, Line 16 of the
Annual Statement).
"Statutory Surplus" means, with respect to any Insurance
Subsidiary at any time, the surplus as regards policyholders of
such Insurance Subsidiary at such time, as determined in
accordance with SAP ("Liabilities, Surplus and Other Funds"
statement, Page 3, Line 25, Column 1 of the Annual Statement).
"Subsidiary" of a Person means (a) any corporation more than
50% of the outstanding securities having ordinary voting power of
which shall at the time be owned or controlled, directly or
-19-
indirectly, by such Person or by one or more of its Subsidiaries
or by such Person and one or more of its Subsidiaries, or (b) any
partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or
controlled; provided, that "Subsidiary" shall not include URC
Barbados Holding Corp. and entities owned by it so long as the
Borrower does not own more than 50% of the voting securities of
URC Barbados Holding Corp. for more than 3 days. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall
mean a Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of
the Borrower and its Subsidiaries, Property which (a) represents
more than 10% of the consolidated assets of the Borrower and its
Subsidiaries, as would be shown in the consolidated financial
statements of the Borrower and its Subsidiaries as at the end of
the Fiscal Quarter next preceding the date on which such
determination is made, or (b) is responsible for more than 10% of
the consolidated net revenues or of the consolidated Net Income of
the Borrower and its Subsidiaries for the 12-month period ending
as of the end of the Fiscal Quarter next preceding the date of
determination.
"Tax Sharing Agreements" means, collectively, that certain
Amendment to Agreement dated as of August 18, 1995 between
Alleghany and the Borrower, that certain Amendment to Agreement
dated as of December 1, 1995 between the Borrower and URC, that
certain Amendment to Agreement dated as of December 1, 1995
between the Borrower and URC Risk Managers, Inc., that certain
Agreement dated as of December 1, 1995 between the Borrower and
The Underwriting Center, Inc., that certain Agreement dated as of
December 1, 1995 between The Underwriting Center, Inc. and The
Underwriting Center of Georgia, Inc. (now known as The Center E&S
Insurance Services, Inc.), that certain Amendment to Agreement
dated as of December 1, 1995 between URC and Commercial
Underwriters Insurance Company, and that certain Agreement dated
as of December 1, 1995 between URC and Underwriters Insurance
Company, as each is in effect on the date of this Agreement,
together with any other agreements entered into pursuant to
Section 6.23, and as any such agreement may be hereafter amended,
------------
subject to compliance with the terms hereof.
"Termination Event" means, with respect to a Plan which is
subject to Title IV of ERISA, (a) a Reportable Event, (b) the
withdrawal of the Borrower or any other member of the Controlled
Group from such Plan during a plan year in which the Borrower or
-20-
any other member of the Controlled Group was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or was deemed
such under Section 4068(f) of ERISA, (c) the termination of such
Plan, the filing of a notice of intent to terminate such Plan or
the treatment of an amendment of such Plan as a termination under
Section 4041 of ERISA, (d) the institution by the PBGC of
proceedings to terminate such Plan or (e) any event or condition
which could reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or appointment of a
trustee to administer, such Plan.
"Transferee" is defined in Section 12.4.
------------
"Type" means, with respect to any Advance, its nature as a
Floating Rate Advance, Eurodollar Advance or Absolute Rate
Advance.
"Unfunded Liabilities" means the amount (if any) by which the
present value of all vested and unvested accrued benefits under
all Single Employer Plans exceeds the fair market value of all
such Plan assets allocable to such benefits, all determined as of
the then most recent valuation date for such Plans using PBGC
actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of
time or the giving of notice, or both, would constitute a Default.
"URC" means Underwriters Reinsurance Company, a New Hampshire
insurance company and a Wholly Owned Subsidiary of the Borrower.
"Wholly Owned Subsidiary" of a Person means (a) any
Subsidiary all of the outstanding voting securities of which shall
at the time be owned or controlled, directly or indirectly, by
such Person or one or more Wholly Owned Subsidiaries of such
Person, or by such Person and one or more Wholly Owned
Subsidiaries of such Person, or (b) any partnership, association,
joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall at
the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both
the singular and plural forms of the defined terms. References
herein to particular columns, lines or sections of any Person's
Annual Statement shall be deemed, where appropriate, to be
references to the corresponding column, line or section of such
Person's Quarterly Statement, or if no such corresponding column,
-21-
line or section exists or if any report form changes, then to the
corresponding item referenced thereby.
ARTICLE II
THE FACILITY
------------
2.1. The Facility.
------------
2.1.1. Description of Facility. The Lenders hereby
-----------------------
establish in favor of the Borrower a revolving credit facility
pursuant to which, and upon the terms and subject to the
conditions herein set out:
(a) each Lender severally agrees to make
Ratable Loans to the Borrower in accordance with Section 2.2 in
-----------
amounts not to exceed in the aggregate at any one time outstanding
the amount of such Lender's Commitment less the amount of such
Lender's pro-rata share of the outstanding principal amount of all
Competitive Bid Advances (regardless of which Lender or Lenders
made such Competitive Bid Advances) exclusive of Competitive Bid
Advances being repaid substantially contemporaneously with the
making of any such Ratable Loans (but not later than the close of
business on the same day); and
(b) each Lender may, in its sole discretion,
make bids to make Competitive Bid Loans to the Borrower, and make
such Loans, in accordance with Section 2.3.
-----------
2.1.2. Facility Amount. In no event may the
---------------
aggregate principal amount of all outstanding Advances (including
both the Ratable Advances and the Competitive Bid Advances) at any
time exceed the Aggregate Commitment.
2.1.3. Availability of Facility. Subject to the
------------------------
terms of this Agreement, from and including the date hereof to,
but not including, the Facility Termination Date, the Borrower may
borrow, repay and reborrow Advances hereunder. All outstanding
Advances and all other unpaid Obligations shall be due and payable
in full by the Borrower on the Facility Termination Date.
-22-
2.2. Ratable Advances.
----------------
2.2.1. Ratable Advances. Each Ratable Advance
----------------
hereunder shall consist of borrowings made from the several
Lenders ratably in proportion to the amounts of their respective
Commitments. The Borrower's obligation to pay the principal of,
and interest on, the Ratable Advances shall be evidenced by the
Ratable Notes. Although the Ratable Notes shall be dated the date
of the initial Advance, interest in respect thereof shall be
payable only for the periods during which the Loans evidenced
thereby are outstanding and, although the stated amount of each
Ratable Note shall be equal to the applicable Lender's Commitment,
each Ratable Note shall be enforceable, with respect to the
Borrower's obligation to pay the principal amount thereof, only to
the extent of the unpaid principal amount of the Ratable Loans at
the time evidenced thereby.
2.2.2. Ratable Advance Rate Options. The Ratable
----------------------------
Advances may be Floating Rate Advances or Eurodollar Ratable
Advances, or a combination thereof, selected by the Borrower in
accordance with Section 2.2.3 or 2.2.4. No Ratable Advance may
------------- -----
mature after, or have an Interest Period which extends beyond, the
Facility Termination Date.
2.2.3. Method of Selecting Types and Interest
--------------------------------------
Periods for Ratable Advances. The Borrower shall select the Type
----------------------------
of each Ratable Advance and, in the case of each Eurodollar
Ratable Advance, the Eurodollar Interest Period applicable to such
Ratable Advance. The Borrower shall give the Agent irrevocable
notice (a "Ratable Borrowing Notice") not later than 11:00 a.m.
(Chicago time) on the Borrowing Date of each Floating Rate Advance
and three Business Days before the Borrowing Date for each
Eurodollar Ratable Advance. Notwithstanding the foregoing, a
Ratable Borrowing Notice for a Floating Rate Advance may be given
not later than 30 minutes after the time which the Borrower is
required to reject one or more bids offered in connection with an
Absolute Rate Auction pursuant to Section 2.3.6 and a Ratable
-------------
Borrowing Notice for a Eurodollar Ratable Advance may be given not
later than 30 minutes after the time the Borrower is required to
-23-
reject one or more bids offered in connection with a Eurodollar
Auction pursuant to Section 2.3.6. A Ratable Borrowing Notice
-------------
shall specify:
(a) the Borrowing Date, which shall be a
Business Day, of such Ratable Advance;
(b) the aggregate amount of such Ratable
Advance, which, when added to the aggregate amount of all
outstanding Ratable Advances and Competitive Bid Advances and
after giving effect to the repayment of any such outstanding
Advances out of the proceeds of the requested Ratable
Advance, shall not exceed the Aggregate Commitment;
(c) the Type of Advance selected; and
(d) in the case of each Eurodollar Ratable
Advance, the Eurodollar Interest Period applicable thereto
(which may not end after the Facility Termination Date).
2.2.4. Conversion and Continuation of Outstanding
------------------------------------------
Ratable Advances. Floating Rate Advances shall continue as
----------------
Floating Rate Advances unless and until such Floating Rate
Advances are converted into Eurodollar Ratable Advances pursuant
to this Section 2.2.4. Each Eurodollar Ratable Advance shall
-------------
continue as a Eurodollar Ratable Advance until the end of the then
applicable Eurodollar Interest Period therefor, at which time such
Eurodollar Ratable Advance shall be automatically converted into a
Floating Rate Advance unless the Borrower shall have given the
Agent a Conversion/Continuation Notice requesting that, at the end
of such Eurodollar Interest Period, such Eurodollar Ratable
Advance continue as a Eurodollar Ratable Advance for the same or
another Eurodollar Interest Period. Subject to the terms of
Section 2.6, the Borrower may elect from time to time to convert
-----------
all or any part of a Ratable Advance of any Type into any other
Type or Types of Ratable Advances; provided that any conversion of
any Eurodollar Ratable Advance shall be made on, and only on, the
last day of the Eurodollar Interest Period applicable thereto.
The Borrower shall give the Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of a Ratable
Advance or continuation of a Eurodollar Ratable Advance not later
than 11:00 a.m. (Chicago time) (x) on the date of the requested
conversion, in the case of a conversion to a Floating Rate
-24-
Advance, or (y) at least three Business Days, in the case of a
conversion into or continuation of a Eurodollar Ratable Advance,
prior to the date of the requested conversion or continuation,
specifying:
(a) the requested date, which shall be a
Business Day, of such conversion or continuation;
(b) the aggregate amount and Type of Ratable
Advance which is to be converted or continued; and
(c) the amount and Type(s) of Ratable
Advance(s) into which such Ratable Advance is to be converted
or continued and, in the case of a conversion into or
continuation of a Eurodollar Ratable Advance, the duration of
the Eurodollar Interest Period applicable thereto.
2.3. Competitive Bid Advances.
------------------------
2.3.1. Competitive Bid Option. In addition to
----------------------
Ratable Advances pursuant to Section 2.2, but subject to the terms
-----------
and conditions of this Agreement (including, without limitation,
the limitation set forth in Section 2.1.2 as to the maximum
-------------
aggregate principal amount of all outstanding Advances hereunder,
provided that a Lender may make Competitive Bid Advances in an
amount in excess of its Commitment), prior to the Facility
Termination Date the Borrower may, as set forth in this Section
-------
2.3, request the Lenders to make offers to make Competitive Bid
---
Advances to the Borrower. Each Lender may, but shall have no
obligation to, make such offers and the Borrower may, but shall
have no obligation to, accept any such offers in the manner set
forth in this Section 2.3. The Borrower's obligation to pay the
-----------
principal of, and interest on, the Competitive Bid Advances shall
be evidenced by the Competitive Bid Notes. Although the
Competitive Bid Notes shall be dated the date of the initial
Advance, interest in respect thereof shall be payable only for the
periods during which the Loans evidenced thereby are outstanding.
-25-
2.3.2. Competitive Bid Quote Request. When the
-----------------------------
Borrower wishes to request offers to make Competitive Bid Loans
under this Section 2.3, it shall transmit to the Agent by telecopy
-----------
a Competitive Bid Quote Request substantially in the form of
Exhibit C hereto so as to be received no later than (a) 11:00 a.m.
---------
(Chicago time) at least four Business Days prior to the Borrowing
Date proposed therein, in the case of a Eurodollar Auction or (b)
11:00 a.m. (Chicago time) at least one Business Day prior to the
Borrowing Date proposed therein, in the case of an Absolute Rate
Auction specifying:
(a) the proposed Borrowing Date, which shall
be a Business Day, for the proposed Competitive Bid Advance;
(b) the aggregate principal amount of such
Competitive Bid Advance;
(c) whether the Competitive Bid Quotes
requested are to set forth a Eurodollar Bid Rate, an Absolute
Rate, or both; and
(d) the Interest Period applicable thereto
(which may not end after the Facility Termination Date).
The Borrower may request offers to make Competitive Bid Loans for
more than one Interest Period in a single Competitive Bid Quote
Request. No Competitive Bid Quote Request shall be given within 5
Business Days (or such other number of days as the Borrower and
the Agent may agree) of any other Competitive Bid Quote Request.
A Competitive Bid Quote Request that does not conform
substantially to the format of Exhibit C hereto shall be rejected,
---------
and the Agent shall promptly notify the Borrower of such rejection
by telecopy.
2.3.3. Invitation for Competitive Bid Quotes.
-------------------------------------
Promptly and in any event before 3:00 p.m. (Chicago time) on the
same Business Day of receipt of a Competitive Bid Quote Request
that is not rejected pursuant to Section 2.3.2, the Agent shall
-------------
send to each of the Lenders by telecopy an Invitation for
Competitive Bid Quotes substantially in the form of Exhibit D
---------
hereto, which shall constitute an invitation by the Borrower to
-26-
each Lender to submit Competitive Bid Quotes offering to make the
Competitive Bid Loans to which such Competitive Bid Quote Request
relates in accordance with this Section 2.3.
-----------
2.3.4. Submission and Contents of Competitive Bid
------------------------------------------
Quotes.
------
(a) Each Lender may, in its sole discretion,
submit a Competitive Bid Quote containing an offer or offers
to make Competitive Bid Loans in response to any Invitation
for Competitive Bid Quotes. Each Competitive Bid Quote must
comply with the requirements of this Section 2.3.4 and must
-------------
be submitted to the Agent by telecopy at its offices
specified in or pursuant to Article XIII not later than (i)
------------
9:00 a.m. (Chicago time) at least three Business Days prior
to the proposed Borrowing Date, in the case of a Eurodollar
Auction or (ii) 9:00 a.m. (Chicago time) on the proposed
Borrowing Date, in the case of an Absolute Rate Auction (or,
in either case upon reasonable prior notice to the Lenders,
such other time and date as the Borrower and the Agent may
agree); provided that Competitive Bid Quotes submitted by
--------
First Chicago may only be submitted if the Agent or First
Chicago notifies the Borrower of the terms of the offer or
offers contained therein not later than 30 minutes prior to
the latest time at which the relevant Competitive Bid Quotes
must be submitted by the other Lenders. Subject to Articles
--------
IV and VIII, any Competitive Bid Quote so made shall be
-- ----
irrevocable except with the written consent of the Agent
given on the written instructions of the Borrower.
(b) Each Competitive Bid Quote shall be in
substantially the form of Exhibit E hereto and shall in any
---------
case specify:
(i) the proposed Borrowing Date, which
shall be the same as that set forth in the applicable
Invitation for Competitive Bid Quotes;
-27-
(ii) the principal amount of the
Competitive Bid Loan for which each such offer is being
made, which principal amount (a) may be greater than,
less than or equal to the Commitment of the quoting
Lender, (b) must be at least $2,000,000 and an integral
multiple of $250,000, and (c) may not exceed the
principal amount of Competitive Bid Loans for which
offers were requested;
(iii) in the case of a Eurodollar
Auction, the Competitive Bid Margin offered for each
such Competitive Bid Loan for each Interest Period
requested;
(iv) the minimum amount, if any, of the
Competitive Bid Loan which may be accepted by the
Borrower;
(v) in the case of an Absolute Rate
Auction, the Absolute Rate offered for each such
Competitive Bid Loan for each Interest Period
requested; and
(vi) the identity of the quoting
Lender.
(c) The Agent shall reject any Competitive Bid
Quote that:
(i) is not substantially in the form of
Exhibit E hereto or does not specify all of the
---------
information required by Section 2.3.4(b);
----------------
(ii) contains qualifying, conditional
or similar language, other than any such language
contained in Exhibit E hereto;
---------
(iii) proposes terms other than or in
addition to those set forth in the applicable
Invitation for Competitive Bid Quotes; or
(iv) arrives after the time set forth
in Section 2.3.4(a).
----------------
-28-
If any Competitive Bid Quote shall be rejected pursuant to this
Section 2.3.4(c), then the Agent shall promptly notify the
----------------
relevant Lender of such rejection.
(d) No Lender shall disclose any Competitive
Bid Quote (or any part thereof) to any other Lender (other
than the Agent), and the Agent shall not disclose the
Competitive Bid Quote (or any part thereof) of any Lender to
any other Lender.
2.3.5. Notice to Borrower. The Agent shall promptly
------------------
notify the Borrower of the terms (a) of any Competitive Bid Quote
submitted by a Lender that is in accordance with Section 2.3.4 and
-------------
(b) of any Competitive Bid Quote that amends, modifies or is
otherwise inconsistent with a previous Competitive Bid Quote
submitted by such Lender with respect to the same Competitive Bid
Quote Request. Any such subsequent Competitive Bid Quote shall be
disregarded by the Agent unless such subsequent Competitive Bid
Quote specifically states that it is submitted solely to correct a
manifest error in such former Competitive Bid Quote. The Agent's
notice to the Borrower shall specify the aggregate principal
amount of Competitive Bid Loans for which offers have been
received for each Interest Period specified in the related
Competitive Bid Quote Request and the respective principal amounts
and Eurodollar Bid Rates or Absolute Rates, as the case may be, so
offered.
2.3.6. Acceptance and Notice by Borrower. Not later
---------------------------------
than (a) 11:00 a.m. (Chicago time) at least three Business Days
prior to the proposed Borrowing Date, in the case of a Eurodollar
Auction or (b) 11:00 a.m. (Chicago time) on the proposed Borrowing
Date, in the case of an Absolute Rate Auction (or, in either case
upon reasonable prior notice to the Lenders, such other time and
date as the Borrower and the Agent may agree), the Borrower shall
notify the Agent of its acceptance or rejection of the offers so
notified to it pursuant to Section 2.3.5; provided, however, that
-------------
the failure by the Borrower to give such notice to the Agent shall
be deemed to be a rejection of all such offers. In the case of
acceptance, such notice (a "Competitive Bid Borrowing Notice")
--------------------------------
shall specify the aggregate principal amount of offers for each
Interest Period that are accepted. The Borrower may accept any
-29-
Competitive Bid Quote in whole or in part (subject to the terms of
Section 2.3.4(b)(iv)); provided that:
--------------------- --------
(a) the aggregate principal amount of each
Competitive Bid Advance may not exceed the applicable amount
set forth in the related Competitive Bid Quote Request,
(b) acceptance of offers may only be made on
the basis of ascending Eurodollar Bid Rates or Absolute
Rates, as the case may be, in respect of each Interest Period
for which Competitive Bid Quotes were requested, and
(c) the Borrower may not accept any offer
that is described in Section 2.3.4(c) or that otherwise fails
----------------
to comply with the requirements of this Agreement.
2.3.7. Allocation by Agent. If offers are made by
-------------------
two or more Lenders with the same Eurodollar Bid Rates or Absolute
Rates, as the case may be, for a greater aggregate principal
amount than the amount in respect of which offers are accepted for
the related Interest Period, the principal amount of Competitive
Bid Loans in respect of which such offers are accepted shall be
allocated by the Agent among such Lenders as nearly as possible
(in such multiples, not greater than $1,000,000, as the Agent may
deem appropriate) in proportion to the aggregate principal amount
of such offers; provided, however, that no Lender shall be
-------- -------
allocated a portion of any Competitive Bid Advance which is less
than the minimum amount which such Lender has indicated that it is
willing to accept. Allocations by the Agent of the amounts of
Competitive Bid Loans shall be conclusive in the absence of
manifest error. The Agent shall promptly, but in any event on the
same Business Day, notify each Lender of its receipt of a
Competitive Bid Borrowing Notice and the aggregate principal
amount of such Competitive Bid Advance allocated to each
participating Lender.
2.4. Availability of Funds. Not later than noon (Chicago
---------------------
time) on each Borrowing Date, each Lender (or in the case of a
Competitive Bid Advance, each Lender making a portion of such
Advance) shall make available its Loan or Loans in funds
immediately available in Chicago to the Agent at its address
specified pursuant to Article XIII. The Agent will promptly make
------------
-30-
such funds, in the form received from the Lenders, available to
the Borrower at the Agent's aforesaid address.
2.5. Facility Fee; Reductions in Aggregate Commitment.
------------------------------------------------
(a) The Borrower agrees to pay to the Agent for the
ratable account of each Lender a facility fee at a rate per annum
equal to the Applicable Facility Fee Percentage times such
Lender's Commitment (whether used or unused) from the date hereof
to and including the Facility Termination Date, payable in arrears
on each Payment Date hereafter and on the Facility Termination
Date; provided, that such facility fee shall not accrue with
--------
respect to the Commitment of any Lender during any period in which
such Lender has failed to make any Advance required hereunder.
(b) The Borrower may permanently reduce the Aggregate
Commitment in whole, or in part ratably among the Lenders, in a
minimum amount of $2,000,000 (and in multiples of $250,000 if in
excess thereof), upon at least three Business Days' written notice
to the Agent, which notice shall specify the amount of any such
reduction; provided, however, that the amount of the Aggregate
-------- -------
Commitment may not be reduced below the aggregate principal amount
of the outstanding Advances. All accrued facility fees shall be
payable on the effective date of any termination of the
obligations of the Lenders to make Loans hereunder and no facility
fees shall accrue thereafter.
2.6. Minimum Amount of Each Advance. Each Advance shall be
------------------------------
in the minimum amount of $2,000,000 (and in multiples of $250,000
if in excess thereof); provided, however, that (a) any Floating
-------- -------
Rate Advance may be in the amount of the unused Aggregate
Commitment and (b) in no event shall more than five (5) Eurodollar
Advances be permitted to be outstanding at any time.
2.7. Optional Principal Payments. The Borrower may from
---------------------------
time to time pay, without penalty or premium, all outstanding
Advances (other than Competitive Bid Advances, which may not be
voluntarily prepaid unless a Lender has given notice in respect of
such Competitive Bid Loan that additional material amounts are
payable to such Lender pursuant to Section 2.16(a), 3.1 or 3.2),
--------------- --- ---
or, in a minimum aggregate amount of $2,000,000 or any integral
-31-
multiple of $250,000 in excess thereof, any portion of the
outstanding Advances (other than Competitive Bid Advances) upon
notice to the Agent not later than 11:00 a.m. (Chicago time) on
the date of such payment; provided, that any prepayment of a
--------
Eurodollar Advance prior to the last day of the applicable
Eurodollar Interest Period shall require three Business Days'
prior notice to the Agent and shall be subject to the indemnity
provisions of Section 3.4.
-----------
2.8. Changes in Interest Rate, etc. Each Floating Rate
------------------------------
Advance shall bear interest at the Floating Rate from and
including the date of such Advance or the date on which such
Advance was converted into a Floating Rate Advance to (but not
including) the date on which such Floating Rate Advance is paid or
converted to a Eurodollar Ratable Advance. Changes in the rate of
interest on that portion of any Advance maintained as a Floating
Rate Advance will take effect simultaneously with each change in
the Floating Rate. Each Eurodollar Ratable Advance and Absolute
Rate Advance shall bear interest from and including the first day
of the Interest Period applicable thereto to, but not including,
the last day of such Interest Period at the interest rate
determined as applicable to such Eurodollar Ratable Advance or
Absolute Rate Advance. No Interest Period may end after the
Facility Termination Date.
2.9. Rates Applicable After Default. Notwithstanding
------------------------------
anything to the contrary contained in Section 2.2.3 and 2.2.4, no
------------- -----
Advance may be made as, converted into or continued as a
Eurodollar Ratable Advance (except with the consent of the Agent
and the Required Lenders) when any Default or Unmatured Default
has occurred and is continuing. During the continuance of a
Default the Required Lenders may, at their option, by notice to
the Borrower, declare (which declaration may be revoked at the
option of the Required Lenders notwithstanding any provision of
Section 8.2 requiring unanimous consent of the Lenders to changes
-----------
in interest rates) that each Eurodollar Advance, Absolute Rate
Advance and Floating Rate Advance shall bear interest (for the
remainder of the applicable Interest Period in the case of
Eurodollar Advances and Absolute Rate Advances) at the rate
otherwise applicable plus two percent (2.0%) per annum; provided,
--------
-32-
however, that such increased rate shall automatically and without
-------
action of any kind by the Lenders become and remain applicable in
the event of a Default described in Section 7.6 or 7.7 until
----------- ---
revoked by the Required Lenders.
2.10. Method of Payment. All payments of the Obligations
-----------------
hereunder shall be made, without setoff, deduction or
counterclaim, in immediately available funds to the Agent at the
Agent's address specified pursuant to Article XIII, or at any
------------
other Lending Installation of the Agent specified in writing by
the Agent to the Borrower, by noon (Chicago time) on the date when
due and shall be applied ratably by the Agent among the Lenders.
Each payment delivered to the Agent for the account of any Lender
shall be delivered promptly by the Agent to such Lender in the
same type of funds that the Agent received at its address
specified pursuant to Article XIII or at any Lending Installation
------------
specified in a notice received by the Agent from such Lender. The
Agent is hereby authorized to charge the account of the Borrower
maintained with First Chicago for each payment of principal,
interest and fees as it becomes due hereunder.
2.11. Notes; Telephonic Notices. Each Lender is hereby
-------------------------
authorized to record the principal amount of each of its Loans and
each repayment on the schedule attached to its Note; provided,
--------
however, that neither the failure to so record nor any error in
-------
such recordation shall affect the Borrower's obligations under
such Note. The Borrower hereby authorizes the Lenders and the
Agent to extend, convert or continue Advances, effect selections
of Types of Advances, submit Competitive Bid Quotes and to
transfer funds based on telephonic notices made by any person or
persons the Agent or any Lender in good faith believes to be
acting on behalf of the Borrower. The Borrower agrees to deliver
promptly to the Agent a written confirmation, if such confirmation
is requested by the Agent or any Lender, of each telephonic notice
signed by an Authorized Officer. If the written confirmation
differs in any material respect from the action taken by the Agent
and the Lenders, the records of the Agent and the Lenders shall
govern absent manifest error.
-33-
2.12. Interest Payment Dates; Interest and Fee Basis.
----------------------------------------------
Interest accrued on each Floating Rate Advance shall be payable on
each Payment Date, commencing with the first such date to occur
after the date hereof, on any date on which a Floating Rate
Advance is prepaid, whether due to acceleration or otherwise, and
at maturity. Interest accrued on that portion of the outstanding
principal amount of any Floating Rate Advance converted into a
Eurodollar Ratable Advance on a day other than a Payment Date
shall be payable on the date of conversion. Interest accrued on
each Eurodollar Advance or Absolute Rate Advance shall be payable
on the last day of its applicable Interest Period, on any date on
which the Eurodollar Advance or Absolute Rate Advance is prepaid,
whether by acceleration or otherwise, and at maturity. Interest
accrued on each Eurodollar Advance or Absolute Rate Advance having
an Interest Period longer than three months shall also be payable
on the last day of each three-month interval during such Interest
Period. Facility fees and interest on Floating Rate Advances and
Absolute Rate Advances shall be calculated for actual days elapsed
on the basis of a 365/366-day year. Interest on Eurodollar
Advances shall be calculated for actual days elapsed on the basis
of a 360-day year. Interest shall be payable for the day an
Advance is made but not for the day of any payment on the amount
paid if payment is received prior to noon (Chicago time) at the
place of payment. If any payment of principal of or interest on
an Advance shall become due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time
shall be included in computing interest in connection with such
payment.
2.13. Notification of Advances, Interest Rates, Prepayments
-----------------------------------------------------
and Commitment Reductions. Promptly after receipt thereof, the
-------------------------
Agent will notify each Lender of the contents of each Aggregate
Commitment reduction notice, Ratable Borrowing Notice, Conversion/
Continuation Notice, Invitation for Competitive Quotes and
repayment notice received by it hereunder. The Agent will notify
the Borrower and each Lender of the interest rate applicable to
each Eurodollar Advance promptly upon determination of such
interest rate and will give the Borrower and each Lender prompt
notice of each change in the Floating Rate.
2.14. Lending Installations. Subject to Section 3.5, each
--------------------- -----------
Lender may book its Loans at any Lending Installation selected by
such Lender and may change its Lending Installation from time to
-34-
time. All terms of this Agreement shall apply to any such Lending
Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by
written or telecopy notice to the Agent and the Borrower,
designate a Lending Installation through which Loans will be made
by it and for whose account Loan payments are to be made.
2.15. Non-Receipt of Funds by the Agent. Unless the Borrower
---------------------------------
or a Lender, as the case may be, notifies the Agent prior to the
date on which it is scheduled to make payment to the Agent of (a)
in the case of a Lender, the proceeds of a Loan, or (b) in the
case of the Borrower, a payment of principal, interest or fees to
the Agent for the account of the Lenders, that it does not intend
to make such payment, the Agent may assume that such payment has
been made. The Agent may, but shall not be obligated to, make the
amount of such payment available to the intended recipient in
reliance upon such assumption. If the Borrower has not in fact
made such payment to the Agent, the Lenders shall, on demand by
the Agent, repay to the Agent the amount so made available
together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by
the Agent until the date the Agent recovers such amount at a rate
per annum equal to the Federal Funds Effective Rate for such day.
If any Lender has not in fact made such payment to the Agent, such
Lender or the Borrower shall, on demand by the Agent, repay to the
Agent the amount so made available together with interest thereon
in respect of each day during the period commencing on the date
such amount was so made available by the Agent until the date the
Agent recovers such amount at a rate per annum equal to (a) in the
case of payment by a Lender, the Federal Funds Effective Rate for
such day, or (b) in the case of payment by the Borrower, the
interest rate applicable to the relevant Loan.
2.16. Taxes.
-----
(a) Any payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority,
excluding net income taxes and franchise taxes or any other tax
based upon any income imposed on the Agent or any Lender by the
jurisdiction in which the Agent or such Lender is incorporated or
has its principal place of business. If any such non-excluded
-35-
taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld
------------------
from any amounts payable to the Agent or any Lender hereunder, the
amounts so payable to the Agent or such Lender shall be increased
to the extent necessary to yield to the Agent or such Lender
(after payment of all Non-Excluded Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts
specified in or pursuant to this Agreement; provided, however,
-------- -------
that the Borrower shall not be required to increase any such
amounts payable to any Lender that is not organized under the laws
of the U.S. or a state thereof if such Lender fails to comply with
the requirements of paragraph (b) of this Section 2.16. Whenever
------------
any Non-Excluded Taxes are payable by the Borrower, as promptly as
practicable thereafter the Borrower shall send to the Agent for
its own account or for the account of such Lender, as the case may
be, a certified copy of an original official receipt received by
the Borrower showing payment thereof. If the Borrower fails to
pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify
the Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by any Agent or any Lender as a
result of any such failure. The agreements in this Section 2.16
------------
shall survive the termination of this Agreement and the payment of
all other amounts payable hereunder.
(b) At least five Business Days prior to the first
date on which interest or fees are payable hereunder for the
account of any Lender, each Lender that is not incorporated under
the laws of the United States of America, or a state thereof,
agrees that it will deliver to each of the Borrower and the Agent
two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224, certifying in either case that such
Lender is entitled to receive payments under this Agreement and
the Notes without deduction or withholding of any United States
federal income taxes. Each Lender which so delivers a Form 1001
or 4224 further undertakes to deliver to each of the Borrower and
the Agent two additional copies of such form (or a successor form)
on or before the date that such form expires (currently, three
successive calendar years for Form 1001 and one calendar year for
Form 4224) or becomes obsolete or after the occurrence of any
event requiring a change in the most recent forms so delivered by
it, and such amendments thereto or extensions or renewals thereof
as may be reasonably requested by the Borrower or the Agent, in
-36-
each case certifying that such Lender is entitled to receive
payments under this Agreement and the Notes without deduction or
withholding of any United States federal income taxes, unless an
event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly
completing and delivering any such form with respect to it and
such Lender advises the Borrower and the Agent that it is not
capable of receiving payments without any deduction or withholding
of United States federal income tax.
2.17. Agent's Fees. The Borrower shall pay to the Agent
------------
those fees owing to it in its capacity as Agent, in addition to
the facility fees referenced in Section 2.5(a), in the amounts and
--------------
at the times separately agreed to between the Agent and the
Borrower.
ARTICLE III
CHANGE IN CIRCUMSTANCES
-----------------------
3.1. Yield Protection. If, after the date hereof, the
----------------
adoption of or any change in any law or any governmental or quasi-
governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law), or any interpretation
thereof or the compliance of any Lender therewith,
(a) subjects any Lender or any applicable Lending
Installation to any tax, duty, charge or withholding on or from
payments due from the Borrower (excluding net income taxes and
franchise taxes or any other tax based upon any income of any
Lender or applicable Lending Installation imposed by the
jurisdiction in which such Lender or Lending Installation is
incorporated or has its principal place of business), or changes
the basis of taxation of principal, interest or any other payments
to any Lender or Lending Installation in respect of its Loans or
other amounts due it hereunder, or
(b) imposes or increases or deems applicable any
reserve, assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender or any applicable Lending
-37-
Installation (other than reserves and assessments taken into
account in determining the interest rate applicable to Eurodollar
Advances), or
(c) imposes any other condition the result of which is
to increase the cost to any Lender or any applicable Lending
Installation of making, funding or maintaining Loans or reduces
any amount receivable by any Lender or any applicable Lending
Installation in connection with any Loans, or requires any Lender
or any applicable Lending Installation to make any payment
calculated by reference to the amount of Loans held, or interest
received by it, in each case, by an amount reasonably deemed
material by such Lender,
then, within 15 days of demand by such Lender, the Borrower shall
pay such Lender that portion of such increased expense incurred or
resulting in an amount received which such Lender reasonably
determines is attributable to making, funding and maintaining its
Loans and its Commitment.
3.2. Changes in Capital Adequacy Regulations. If a Lender
---------------------------------------
reasonably determines the amount of capital required or expected
to be maintained by such Lender, any Lending Installation of such
Lender or any corporation controlling such Lender is increased as
a result of a Change, then, within 15 days of demand by such
Lender, the Borrower shall pay such Lender the amount necessary to
compensate for any material shortfall in the rate of return on the
portion of such increased capital which such Lender reasonably
determines is attributable to this Agreement, its Loans or its
obligation to make Loans hereunder (after taking into account such
Lender's policies as to capital adequacy). "Change" means (a) any
------
change after the date of this Agreement in the Risk-Based Capital
Guidelines, or (b) any adoption of or change in any other law,
governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the
force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any
Lender or any Lending Installation or any corporation controlling
any Lender. "Risk-Based Capital Guidelines" means (a) the risk-
-----------------------------
based capital guidelines in effect in the United States on the
date of this Agreement and (b) the corresponding capital
regulations promulgated by regulatory authorities outside the
United States implementing the July 1988 report of the Basle
Committee on Banking Regulation and Supervisory Practices entitled
"International Convergence of Capital Measurements and Capital
-38-
Standards" and any amendments to such regulations adopted prior to
the date of this Agreement.
3.3. Availability of Types of Advances. If (a) any Lender
---------------------------------
determines that maintenance of its Eurodollar Loans at a suitable
Lending Installation would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law,
or (b) the Required Lenders determine that (i) deposits of a type
and maturity appropriate to match fund Eurodollar Advances are not
available, or (ii) the interest rate applicable to a Eurodollar
Advance does not accurately or fairly reflect the cost of making
or maintaining such Eurodollar Advance, then the Agent shall
suspend the availability of the affected Type of Advance until
such circumstance no longer exists and require any such Eurodollar
Advances to be repaid or converted into a Floating Rate Advance at
the option of the Borrower, in each case subject to Section 3.4.
-----------
3.4. Funding Indemnification. If any payment of a
-----------------------
Eurodollar Advance or Absolute Rate Advance occurs on a date which
is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment or otherwise, or a Eurodollar
Advance or Absolute Rate Advance is not made on the date specified
by the Borrower for any reason other than default by the Lenders,
the Borrower will indemnify the Agent and each Lender for any loss
or cost incurred by it resulting therefrom, including, without
limitation, any loss or cost in liquidating or employing deposits
acquired to fund or maintain the Eurodollar Advance or Absolute
Rate Advance.
3.5. Lender Statements; Survival of Indemnity. To the
----------------------------------------
extent reasonably possible, each Lender shall designate an
alternate Lending Installation with respect to its Eurodollar
Advances to minimize any liability of the Borrower to such Lender
under Sections 3.1 and 3.2 or to avoid the unavailability of a
------------ ---
Type of Advance under Section 3.3, so long as such designation is
-----------
not disadvantageous to such Lender. Each Lender shall deliver a
written statement of such Lender to the Borrower (with a copy to
the Agent) as to the amount due, if any, under Section 3.1, 3.2 or
----------- ---
3.4. Such written statement shall set forth in reasonable detail
---
-39-
the calculations upon which such Lender determined such amount and
shall be final, conclusive and binding on the Borrower in the
absence of manifest error. Determination of amounts payable under
such Sections in connection with a Eurodollar Advance shall be
calculated as though each Lender funded its Eurodollar Advances
through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining
the Eurodollar Rate applicable to such Loan, whether in fact that
is the case or not. Unless otherwise provided herein, the amount
specified in the written statement of any Lender shall be payable
on demand after receipt by the Borrower of the written statement.
The obligations of the Borrower under Sections 3.1, 3.2 and 3.4
------------ --- ---
shall survive payment of the Obligations and termination of this
Agreement.
3.6. Substitution of Lenders. Upon the receipt by the
-----------------------
Borrower from any Lender (an "Affected Lender") of a claim for
---------------
compensation under Section 2.16(a), 3.1 or 3.2 or a notice in
--------------- --- ---
accordance with Section 3.3 regarding the unavailability of a Type
-----------
of Advance, the Borrower may: (a) request the Affected Lender to
use its best efforts to obtain a replacement bank or financial
institution satisfactory to the Borrower to acquire and assume all
or a ratable part of all of such Affected Lender's Loans and
Commitment at the face amount thereof (a "Replacement Lender");
------------------
(b) request one or more of the other Lenders to acquire and assume
all or part of such Affected Lender's Loans and Commitment (which
request each such other Lender may decline or agree to in its sole
discretion); or (c) designate a Replacement Lender. Any such
designation of a Replacement Lender under clause (a) or (c) shall
be subject to the prior written consent of the Agent (which
consent shall not unreasonably be withheld). Any transfer of
Loans or Commitment pursuant to this Section shall be made in
accordance with Section 12.3 and Section 3.4, if applicable.
------------ -----------
3.7. Survival. The agreements and obligations of the
--------
Borrower in Section 2.16(a) and this Article III shall survive the
--------------- -----------
payment of all other Obligations, and the Borrower will have no
-40-
obligation to pay any amount pursuant to Section 2.16(a), 3.1, or
--------------- ---
3.2 if a demand is not made within 180 days of the date on which
---
the Lender's right to reimbursement arises.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
4.1. Initial Loans. The Lenders shall not be required to
-------------
make the initial Advance hereunder unless the Borrower has
furnished the following to the Agent with one copy for each of the
Lenders and the other conditions set forth below have been
satisfied, in each case on or before October 30, 1996.
(a) Charter Documents; Good Standing Certificates.
---------------------------------------------
Copies of the certificate of incorporation of the Borrower,
together with all amendments thereto, both certified by the
appropriate governmental officer in its jurisdiction of
incorporation, together with a good standing certificate issued by
the Secretary of State of Delaware and the Secretary of State of
California.
(b) By-Laws and Resolutions. Copies, certified by the
-----------------------
Secretary or Assistant Secretary of the Borrower, of its by-laws
and of its Board of Directors' resolutions authorizing the
execution, delivery and performance of the Loan Documents to which
the Borrower is a party.
(c) Secretary's Certificate. An incumbency
-----------------------
certificate, executed by the Secretary or Assistant Secretary of
the Borrower, which shall identify by name and title and bear the
signature of the officers of the Borrower authorized to sign the
Loan Documents and to make borrowings hereunder, upon which
certificate the Agent and the Lenders shall be entitled to rely
until informed of any change in writing by the Borrower.
(d) Officer's Certificate. A certificate, dated the
---------------------
date of this Agreement, signed by an Authorized Officer of the
Borrower, in form and substance satisfactory to the Agent, to the
-41-
effect that: (i) on such date (both before and after giving
effect to the consummation of the transactions contemplated hereby
(collectively, the "Closing Transactions")) no Default or
--------------------
Unmatured Default has occurred and is continuing; (ii) no
injunction or temporary restraining order which would prohibit the
making of the Loans or the consummation of any of the Closing
Transactions, or other litigation which could reasonably be
expected to have a Material Adverse Effect is pending or, to the
best of such Person's knowledge, threatened; (iii) all orders,
consents, approvals, licenses, authorizations, or validations of,
or filings, recordings or registrations with, or exemptions by,
any governmental or public body or authority, or any subdivision
thereof, required to make or consummate the Closing Transactions
have been or, prior to the time required, will have been,
obtained, given, filed or taken and are or will be in full force
and effect (or the Borrower has obtained effective judicial relief
with respect to the application thereof) and all applicable
waiting periods have expired; (iv) neither the Borrower nor any
Subsidiary has failed to perform any material obligation or
covenant required in connection with any Closing Transaction to be
performed or complied with by it on or before such date; (v) each
of the representations and warranties set forth in Article V of
---------
this Agreement is true and correct on and as of such date; and
(viii) since December 31, 1995 no event or change has occurred
that has caused or evidences a Material Adverse Effect.
(e) Legal Opinions. Written opinions of ▇▇▇▇▇▇▇
--------------
Leisure ▇▇▇▇▇▇ & Irvine, counsel for the Borrower, addressed to
the Agent and the Lenders in form and substance acceptable to the
Agent and its counsel.
(f) Notes. Notes payable to the order of each of the
-----
Lenders duly executed by the Borrower.
(g) Loan Documents. Executed originals of the
--------------
Agreement, together with all schedules, exhibits, certificates,
instruments, opinions, documents and financial statements required
to be delivered pursuant hereto and thereto.
(h) Letters of Direction. Written money transfer
--------------------
instructions with respect to the Advances in form and substance
acceptable to the Agent and its counsel addressed to the Agent and
-42-
signed by an Authorized Officer, together with such other related
money transfer authorizations as the Agent may have reasonably
requested.
(i) Solvency Certificate. A written solvency
--------------------
certificate from the chief financial officer of the Borrower in
form and content satisfactory to the Agent, dated the date of this
Agreement, with respect to the value, Solvency and other factual
information of, or relating to, as the case may be, the Borrower
and the Borrower and its Subsidiaries, taken as a whole, both
before and after giving effect to the Closing Transactions.
(j) Accountant's Letter. A signed letter from KPMG
-------------------
Peat Marwick LLP in form and substance satisfactory to the Agent
acknowledging that the Lenders may rely on audited financial
statements audited by such firm.
(k) Regulatory Matters. Receipt of any required
------------------
regulatory approvals from any Governmental Authority with respect
to the transactions contemplated by the Loan Documents.
(l) Insurance Subsidiaries. A certificate of
----------------------
compliance issued by the insurance department of the state of
domicile of each Insurance Subsidiary (and with respect to URC,
the State of California) and such other jurisdictions as shall be
requested by the Agent.
(m) Other. Such other documents as the Agent, any
-----
Lender or their counsel may have reasonably requested.
4.2. Each Future Advance. The Lenders shall not be required
-------------------
to make any Advance unless on the applicable Borrowing Date:
(a) There exists no Default or Unmatured Default and
none would result from such Advance;
(b) The representations and warranties contained in
Article V are true and correct in all material respects as of such
---------
Borrowing Date;
-43-
(c) A Borrowing Notice shall have been properly
submitted; and
(d) All legal matters incident to the making of such
Advance shall be reasonably satisfactory to the Lenders and their
counsel.
Each Ratable Borrowing Notice and Competitive Bid Quote
Request with respect to each such Advance shall constitute a
representation and warranty by the Borrower that the conditions
contained in Section 4.2 have been satisfied. Any Lender may
-----------
require a duly completed compliance certificate in substantially
the form of Exhibit F hereto as a condition to making an Advance.
---------
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower represents and warrants to the Lenders that,
both before and after giving effect to the Closing Transactions:
5.1. Corporate Existence and Standing. Each of the Borrower
--------------------------------
and each Subsidiary is a corporation duly incorporated, validly
existing and in good standing under the laws of its respective
jurisdiction of incorporation and is duly qualified to conduct
business as a foreign corporation in each jurisdiction in which
such qualification is required, except where the failure to be so
qualified could not reasonably be expected to have a Material
Adverse Effect.
5.2. Authorization and Validity. The Borrower has all
--------------------------
requisite corporate power and authority and legal right to execute
and deliver (or file, as the case may be) each of the Loan
Documents and to perform its obligations thereunder. The
execution and delivery (or filing, as the case may be) by the
Borrower of the Loan Documents and the performance of its
obligations thereunder have been duly authorized by proper
corporate proceedings and the Loan Documents constitute legal,
valid and binding obligations of the Borrower enforceable against
the Borrower in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws
-44-
affecting the enforcement of creditors' rights generally or by
general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or equity).
5.3. Compliance with Laws and Contracts. The Borrower and
----------------------------------
its Subsidiaries have complied in all material respects with all
applicable statutes, rules, regulations, orders and restrictions
of any domestic or foreign government or any instrumentality or
agency thereof, having jurisdiction over the conduct of their
respective businesses or the ownership of their respective
properties, except where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect. Neither
the execution and delivery by the Borrower of the Loan Documents,
the application of the proceeds of the Loans, the consummation of
the Closing Transactions nor compliance with the provisions of the
Loan Documents will, or at the relevant time did, (a) violate any
law, rule, regulation (including Regulations G, T, U and X),
order, writ, judgment, injunction, decree or award binding on the
Borrower or any Subsidiary or the Borrower's or any Subsidiary's
charter, articles or certificate of incorporation or by-laws, (b)
violate the provisions of or require the approval or consent of
any party to any indenture, instrument or agreement to which the
Borrower or any Subsidiary is a party or is subject, or by which
it, or its property, is bound, or conflict with or constitute a
default thereunder, or result in the creation or imposition of any
Lien (other than Liens permitted by the Loan Documents) in, of or
on the property of the Borrower or any Subsidiary pursuant to the
terms of any such indenture, instrument or agreement, or (c)
require any consent of the stockholders of any Person, except for
approvals or consents which will be obtained on or before the
initial Advance and are disclosed on Schedule 5.3, except for any
------------
violation of, or failure to obtain an approval or consent required
under, any such law, rule, regulation, order, writ, judgment,
injunction, decree, award, indenture, instrument or agreement that
could not reasonably be expected to have a Material Adverse
Effect.
5.4. Governmental Consents. Except as set forth in Schedule
--------------------- --------
5.4 hereto, no order, consent, approval, qualification, license,
---
authorization, or validation of, or filing, recording or
registration with, or exemption by, or other action in respect of,
a Governmental Authority, or any subdivision thereof, any
securities exchange or any other Person is or at the relevant time
was required to authorize, or is or at the relevant time was
-45-
required in connection with the execution, delivery, consummation
or performance of, or the legality, validity, binding effect or
enforceability of, any of the Loan Documents the application of
the proceeds of the Loans or the consummation of any transaction
contemplated in the Loan Documents.
5.5. Financial Statements. The Borrower has heretofore
--------------------
furnished to each of the Lenders (a) the December 31, 1995 audited
consolidated financial statements of the Borrower and its
Subsidiaries, (b) the unaudited consolidated financial statements
of the Borrower and its Subsidiaries through June 30, 1996, (c)
the December 31, 1995 audited Annual Statement of each Insurance
Subsidiary and (d) the June 30, 1996 Quarterly Statement of each
Insurance Subsidiary (collectively, the "Financial Statements").
--------------------
Each of the Financial Statements was prepared in accordance with
generally accepted accounting principles or SAP, as applicable,
and, together with the related notes, fairly presents the
consolidated financial condition and operations of the Borrower
and its Subsidiaries, or such Insurance Subsidiary, as applicable,
at such dates and the consolidated results of their operations for
the respective periods then ended (except, in the case of such
unaudited statements, for normal year-end audit adjustments).
5.6. Material Adverse Change. No material adverse change in
-----------------------
the business, Property, condition (financial or otherwise),
performance, prospects or operations of the Borrower and its
Subsidiaries, taken as a whole, has occurred since December 31,
1995.
5.7. Taxes. Except as set forth in Schedule 5.7 hereto, the
----- ------------
Borrower and its Subsidiaries have filed or caused to be filed on
a timely basis and in correct form all United States federal and
applicable state tax returns and all other material tax returns
which are required to be filed by it, each of Alleghany and each
other Consolidated Person has filed or caused to be filed all
United States federal and material applicable state tax returns
which are required to be filed by it on a consolidated or combined
basis and which include the Borrower or any Subsidiary, and each
of the Borrower, the Subsidiaries, Alleghany and each other
Consolidated Person has paid all taxes due pursuant to said
returns or pursuant to any assessment received by such person,
except, in each case, such taxes, if any, as are being contested
in good faith and as to which adequate reserves have been provided
in accordance with Agreement Accounting Principles or SAP, as
-46-
applicable, and as to which no Lien exists. From and after
October 7, 1993, each of the Borrower and each Subsidiary has
joined in the filing of a consolidated federal income tax return
with Alleghany. No tax liens have been filed and no claims are
being asserted with respect to any taxes for which any
Consolidated Person may be liable which could reasonably be
expected to have a Material Adverse Effect. The charges, accruals
and reserves (a) on the books of the Borrower and its Subsidiaries
in respect of any taxes or other governmental charges and (b) on
the books of Alleghany and such other Consolidated Person in
respect of any taxes or other governmental charges owing with
respect to any tax year beginning after December 31, 1992 are in
accordance with Agreement Accounting Principles or SAP, as
applicable.
5.8. Litigation. There is no litigation, arbitration,
----------
proceeding, inquiry or governmental investigation pending or, to
the knowledge of any of their officers, threatened against or
affecting the Borrower or any Subsidiary or any of their
respective properties which could reasonably be expected to have a
Material Adverse Effect or to prevent, enjoin or unduly delay the
making of the Loans under this Agreement or the consummation of
any other Closing Transaction.
5.9. Capitalization. Schedule 5.9 hereto contains (a) an
-------------- ------------
accurate description of the Borrower's capitalization as of
September 30, 1996 after giving effect to the Closing Transactions
and (b) an accurate list of all of the existing Subsidiaries as of
the date of this Agreement, setting forth their respective
jurisdictions of incorporation and the percentage of their capital
stock owned by the Borrower or other Subsidiaries. All of the
issued and outstanding shares of capital stock of the Borrower and
of each Subsidiary have been duly authorized and validly issued,
are fully paid and non-assessable, and are free and clear of all
Liens. Except as set forth on Schedule 5.9, no authorized but
------------
unissued or treasury shares of capital stock of the Borrower or
any Subsidiary are subject to any option, warrant, right to call
or commitment of any kind or character. Except as set forth on
Schedule 5.9, neither the Borrower nor any Subsidiary has any
------------
outstanding stock or securities convertible into or exchangeable
for any shares of its capital stock, or any right issued to any
Person (either preemptive or other) 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
-47-
calls, commitments or claims of any character relating to any of
its capital stock or any stock or securities convertible into or
exchangeable for any of its capital stock other than as expressly
set forth in the certificate or articles of incorporation of the
Borrower or such Subsidiary. Neither the Borrower nor any
Subsidiary is subject to any obligation (contingent or otherwise)
to repurchase or otherwise acquire or retire any shares of its
capital stock or any convertible securities, rights or options of
the type described in the preceding sentence except as otherwise
set forth on Schedule 5.9. Except as set forth on Schedule 5.9,
------------ ------------
as of the date hereof the Borrower does not own or hold, directly
or indirectly, any capital stock or equity security of, or any
equity or partnership interest in any Person other than such
Subsidiaries.
5.10. ERISA. The Unfunded Liabilities of all Single Employer
-----
Plans maintained by the Borrower or any of its Subsidiaries do not
in the aggregate exceed $1,000,000 and the Unfunded Liabilities of
all Single Employer Plans maintained by the other members of the
Controlled Group do not in the aggregate exceed an amount which
could reasonably be expected to have a Material Adverse Effect.
Except as set forth on Schedule 5.10, neither the Borrower nor any
-------------
other member of the Controlled Group maintains, or is obligated to
contribute to, any Multiemployer Plan. Each Plan complies in all
material respects with all applicable requirements of law and
regulations, no Reportable Event has occurred with respect to any
Plan maintained by the Borrower or any of its Subsidiaries, no
Reportable Event has occurred with respect to any Plan maintained
by any other member of the Controlled Group that could reasonably
be expected to have a Material Adverse Effect, neither the
Borrower nor any Subsidiary has withdrawn from any Multiemployer
Plan or initiated steps to do so, no other member of the
Controlled Group has withdrawn from any Multiemployer Plan
resulting in any withdrawal liability that could reasonably be
expected to have a Material Adverse Effect or initiated steps to
do so, and no steps have been taken to reorganize or terminate any
Plan by any member of the Controlled Group or, to the Borrower's
knowledge, by any other Person.
5.11. Defaults. No Default or Unmatured Default has occurred
--------
and is continuing.
-48-
5.12. Federal Reserve Regulations. Neither the Borrower nor
---------------------------
any Subsidiary is engaged, directly or indirectly, principally, or
as one of its important activities, in the business of extending,
or arranging for the extension of, credit for the purpose of
purchasing or carrying Margin Stock. No part of the proceeds of
any Loan will be used in a manner which would violate, or result
in a violation of, Regulation G, Regulation T, Regulation U or
Regulation X. Neither the making of any Advance hereunder nor the
use of the proceeds thereof will violate or conflict with the
provisions of Regulation G, Regulation T, Regulation U or
Regulation X. Following the application of the proceeds of the
Loans, less than 25% of the value (as determined by any reasonable
method) of the assets of the Borrower and its Subsidiaries which
are subject to any limitation on sale, pledge, or other
restriction hereunder taken as a whole have been, and will
continue to be, represented by Margin Stock.
5.13. Investment Company; Public Utility Holding Company Act.
------------------------------------------------------
Neither the Borrower nor any Subsidiary is, or after giving effect
to any Advance will be, an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended. Neither the Borrower
nor any Subsidiary is a "holding company" or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company",
within the meaning of the Public Utility Holding Company Act of
1935, as amended.
5.14. Certain Fees. No broker's or finder's fee or
------------
commission was, is or will be payable by the Borrower or any
Subsidiary with respect to any of the transactions contemplated by
this Agreement. The Borrower hereby agrees to indemnify the Agent
and the Lenders against and agrees that it will hold each of them
harmless from any claim, demand or liability for broker's or
finder's fees or commissions alleged to have been incurred by the
Borrower in connection with any of the transactions contemplated
by this Agreement and any expenses (including, without limitation,
attorneys' fees and time charges of attorneys for the Agent or any
Lender, which attorneys may be employees of the Agent or any
Lender) arising in connection with any such claim, demand or
liability. No other similar fee or commissions will be payable by
the Borrower or any Subsidiary for any other services rendered to
the Borrower or any Subsidiary ancillary to any of the
transactions contemplated by this Agreement.
-49-
5.15. Solvency. As of the date hereof, before and after
--------
giving effect to the consummation of the transactions contemplated
by the Loan Documents and the payment of all fees, costs and
expenses payable by the Borrower or its Subsidiaries with respect
to the transactions contemplated by the Loan Documents, the
Borrower (individually and on a consolidated basis) is Solvent.
5.16. Ownership of Properties. Except as set forth on
-----------------------
Schedule 5.16 hereto, the Borrower and its Subsidiaries own, free
-------------
of all Liens, other than those permitted by Section 6.16 or by any
------------
of the other Loan Documents, all of the properties and assets
reflected in the Financial Statements as being owned by it, except
for assets sold, transferred or otherwise disposed of in the
ordinary course of business since the date thereof. To the
knowledge of the Borrower, there are no actual, threatened or
alleged defaults with respect to any leases of real property under
which the Borrower or any Subsidiary is lessee or lessor which
could reasonably be expected to have a Material Adverse Effect.
The Borrower and its Subsidiaries own or possess rights to use all
licenses, patents, patent applications, copyrights, service marks,
trademarks and trade names necessary to continue to conduct their
business as heretofore conducted, and no such license, patent or
trademark has been declared invalid, been limited by order of any
court or by agreement or is the subject of any infringement,
interference or similar proceeding or challenge, except for
proceedings and challenges which could not reasonably be expected
to have a Material Adverse Effect.
5.17. Indebtedness. Attached hereto as Schedule 5.17 is a
------------ -------------
complete and correct list of all Indebtedness of the Borrower and
its Subsidiaries outstanding on the date of this Agreement (other
than Indebtedness in a principal amount not exceeding $1,000,000
for a single item of Indebtedness and $5,000,000 in the aggregate
for all such Indebtedness), showing the aggregate principal amount
which was outstanding on such date after giving effect to the
Closing Transactions. The Borrower has delivered or caused to be
delivered to the Lenders a true and complete copy of each
instrument evidencing Indebtedness in a principal amount of
$5,000,000 or more and of each document pursuant to which any of
such Indebtedness was issued.
-50-
5.18. Material Agreements. Neither the Borrower nor any
-------------------
Subsidiary is a party to any agreement or instrument or subject to
any charter, bylaw or other restriction set forth in a similar
governing document which could reasonably be expected to have a
Material Adverse Effect or which restricts or imposes conditions
upon the ability of any Subsidiary to (a) pay dividends or make
other distributions on its capital stock, (b) make loans or
advances to the Borrower or (c) repay loans or advances from the
Borrower. Neither the Borrower nor any Subsidiary is in default
in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement to
which it is a party, which default could reasonably be expected to
have a Material Adverse Effect.
5.19. Environmental Laws. There are no claims,
------------------
investigations, litigation, administrative proceedings, notices,
requests for information (each a "Proceeding"), whether pending
----------
or, to the Borrower's knowledge, threatened, or judgments or
orders asserting violations of applicable federal, state and local
environmental, health and safety statutes, regulations,
ordinances, codes, rules, orders, decrees, directives and
standards ("Environmental Laws") or relating to any toxic or
------------------
hazardous waste, substance or chemical or any pollutant,
contaminant, chemical or other substance defined or regulated
pursuant to any Environmental Law, including, without limitation,
asbestos, petroleum, crude oil or any fraction thereof ("Hazardous
---------
Materials") asserted against the Borrower or any of its
---------
Subsidiaries which, in any case, could reasonably be expected to
have a Material Adverse Effect. As of the date hereof, there are
no such Proceedings pending, or to the Borrower's knowledge
threatened, except as disclosed on Schedule 5.19. The Borrower
-------------
and each of its Subsidiaries have obtained and are in compliance
in all material respects with all permits, certificates, licenses,
approvals and other authorizations ("Environmental Permits")
---------------------
required for the operation of their business and have filed all
required notifications or reports relating, in each case, to
chemical substances, air emissions, effluent discharges and the
storage, treatment, transport and disposal of Hazardous Materials.
As of the date hereof, the Borrower and its Subsidiaries do not
have liabilities exceeding $100,000 in the aggregate for all of
-51-
them with respect to compliance with applicable Environmental Laws
and Environmental Permits or related to the generation, treatment,
storage, disposal, release, investigation or cleanup of Hazardous
Materials, and, to the knowledge of the Borrower, no facts or
circumstances exist which could give rise to such liabilities with
respect to compliance with applicable Environmental Laws and
Environmental Permits and the generation, treatment, storage,
disposal, release, investigation or cleanup of Hazardous
Materials.
5.20. Insurance. The Borrower and its Subsidiaries maintain
---------
insurance on their Property with such companies, in such amounts
and covering such risks as is, in each case, consistent with sound
business practice.
5.21. Insurance Licenses. No License, the loss of which
------------------
could reasonably be expected to have a Material Adverse Effect, is
the subject of a proceeding for suspension or revocation. To the
Borrower's knowledge, there is no sustainable basis for such
suspension or revocation, and no such suspension or revocation has
been threatened by any Governmental Authority. No Insurance
Subsidiary has received written notice from any Governmental
Authority that it is deemed to be "commercially domiciled" for
insurance regulatory purposes in any jurisdiction other than that
indicated on Schedule 5.21. Schedule 5.21 also indicates the line
------------- -------------
or lines of insurance in which each Insurance Subsidiary is
engaged and the state or states in which such Insurance Subsidiary
is licensed to engage in any line of insurance, in each case as of
the date of this Agreement.
5.22. Reserves. Each reserve and other liability amount in
--------
respect of the insurance business, including, without limitation,
reserve and other liability amounts in respect of insurance
policies, established or reflected in the SAP Financial Statements
for the year ended December 31, 1995 of each Insurance Subsidiary,
was determined in accordance with generally accepted actuarial
standards consistently applied, was fairly stated in accordance
with sound actuarial principles and was in compliance with the
requirements of the insurance laws, rules and regulations of its
state of domicile as of the date thereof. Each Insurance
Subsidiary owns assets that qualify as admitted assets under
applicable law in an amount at least equal to the sum of all such
reserves and liability amounts and its minimum statutory capital
-52-
and surplus as required by the insurance laws, rules and
regulations of its state of domicile.
5.23. Disclosure. None of the (a) information, exhibits or
----------
reports furnished by or on behalf of the Borrower to the Agent or
to any Lender in connection with the negotiation of the Loan
Documents, or (b) representations or warranties of the Borrower
contained in this Agreement, the other Loan Documents or any other
document, certificate or written statement furnished to the Agent
or the Lenders by or on behalf of the Borrower for use in
connection with the transactions contemplated by this Agreement
contained, contains or will contain any untrue statement of a
material fact or omitted, omits or will omit to state a material
fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the
same were made and on the date as of which the same were made;
provided, that this Section 5.23 shall not apply to any plan,
-------- ------------
forecast, projection or pro forma financial information contained
in such materials that is based upon good faith estimates and
assumptions believed to be reasonable at the time made. The pro
forma financial information contained in such materials is based
upon good faith estimates and assumptions believed by the Borrower
to be reasonable at the time made. There is no fact known to the
Borrower (other than matters of a general economic or political
nature) that has had since December 31, 1995 or could reasonably
be expected to have a Material Adverse Effect and that has not
been disclosed herein or in such other documents, certificates and
statements furnished to the Lenders for use in connection with the
transactions contemplated by this Agreement.
ARTICLE VI
COVENANTS
---------
During the term of this Agreement, unless the Required
Lenders shall otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for
-------------------
itself and each Subsidiary, a system of accounting established and
administered in accordance with generally accepted accounting
principles, consistently applied, and furnish to the Lenders:
-53-
(a) As soon as practicable and in any event within 90
days after the close of each of its Fiscal Years, an unqualified
(except for qualifications relating to changes in accounting
principles or practices reflecting changes in generally accepted
accounting principles and required or approved by the Borrower's
independent certified public accountants) audit report certified
by independent certified public accountants, acceptable to the
Lenders, prepared in accordance with Agreement Accounting
Principles on a consolidated and consolidating basis
(consolidating statements need not be certified by such
accountants) for itself and its Subsidiaries, including balance
sheets as of the end of such period and related statements of
income, retained earnings and cash flows accompanied by (i) any
control letter prepared by said accountants addressed to the audit
committee of the Borrower's board of directors, (ii) a certificate
of said accountants that, in the course of the examination
necessary for their certification of the foregoing, they have
obtained no knowledge of any Default or Unmatured Default, or if,
in the opinion of such accountants, any Default or Unmatured
Default shall exist, stating the nature and status thereof, and
(iii) a letter from said accountants addressed to the Lenders
acknowledging that the Lenders are extending credit in primary
reliance on such financial statements and authorizing such
reliance.
(b) As soon as practicable and in any event within 45
days after the close of the first three Fiscal Quarters of each of
its Fiscal Years, for itself and its Subsidiaries, consolidated
and consolidating unaudited balance sheets as at the close of each
such period and consolidated and consolidating statements of
income, retained earnings and cash flows for the period from the
beginning of such Fiscal Year to the end of such quarter, all
certified by its chief financial officer.
(c) (i) Upon the earlier of (A) fifteen days after
the regulatory filing date or (B) 75 days after the close of each
Fiscal Year of each Insurance Subsidiary, copies of the unaudited
Annual Statement of such Insurance Subsidiary, certified by the
chief financial officer of such Insurance Subsidiary, all such
statements to be prepared in accordance with SAP and (ii) no later
than each June 15, copies of such Annual Statements audited and
certified by independent certified public accountants of
recognized annual standing.
(d) Upon the earlier of (i) ten (10) days after the
regulatory filing date or (ii) 60 days after the close of each of
the first three Fiscal Quarters of each Fiscal Year of each
Insurance Subsidiary, copies of the Quarterly Statement of each of
-54-
the Insurance Subsidiaries, certified by the chief financial
officer of such Insurance Subsidiary, all such statements to be
prepared in accordance with SAP.
(e) Promptly and in any event within ten days after
(i) learning thereof, notification of any changes after the date
hereof in the rating given by (A) A.M. Best & Co. or S&P in
respect of any Insurance Subsidiary or (B) S&P or ▇▇▇▇▇'▇ in
respect of the senior Indebtedness of the Borrower and (ii)
receipt thereof, copies of any ratings analysis by (A) A.M. Best &
Co. or S&P relating to any Insurance Subsidiary or (B) S&P or
▇▇▇▇▇'▇ in respect of the senior Indebtedness of the Borrower.
(f) Copies of any actuarial certificates prepared with
respect to any Insurance Subsidiary by an employee of or an
actuary engaged by such Insurance Subsidiary, promptly after the
receipt thereof.
(g) As soon as available, but in any event not later
than the last Business Day in February of each year, a copy of the
plan and forecast (including a projected consolidated and
consolidating balance sheet, income statement and funds flow
statement) of the Borrower and its Subsidiaries for such Fiscal
Year.
(h) Together with the financial statements required by
clauses (a) and (b) above, a compliance certificate in
substantially the form of Exhibit F hereto signed by its chief
---------
financial officer showing the calculations necessary to determine
compliance with this Agreement and stating that no Default or
Unmatured Default exists, or if any Default or Unmatured Default
exists, stating the nature and status thereof.
(i) Within 270 days after the close of each Fiscal
Year, a statement of the Unfunded Liabilities of each Single
Employer Plan, if any, certified as correct by an actuary enrolled
under ERISA.
(j) As soon as possible and in any event within 10
days after the Borrower knows that any Termination Event has
occurred with respect to any Plan, a statement, signed by the
chief financial officer of the Borrower, describing said
Termination Event and the action which the Borrower proposes to
take with respect thereto and as soon as possible and in any event
within ten (10) days after learning thereof, notification of any
lien imposed by the PBGC or the IRS on the assets of any member of
the Controlled Group in respect of any Plan maintained by any such
-55-
member (or any other employee pension benefit plan as to which any
such member may be liable) which relates to liabilities in excess
of ten percent of the net worth (determined according to generally
accepted accounting principles and without reduction for any
reserve for such liabilities) of Alleghany and its Subsidiaries.
(k) As soon as possible and in any event within 10
days after receipt by the Borrower, a copy of (i) any notice,
claim, complaint or order to the effect that the Borrower or any
of its Subsidiaries is or may be liable to any Person as a result
of the release by the Borrower, any of its Subsidiaries, or any
other Person of any Hazardous Materials into the environment or
requiring that action be taken to respond to or clean up a Release
of Hazardous Materials into the environment, and (ii) any notice,
complaint or citation alleging any violation of any Environmental
Law or Environmental Permit by the Borrower or any of its
Subsidiaries. Within ten days of the Borrower or any Subsidiary
having knowledge of the proposal, enactment or promulgation of any
Environmental Law which could reasonably be expected to have a
Material Adverse Effect, the Borrower shall provide the Agent with
written notice thereof.
(l) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other
regular reports which the Borrower or any of its Subsidiaries
files with the NAIC or any insurance commission or department or
analogous Governmental Authority (including without limitation,
any filing made by the Borrower or any Subsidiary pursuant to any
insurance holding company act or related rules or regulations),
but excluding routine or non-material filings with the NAIC, any
insurance commissioner or department or analogous Governmental
Authority.
(m) Promptly and in any event within ten (10) days
after learning thereof, notification of (i) any tax assessment,
demand, notice of proposed deficiency or notice of deficiency
received by the Borrower or any other Consolidated Person or (ii)
the filing of any tax Lien or commencement of any judicial
proceeding by or against any such Consolidated Person, if any such
assessment, demand, notice, Lien or judicial proceeding relates to
tax liabilities in excess of ten percent (10%) of the net worth
(determined according to generally accepted accounting standards
and without reduction for any reserve for such liabilities) of
Alleghany and its Subsidiaries taken as a whole.
(n) Such other information (including, without
limitation, the annual Best's Advance Report Service report
prepared with respect to each Insurance Subsidiary rated by A.M.
-56-
Best & Co.) as the Agent or any Lender may from time to time
reasonably request.
6.2. Use of Proceeds. The Borrower will, and will cause
---------------
each Subsidiary to, use the proceeds of the Advances to meet the
general corporate needs of the Borrower and its Subsidiaries. The
Borrower will not, nor will it permit any Subsidiary to, use any
of the proceeds of the Advances to purchase or carry any Margin
Stock or to finance the Purchase of any Person which has not been
approved and recommended by the board of directors (or functional
equivalent thereof) of such Person.
6.3. Notice of Default. The Borrower will, and will cause
-----------------
each Subsidiary to, give prompt notice in writing to the Lenders
of (a) the occurrence of any Default or Unmatured Default, (b) the
occurrence of any other development, financial or other, relating
specifically to the Borrower or any of its Subsidiaries (and not
of a general economic or political nature) which could reasonably
be expected to have a Material Adverse Effect, (c) the receipt of
any notice from any Governmental Authority of the expiration
without renewal, revocation or suspension of, or the institution
of any proceedings to revoke or suspend, any License now or
hereafter held by any Insurance Subsidiary which is required to
conduct insurance business in compliance with all applicable laws
and regulations and the expiration, revocation or suspension of
which could reasonably be expected to have a Material Adverse
Effect, (d) the receipt of any notice from any Governmental
Authority of the institution of any disciplinary proceedings
against or in respect of any Insurance Subsidiary, or the issuance
of any order, the taking of any action or any request for an
extraordinary audit for cause by any Governmental Authority which,
if adversely determined, could reasonably be expected to have a
Material Adverse Effect, (e) any judicial or administrative order
limiting or controlling the insurance business of any Insurance
Subsidiary (and not the insurance industry generally) which has
been issued or adopted and which has had, or could reasonably be
expected to have, a Material Adverse Effect, or (f) the
commencement of any litigation which could reasonably be expected
to create a Material Adverse Effect.
6.4. Conduct of Business. The Borrower will, and will cause
-------------------
each Subsidiary to, (a) carry on and conduct its business only in
substantially the same manner as it is presently conducted, (b)
(i) with respect to the Borrower, only engage in the business of a
holding company owning entities engaged in the business of
-57-
insurance or reasonably incidental activities, (ii) with respect
to each Insurance Subsidiary, only engage in the insurance
business in which it is engaged or licensed as of the date hereof,
if it is an Insurance Subsidiary as of such date, or as of the
date of its Purchase, if hereafter acquired, or only engage in the
insurance business for which it is formed, if hereafter formed,
and (iii) with respect to each other Subsidiary, only engage in
the business in which it is engaged as of the date hereof, if it
is a Subsidiary as of such date, or as of the date of its Purchase
if hereafter acquired, or only engage in the business for which it
is formed, if hereafter formed, (c) do all things necessary to
remain duly incorporated, validly existing and in good standing in
its jurisdiction of incorporation and its jurisdiction of domicile
and maintain all requisite qualification to conduct business in
each other jurisdiction in which such qualification is required,
except where the failure to maintain such qualification could not
reasonably be expected to have a Material Adverse Effect, and (d)
do all things necessary to renew, extend and continue in effect
all Licenses which may at any time and from time to time be
necessary for any Insurance Subsidiary to operate its insurance
business in compliance with all applicable laws and regulations;
provided, that (i) any Insurance Subsidiary may withdraw from one
--------
or more states (other than its state of domicile) as an admitted
insurer if such withdrawal is determined by the board of directors
or management of such Insurance Subsidiary to be in the best
interest of such Insurance Subsidiary and could not reasonably be
expected to have a Material Adverse Effect and (ii) any Subsidiary
that is not actively engaged in business may be dissolved, if such
dissolution is determined by the Borrower's board of directors to
be in the best interest of the Borrower and could not reasonably
be expected to have a Material Adverse Effect. No Insurance
Subsidiary shall change its state of domicile or incorporation
without the prior written consent of the Required Lenders. Each
Wholly Owned Subsidiary in existence as of the date of this
Agreement shall continue to be a Wholly Owned Subsidiary except as
permitted by Section 6.12.
------------
6.5. Taxes. The Borrower will, and will cause each
-----
Subsidiary to, timely file United States federal and applicable
foreign, state and local tax returns required to be filed by it
that are true and correct in all material respects, and each of
the Borrower, the Subsidiaries, Alleghany and each other
Consolidated Person will pay when due all taxes, assessments and
governmental charges and levies upon it or its income, profits or
Property, except, in each case, those which are being contested in
-58-
good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside in accordance with generally
accepted accounting principles or SAP, as applicable.
6.6. Insurance. The Borrower will, and will cause each
---------
Subsidiary to, maintain, insurance on all their Property with
companies, in such amounts and covering such risks as is, in each
case, consistent with sound business practice, and the Borrower
will furnish to the Agent and any Lender upon request full
information as to the insurance carried.
6.7. Compliance with Laws. The Borrower will, and will
--------------------
cause each Subsidiary to, comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject, the failure to comply with
which could reasonably be expected to have a Material Adverse
Effect.
6.8. Maintenance of Properties. The Borrower will, and will
-------------------------
cause each Subsidiary to, do all things necessary to maintain,
preserve, protect and keep its Property in good repair, working
order and condition, except for ordinary wear and tear, and make
all necessary and proper repairs, renewals and replacements so
that its business carried on in connection therewith may be
properly conducted at all times; provided, that the Borrower or
--------
any Subsidiary may, subject to Section 6.13, dispose of any
------------
Property that such Person deems unnecessary for the conduct of its
business.
6.9. Inspection. The Borrower will, and will cause each
----------
Subsidiary to, permit the Agent and the Lenders, by their
respective representatives and agents, to inspect any of the
Property, corporate books and financial records of the Borrower
and each Subsidiary, to examine and make copies of the books of
accounts and other financial records of the Borrower and each
Subsidiary, and to discuss the affairs, finances and accounts of
the Borrower and each Subsidiary with, and to be advised as to the
same by, their respective officers at such reasonable times and
intervals as the Lenders may designate. The Borrower will keep or
cause to be kept, and cause each Subsidiary to keep or cause to be
kept, appropriate records and books of account in which complete
entries are to be made reflecting its and their business and
-59-
financial transactions, such entries to be made in accordance with
Agreement Accounting Principles or SAP, as applicable,
consistently applied.
6.10. Capital Stock and Dividends. The Borrower will not,
---------------------------
nor will it permit any Subsidiary to, (a) issue any capital stock
or equity securities of any kind if, as a result thereof, a Change
in Control would occur, or (b) declare or pay any dividends or
make any distributions on its capital stock (other than dividends
payable in its own capital stock) or redeem, repurchase or
otherwise acquire or retire any of its capital stock or any
options or other rights in respect thereof at any time outstanding
if a Default or Unmatured Default has occurred and is continuing
or would occur after giving effect thereto (determined with
respect to the covenants set forth in Section 6.22 on a pro forma
------------
basis as of the last day of the immediately preceding Fiscal
Quarter), except that any Subsidiary may declare and pay dividends
or make distributions to the Borrower or any Wholly Owned
Subsidiary.
6.11. Indebtedness. The Borrower will not, nor will it
------------
permit any Subsidiary to, create, incur or suffer to exist any
Indebtedness, except:
(a) the Loans;
(b) Indebtedness existing on the date hereof and
described in Schedule 5.17 hereto;
-------------
(c) Rate Hedging Obligations related to the Loans;
(d) Contingent Obligations permitted pursuant to
Section 6.15; and
------------
(e) additional Indebtedness so long as no Default or
Unmatured Default has occurred and is continuing or would occur
after giving effect to such incurrence of Indebtedness (determined
with respect to the covenants set forth in Section 6.22 on a pro
------------
forma basis as of the last day of the immediately preceding Fiscal
Quarter).
-60-
6.12. Merger. The Borrower will not, nor will it permit any
------
Subsidiary to, merge or consolidate with or into any other Person,
except that (a) a Wholly Owned Subsidiary may merge into the
Borrower or any Wholly Owned Subsidiary of the Borrower, (b) the
Borrower may enter into any merger or consolidation so long as (i)
the surviving or successor corporation is organized under the laws
of any state of the United States and assumes the Obligations by
written instrument acceptable in form and substance to the Agent
and each Lender, (ii) no Default or Unmatured Default has occurred
and is continuing or would occur after giving effect thereto
(determined with respect to the covenants set forth in Section
-------
6.22 on a pro forma basis as of the last day of the immediately
----
preceding Fiscal Quarter) and (iii) each Lender has given its
prior written consent to such transaction, which consent shall not
be unreasonably withheld and (c) any Subsidiary formed for the
purpose of effecting a transaction permitted under Section
-------
6.14(a)(iv) or (b)(v) may merge with another entity if required to
----------- ------
consummate such transaction.
6.13. Sale of Assets. The Borrower will not, nor will it
--------------
permit any Subsidiary to, lease, sell, transfer or otherwise
dispose of its Property to any other Person except for (a) sales
of Investments in the ordinary course of business by the Borrower
or any Insurance Subsidiary, including without limitation,
transactions undertaken for the purpose of restructuring all or a
part of the portfolio of Investments owned by the Borrower or such
Insurance Subsidiary, (b) leases, sales, transfers or other
dispositions of its Property that, together with all other
Property of its Subsidiaries previously leased, sold or disposed
of (other than Investments sold in the ordinary course of business
by Insurance Subsidiaries) as permitted by this Section 6.13 since
------------
the date hereof do not constitute a Substantial Portion of the
Property of the Borrower and its Subsidiaries, and (c) a sale of
all or substantially all of the Borrower's assets so long as (i)
the successor corporation is organized under the laws of any state
of the United States and assumes the Obligations by written
instrument acceptable in form and substance to each Lender, (ii)
no Default or Unmatured Default has occurred and is continuing or
would occur after giving effect thereto (determined with respect
-61-
to the covenants set forth in Section 6.22 on a pro forma basis as
------------
of the last day of the immediately preceding Fiscal Quarter), and
(iii) each Lender has given its prior written consent to such
transaction, which consent shall not be unreasonably withheld.
6.14. Investments and Purchases. (a) The Borrower will not,
-------------------------
and will not permit any Subsidiary which is not an Insurance
Subsidiary to, make or suffer to exist any Investments (including,
without limitation, loans and advances to, and other Investments
in, Subsidiaries), or commitments therefor, or to create any
Subsidiary or to become or remain a partner in any partnership or
joint venture, or to make any Purchases, except:
(i) Cash and Cash Equivalents;
(ii) Investments in existence as of September 30, 1996
(including Investments in Subsidiaries as of September 30,
1996) and described in Schedule 6.14 hereto;
-------------
(iii) Investments in debt securities rated BBB- or
better by S&P, Baa-3 or better by ▇▇▇▇▇'▇ or NAIC-2 or better
by the NAIC; provided, that any such Investment which, at any
time after which it is made, ceases to meet such rating
requirements shall (A) cease to be permitted hereby if then
permitted by Section 6.14(a)(vi) and (B) if not then
-------------------
permitted by Section 6.14(a)(vi) remain permitted hereby
-------------------
until the earlier of the time it is permitted under Section
-------
6.14(a)(vi) and the date which is 30 days after the date on
-----------
which such rating requirement is no longer met;
(iv) Purchases of businesses or entities engaged in the
insurance business or businesses reasonably incident thereto
which do not constitute hostile takeovers (including the
creation of Subsidiaries in connection therewith) so long as
no Default or Unmatured Default has occurred and is
continuing or would occur after giving effect to such
Purchase or creation (determined with respect to the
covenants set forth in Section 6.22 on a pro forma basis as
------------
of the last day of the immediately preceding Fiscal Quarter);
-62-
(v) Other Investments by the Borrower in any Person
which is a Subsidiary as of the date hereof, so long as no
Default or Unmatured Default has occurred and is continuing
or would occur after giving effect to such Investment
(determined with respect to the covenants set forth in
Section 6.22 on a pro forma basis as of the last day of the
------------
immediately preceding Fiscal Quarter); and
(vi) Other Investments by the Borrower in an amount not
exceeding $40,000,000 (including the creation of Subsidiaries
and Investments therein and Investments in any partnership or
joint venture) so long as at the time of such Investment no
Default or Unmatured Default has occurred and is continuing
or would occur after giving effect to such Investment
(determined with respect to the covenants set forth in
Section 6.22 on a pro forma basis as of the last day of the
------------
immediately preceding Fiscal Quarter).
(b) The Borrower will not permit any Insurance
Subsidiary to make or suffer to exist any Investments (including,
without limitation, loans and advances to and other Investments
in, Subsidiaries), or commitments therefor, or to create any
Subsidiary or to become or remain a partner in any partnership or
joint venture, or to make any Purchases, except:
(i) Cash and Cash Equivalents;
(ii) Investments in debt securities rated BBB- or
better by S&P, Baa-3 or better by ▇▇▇▇▇'▇ or NAIC-2 or better
by the NAIC; provided, that any such Investment which, at any
time after which it is made, ceases to meet such rating
requirements shall (A) cease to be permitted hereby if then
permitted by Section 6.14(b)(vi) and (B) if not then
-----------
permitted by Section 6.14(b)(vi) remain permitted hereby
-----------
until the earlier of the time it is permitted under Section
-------
6.14(b)(vi) and the date which is 30 days after the date on
-----------
which such rating requirement is no longer met;
(iii) Existing Investments in Subsidiaries and other
Investments in existence on the date hereof;
-63-
(iv) Other Investments in any Person which is a
Subsidiary as of the date hereof so long as no Default or
Unmatured Default has occurred and is continuing or would
occur after giving effect to such Investment (determined with
respect to the covenants set forth in Section 6.22 on a pro
------------
forma basis as of the last day of the immediately preceding
Fiscal Quarter);
(v) Purchases of businesses or entities engaged in the
insurance business which do not constitute hostile takeovers
(including the creation of Subsidiaries in connection
therewith) made after the date of this Agreement for an
aggregate consideration not to exceed $50,000,000, so long as
no Default or Unmatured Default has occurred and is
continuing or would occur after giving effect thereto
(determined with respect to the covenants set forth in
Section 6.22 on a pro forma basis as of the last day of the
------------
immediately preceding Fiscal Quarter); and
(vi) Other Investments (including the creation of
Subsidiaries and Investments therein and Investments in any
partnership or joint venture but excluding any Investment of
the type described in clause (b)(v) above) of a type
acceptable to the insurance commissioner in the respective
domiciliary state of such Insurance Subsidiary; provided,
that such Investments do not exceed, in the aggregate at any
one time outstanding, an amount equal to the Total Admitted
Assets (as presented on the "Assets" statement, currently
Page 2, Line 21 of the Annual Statement) of all Insurance
Subsidiaries (determined, where applicable, on a combined
basis by reference to the comparable line in the combined
Annual Statement) less 125% of the aggregate Total Required
Liabilities (as presented on the "Liabilities, Surplus and
Other Funds" statement, currently Page 3, Line 21 of the
Annual Statement) of all Insurance Subsidiaries (determined,
where applicable, on a combined basis by reference to the
comparable line in the combined Annual Statement); provided,
further, that the fair market value of the Investment in
Burlington Northern Santa Fe Corporation held by the Borrower
and its Insurance Subsidiaries shall be subtracted from such
amount for so long as such Investment exists.
6.15. Contingent Obligations. The Borrower will not, nor
----------------------
will it permit any Subsidiary to, make or suffer to exist any
Contingent Obligation (including, without limitation, any
-64-
Contingent Obligation with respect to the obligations of a
Subsidiary), except (a) the Contingent Obligations described on
Schedule 5.17, (b) Contingent Obligations in respect of insurance
-------------
contracts or policies issued in the ordinary course of business,
(c) Contingent Obligations in respect of the extension of
guaranties in the ordinary course of business to insureds of the
obligations of insurers under insurance policies or contracts, and
(d) Contingent Obligations in respect of the endorsement of
instruments for deposit or collection in the ordinary course of
business.
6.16. Liens. The Borrower will not, nor will it permit any
-----
Subsidiary to, create, incur, or suffer to exist any Lien in, of
or on the Property of the Borrower or any of its Subsidiaries,
except:
(a) Liens for taxes, assessments or governmental
charges or levies on its Property if the same shall not at the
time be delinquent or thereafter can be paid without penalty, or
are being contested in good faith and by appropriate proceedings
and for which adequate reserves in accordance with generally
accepted principles of accounting or SAP, as applicable, shall
have been set aside on its books;
(b) Liens imposed by law, such as carriers',
warehousemen's and mechanics' liens and other similar liens
arising in the ordinary course of business which secure the
payment of obligations not more than 60 days past due or which are
being contested in good faith by appropriate proceedings and for
which adequate reserves shall have been set aside on its books;
(c) Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance, old age
pensions, or other social security or retirement benefits, or
similar legislation;
(d) Utility easements, building restrictions and such
other encumbrances or charges against real property as are of a
nature generally existing with respect to properties of a similar
character and which do not in any material way affect the
marketability of the same or interfere with the use thereof in the
business of the Borrower or the Subsidiaries;
(e) Deposits made by any Insurance Subsidiary with the
insurance regulatory authority in its jurisdiction of domicile or
other statutory liens or liens or claims imposed or required by
-65-
applicable insurance law or regulation against the assets of any
Insurance Subsidiary, in each case in favor of all policyholders
of such Insurance Subsidiary and in the ordinary course of such
Insurance Subsidiary's business;
(f) Rights of third parties with respect to amounts
deposited with or for the benefit of any Insurance Subsidiary in
trust to secure obligations owed to any Insurance Subsidiary under
contracts of reinsurance entered into in the ordinary course of
such Insurance Subsidiary's business;
(g) Liens existing on the date hereof and described in
Schedule 6.16 hereto; and
-------------
(h) Other Liens securing Indebtedness or obligations
with an aggregate principal amount not in excess of $1,000,000 at
any time outstanding.
6.17. Affiliates. The Borrower will not, and will not permit
----------
any Subsidiary to, enter into any transaction (including, without
limitation, the purchase or sale of any Property or service) with,
or make any payment or transfer to, any Affiliate (other than URC
Barbados Holding Corp. and entities owned by it) except in the
ordinary course of business and pursuant to the reasonable
requirements of the Borrower's or such Subsidiary's business and
upon fair and reasonable terms no less favorable to the Borrower
or such Subsidiary than the Borrower or such Subsidiary would
obtain in a comparable arm's-length transaction.
6.18. Other Indebtedness. The Borrower will not, and will
------------------
not permit any Subsidiary to, directly or indirectly voluntarily
prepay, defease or in substance defease, purchase, redeem, retire
or otherwise acquire, any Indebtedness prior to the date when due
(other than the Loans) while a Default or Unmatured Default has
occurred and is continuing.
6.19. Environmental Matters. The Borrower shall and shall
---------------------
cause each of its Subsidiaries to (a) at all times comply in all
material respects with all applicable Environmental Laws and (b)
promptly take any and all commercially reasonable remedial actions
in response to the presence, storage, use, disposal,
transportation or Release of any Hazardous Materials on, under or
about any real property owned, leased or operated by the Borrower
or any of its Subsidiaries.
-66-
6.20. Change in Corporate Structure; Fiscal Year. The
------------------------------------------
Borrower shall not, nor shall it permit any Subsidiary to, (a)
permit any amendment or modification to be made to its certificate
or articles of incorporation or by-laws which is materially
adverse to the interests of the Lenders (provided that the
--------
Borrower shall notify the Agent of any other amendment or
modification thereto as soon as practicable thereafter) or (b)
change its Fiscal Year to end on any date other than December 31
of each year.
6.21. Inconsistent Agreements. The Borrower shall not, nor
-----------------------
shall it permit any Subsidiary to, enter into any indenture,
agreement, instrument or other arrangement which, (a) directly or
indirectly prohibits or restrains, or has the effect of
prohibiting or restraining, or imposes materially adverse
conditions upon, the incurrence of the Obligations, the amending
of the Loan Documents or the ability of any Subsidiary to (i) pay
dividends or make other distributions on its capital stock, (ii)
make loans or advances to the Borrower or (iii) repay loans or
advances from the Borrower or (b) contains any provision which
would be violated or breached by the making of Advances or by the
performance by the Borrower of any of its obligations under any
Loan Document.
6.22. Financial Covenants. The Borrower shall:
-------------------
6.22.1. Minimum Statutory Surplus. At all times
-------------------------
after the date hereof, cause the Insurance Subsidiaries, as
determined on a combined basis for all of the Insurance
Subsidiaries (without double counting) as of the last day of each
Fiscal Quarter, to maintain a minimum Statutory Surplus at least
equal to the sum of (a) $529,500,000, plus (b) 100% of any capital
contributions made to any Insurance Subsidiary after June 30, 1996
(without double counting), plus (c) 35% of positive Statutory Net
----
Income, if any, for each Fiscal Quarter ending after the date
hereof and on or prior to the time of determination.
6.22.2. Leverage Ratio. At all times after the date
--------------
hereof, determined as of the end of each Fiscal Quarter, maintain
a Leverage Ratio of not more than .35 to 1.0.
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6.23. Tax Consolidation. The Borrower will not and will not
-----------------
permit any of its Subsidiaries to file or consent to the filing of
any consolidated, combined or unitary income tax return with any
Person (other than any of the Borrower's Subsidiaries, Alleghany
or any other Consolidated Person), except as required by law. The
Borrower will not, and will not permit any of its Subsidiaries to,
enter into any tax sharing agreement with any Person (other than
Alleghany, the Borrower or any of its Subsidiaries) without the
written consent of the Required Lenders. The Borrower shall cause
each Subsidiary (including any newly acquired or newly created
Subsidiary) to enter into a tax sharing agreement with the
Borrower or such Subsidiary's immediate parent corporation, as the
case may be, which tax sharing agreement shall obligate such
Subsidiary to pay to the Borrower (or to such Subsidiary's
immediate parent corporation) an amount of tax substantially equal
to the amount of tax the Borrower is required to pay to Alleghany
by reason of the taxable income of such Subsidiary. No Tax
Sharing Agreement or other agreement described above may be
amended to provide for any payments to be made to Alleghany in an
amount substantially in excess of the amount of tax which
Alleghany is required to pay by reason of the taxable income of
the Borrower and its Subsidiaries.
6.24. ERISA Compliance.
----------------
With respect to any Plan, neither the Borrower nor any
Subsidiary shall:
(a) engage in any "prohibited transaction" (as such
term is defined in Section 406 of ERISA or Section 4975 of the
Code) for which a civil penalty pursuant to Section 502(i) of
ERISA or a tax pursuant to Section 4975 of the Code in excess of
$1,000,000 could be imposed;
(b) permit to be incurred any "accumulated funding
deficiency" (as such term is defined in Section 302 of ERISA) in
excess of $1,000,000, whether or not waived;
(c) permit the occurrence of any Termination Event
which could result in a liability to the Borrower or any other
member of the Controlled Group in excess of $1,000,000;
(d) be an "employer" (as such term is defined in
Section 3(5) of ERISA) required to contribute to any Multiemployer
Plan or a "substantial employer" (as such term in defined in
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Section 4001(a)(2) of ERISA) required to contribute to any
Multiemployer Plan; or
(e) permit the establishment or amendment of any Plan
or fail to comply with the applicable provisions of ERISA and the
Code with respect to any Plan which could reasonably be expected
to result in liability to the Borrower or any other member of the
Controlled Group which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
ARTICLE VII
DEFAULTS
--------
The occurrence of any one or more of the following events
shall constitute a Default:
7.1. Any representation or warranty made or deemed made by
or on behalf of the Borrower to the Lenders or the Agent under or
in connection with this Agreement, any other Loan Document, any
Loan, or any certificate or material information delivered in
connection with this Agreement or any other Loan Document shall be
false in any material respect on the date as of which made.
7.2. Nonpayment of (a) any principal of any Note when due,
or (b) any interest upon any Note or any commitment fee or other
fee or obligations under any of the Loan Documents within five
days after the same becomes due.
7.3. The breach by the Borrower of any of the terms or
provisions of Section 6.2, Section 6.3(a) or Sections 6.10 through
----------- -------------- -------------
6.24.
----
7.4. The breach by the Borrower (other than a breach which
constitutes a Default under Section 7.1, 7.2 or 7.3) of any of the
----------- --- ---
terms or provisions of this Agreement which is not remedied within
thirty (30) days after written notice from the Agent or any
Lender.
7.5. The default by the Borrower or any of its Subsidiaries
in the performance of any term, provision or condition contained
in any agreement or agreements under which any Indebtedness
aggregating in excess of $5,000,000 was created or is governed, or
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the occurrence of any other event or existence of any other
condition, the effect of any of which is to cause, or to permit
the holder or holders of such Indebtedness to cause, such
Indebtedness to become due prior to its stated maturity; or 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 payment) prior to the stated
maturity thereof.
7.6. The Borrower or any of its Subsidiaries shall (a) have
an order for relief entered with respect to it under the Federal
bankruptcy laws as now or hereafter in effect, (b) make an
assignment for the benefit of creditors, (c) apply for, seek,
consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for
it or any Substantial Portion of its Property, (d) institute any
proceeding seeking an order for relief under the Federal
bankruptcy laws as now or hereafter in effect or seeking to
adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment
or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or
fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, (e) take any
corporate action to authorize or effect any of the foregoing
actions set forth in this Section 7.6, (f) fail to contest in good
-----------
faith any appointment or proceeding described in Section 7.7 or
-----------
(g) become unable to pay, not pay, or admit in writing its
inability to pay, its debts generally as they become due.
7.7. Without the application, approval or consent of the
Borrower or any of its Subsidiaries, a receiver, trustee,
examiner, liquidator or similar official shall be appointed for
the Borrower or any of its Subsidiaries or any Substantial Portion
of its Property, or a proceeding described in Section 7.6(d) shall
--------------
be instituted against the Borrower or any of its Subsidiaries and
such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of forty-five (45)
consecutive days.
7.8. Any court, government or governmental agency shall
condemn, seize or otherwise appropriate, or take custody or
control of (each a "Condemnation"), all or any portion of the
------------
Property of the Borrower and its Subsidiaries which, when taken
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together with all other Property of the Borrower and its
Subsidiaries so condemned, seized, appropriated, or taken custody
or control of, during the twelve-month period ending with the
month in which any such Condemnation occurs, constitutes a
Substantial Portion.
7.9. The Borrower or any of its Subsidiaries shall fail
within thirty days to pay, bond or otherwise discharge any
judgment or order for the payment of money in excess of $500,000
(or multiple judgments or orders for the payment of an aggregate
amount in excess of $1,000,000), which is not stayed on appeal or
otherwise being appropriately contested in good faith and as to
which no enforcement actions have been commenced.
7.10. Any Change in Control shall occur.
7.11. Nonpayment by the Borrower of any Rate Hedging
Obligation owed to any Lender or the breach by the Borrower of any
term, provision or condition contained in any agreement, device or
arrangement giving rise to any such Rate Hedging Obligation.
7.12. Any material License of any Insurance Subsidiary (a)
shall be revoked by the Governmental Authority which issued such
License, or any action (administrative or judicial) to revoke such
License shall have been commenced against such Insurance
Subsidiary and shall not have been dismissed within 60 days after
the commencement thereof, (b) shall be suspended by such
Governmental Authority for a period in excess of 60 days or (c)
shall not be reissued or renewed by such Governmental Authority
upon the expiration thereof following application for such
reissuance or renewal of such Insurance Subsidiary.
7.13. Any Insurance Subsidiary shall be the subject of a
final non-appealable order imposing a fine in an amount in excess
of $250,000 in any single instance or other such orders imposing
fines in excess of $1,000,000 in the aggregate after the date of
this Agreement by or at the request of any state insurance
regulatory agency as a result of the violation by such Insurance
Subsidiary of such state's applicable insurance laws or the
regulations promulgated in connection therewith.
7.14. Any Insurance Subsidiary shall become subject to (a)
any conservation or liquidation order, directive or mandate issued
by any Governmental Authority or (b) any other directive or
mandate issued by any Governmental Authority which could
reasonably be expected to have a Material Adverse Effect, which in
either case is not stayed within thirty (30) days.
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7.15. The Borrower, any of its Subsidiaries, Alleghany or any
other Consolidated Person shall receive any tax assessment, demand
or notice of deficiency or have any tax liens filed or any
judicial proceeding relating to any tax matter commenced against
it which, in any such case, could reasonably be expected to have a
Material Adverse Effect or any tax lien shall be filed against any
property of the Borrower or any Subsidiary relating to the tax
liabilities of any Person if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are being
contested in good faith and by appropriate proceedings and for
which adequate reserves in accordance with generally accepted
principles of accounting or SAP, as applicable, shall have been
set aside on its books.
7.16. (a) The Unfunded Liabilities of all Single Employer
Plans maintained by the Borrower and its Subsidiaries shall exceed
in the aggregate $1,000,000 or a Reportable Event shall occur in
connection with any Plan maintained by the Borrower or any of its
Subsidiaries, (b) the Unfunded Liabilities of all Single Employer
Plans maintained by other members of the Controlled Group shall
exceed an amount which could reasonably be expected to have a
Material Adverse Effect or any Reportable Event shall occur in
connection with any Plan maintained by other members of the
Controlled Group which could reasonably be expected to have a
Material Adverse Effect or (c) any Lien shall be imposed by the
PBGC or the IRS against any assets of the Borrower or any of its
Subsidiaries with respect to a Plan maintained by any other member
of the Controlled Group (or any other employee pension benefit
plan as to which any such member may be liable).
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
----------------------------------------------
8.1. Acceleration. If any Default described in Section 7.6
------------ -----------
or 7.7 occurs with respect to the Borrower, the obligations of the
---
Lenders to make Loans hereunder shall automatically terminate and
the Obligations shall immediately become due and payable without
any election or action on the part of the Agent or any Lender. If
any other Default occurs, the Required Lenders (or the Agent with
the consent of the Required Lenders) may terminate or suspend the
obligations of the Lenders to make Loans hereunder, or declare the
Obligations to be due and payable, or both, whereupon the
Obligations shall become immediately due and payable, without
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presentment, demand, protest or notice of any kind, all of which
the Borrower hereby expressly waives.
If, within ten Business Days after acceleration of the
maturity of the Obligations or termination of the obligations of
the Lenders to make Loans hereunder as a result of any Default
(other than any Default as described in Section 7.6 or 7.7 with
----------- ---
respect to the Borrower) and before any judgment or decree for the
payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall so
direct, the Agent shall, by notice to the Borrower, rescind and
annul such acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this Article
---------- -------
VIII, the Required Lenders (or the Agent with the consent in
----
writing of the Required Lenders) and the Borrower may enter into
agreements supplemental hereto for the purpose of adding or
modifying any provisions to the Loan Documents or changing in any
manner the rights of the Lenders or the Borrower hereunder or
waiving any Default hereunder; provided, however, that no such
-------- -------
supplemental agreement shall, without the consent of each Lender:
(a) Extend the final maturity of any Loan or Note or
reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest or fees thereon;
(b) Reduce the percentage specified in the definition
of Required Lenders;
(c) Increase the amount of the Commitment of any
Lender hereunder;
(d) Extend the Facility Termination Date;
(e) Amend this Section 8.2; or
-----------
(f) Permit any assignment by the Borrower of its
Obligations or its rights hereunder.
No amendment of any provision of this Agreement relating to the
Agent shall be effective without the written consent of the Agent.
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The Agent may waive payment of the fee required under Section
-------
12.3.2 without obtaining the consent of any other party to this
------
Agreement.
8.3. Preservation of Rights. No delay or omission of the
----------------------
Lenders or the Agent to exercise any right under the Loan
Documents shall impair such right or be construed to be a waiver
of any Default or an acquiescence therein, and the making of a
Loan notwithstanding the existence of a Default or the inability
of the Borrower to satisfy the conditions precedent to such Loan
shall not constitute any waiver or acquiescence. Any single or
partial exercise of any such right shall not preclude other or
further exercise thereof or the exercise of any other right, and
no waiver, amendment or other variation of the terms, conditions
or provisions of the Loan Documents whatsoever shall be valid
unless in writing signed by the Lenders required pursuant to
Section 8.2, and then only to the extent in such writing
-----------
specifically set forth. All remedies contained in the Loan
Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have
been paid in full.
ARTICLE IX
GENERAL PROVISIONS
------------------
9.1. Survival of Representations. All representations and
---------------------------
warranties of the Borrower contained in this Agreement or of the
Borrower or any Subsidiary contained in any Loan Document shall
survive the delivery of the Notes and the making of the Loans
herein contemplated.
9.2. Governmental Regulation. Anything contained in this
-----------------------
Agreement to the contrary notwithstanding, no Lender shall be
obligated to extend credit to the Borrower in violation of any
limitation or prohibition provided by any applicable statute or
regulation.
-74-
9.3. Taxes. Any stamp, documentary or similar taxes,
-----
assessments or charges payable or ruled payable by any
governmental authority in respect of the Loan Documents shall be
paid by the Borrower, together with interest and penalties, if
any.
9.4. Headings. Section headings in the Loan Documents are
--------
for convenience of reference only, and shall not govern the
interpretation of any of the provisions of the Loan Documents.
9.5. Entire Agreement. The Loan Documents embody the entire
----------------
agreement and understanding among the Borrower, the Agent and the
Lenders and supersede all prior agreements and understandings
among the Borrower, the Agent and the Lenders relating to the
subject matter thereof other than the fee letter dated August 5,
1996 in favor of First Chicago.
9.6. Several Obligations; Benefits of this Agreement. The
-----------------------------------------------
respective obligations of the Lenders hereunder are several and
not joint and no Lender shall be the partner or agent of any other
(except to the extent to which the Agent is authorized to act as
such). The failure of any Lender to perform any of its
obligations hereunder shall not relieve any other Lender from any
of its obligations hereunder. This Agreement shall not be
construed so as to confer any right or benefit upon any Person
other than the parties to this Agreement and the Arranger and
their respective successors and assigns.
9.7. Expenses; Indemnification. The Borrower shall
-------------------------
reimburse the Agent and the Arranger for any costs, internal
charges and out-of-pocket expenses (including attorneys' fees and
time charges of attorneys for the Agent and the Arranger, which
attorneys may be employees of the Agent or the Arranger) paid or
incurred by the Agent or the Arranger in connection with the
preparation, negotiation, execution, delivery, review, amendment,
modification, and administration of the Loan Documents. The
Borrower also agrees to reimburse the Agent, the Arranger and the
Lenders for any costs, internal charges and out-of-pocket expenses
(including attorneys' fees and time charges of attorneys for the
Agent, the Arranger and the Lenders, which attorneys may be
employees of the Agent, the Arranger or the Lenders) paid or
incurred by the Agent, the Arranger or any Lender in connection
with the collection and enforcement of the Loan Documents. The
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Borrower further agrees to indemnify the Agent, the Arranger and
each Lender, its directors, officers and employees against all
losses, claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, all expenses of
litigation or preparation therefor whether or not the Agent, the
Arranger or any Lender is a party thereto) which any of them may
pay or incur arising out of or relating to this Agreement or the
other Loan Documents the transactions contemplated hereby or
thereby or the direct or indirect application or proposed
application of the proceeds of any Loan hereunder except to the
extent that they arise (a) out of the gross negligence or willful
misconduct of the party seeking indemnification, (b) from any
dispute of or any litigation or other proceeding instituted by any
Lender against the Agent or any other Lender or (c) from any
breach by the party seeking indemnification of its obligations
under this Agreement. The obligations of the Borrower under this
Section shall survive the termination of this Agreement.
9.8. Numbers of Documents. All statements, notices, closing
--------------------
documents, and requests hereunder shall be furnished to the Agent
with sufficient counterparts so that the Agent may furnish one to
each of the Lenders.
9.9. Accounting. Except as provided to the contrary or
----------
otherwise defined herein, all accounting terms used herein shall
be interpreted and all accounting determinations hereunder shall
be made in accordance with Agreement Accounting Principles.
9.10. Severability of Provisions. Any provision in any Loan
--------------------------
Document that is held to be inoperative, unenforceable, or invalid
in any jurisdiction shall, as to that jurisdiction, be
inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents
are declared to be severable.
9.11. Nonliability of Lenders. The relationship between the
-----------------------
Borrower and the Lenders and the Agent shall be solely that of
borrower and lender. Neither the Agent nor any Lender shall have
any fiduciary responsibilities to the Borrower. Neither the Agent
nor any Lender undertakes any responsibility to the Borrower to
review or inform the Borrower of any matter in connection with any
phase of the Borrower's business or operations. The Borrower
-76-
shall rely entirely upon its own judgment with respect to its
business, and any review, inspection or supervision of, or
information supplied to the Borrower by the Agent or the Lenders
is for the protection of the Agent and the Lenders and neither the
Borrower nor any other Person is entitled to rely thereon. The
Borrower agrees that neither the Agent nor any Lender shall have
liability to the Borrower (whether sounding in tort, contract or
otherwise) for losses suffered by the Borrower in connection with,
arising out of, or in any way related to, the transactions
contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection
therewith, unless it is determined by a judgment of a court that
is binding on the Agent, or such Lender, final and not subject to
review on appeal, that such losses were the result of acts or
omissions on the part of the Agent or such Lender, as the case may
be, constituting gross negligence or willful misconduct of the
party from which recovery is sought. Whether or not such damages
are related to a claim that is subject to the waiver effected
above and whether or not such waiver is effective, neither the
Agent nor any Lender shall have any liability with respect to, and
the Borrower hereby waives, releases and agrees not to ▇▇▇ for,
any special, indirect or consequential damages suffered by the
Borrower in connection with, arising out of, or in any way related
to the Loan Documents or the transactions contemplated thereby or
the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith.
9.12. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE
-------------
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS, WITHOUT REGARD TO
CONFLICT OF LAWS PROVISIONS, OF THE STATE OF ILLINOIS, BUT GIVING
EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
9.13. CONSENT TO JURISDICTION. THE BORROWER HEREBY
-----------------------
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO
IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN
DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS
AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF
THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER
IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING
BY THE BORROWER AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE
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OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO,
ILLINOIS; PROVIDED, THAT SUCH PROCEEDINGS MAY BE BROUGHT IN OTHER
COURTS IF JURISDICTION MAY NOT BE OBTAINED IN A COURT IN CHICAGO,
ILLINOIS.
9.14. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH
--------------------
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP
ESTABLISHED THEREUNDER.
9.15. Disclosure. The Borrower and each Lender hereby (a)
----------
acknowledge and agree that First Chicago and/or its Affiliates
from time to time may hold other investments in, make other loans
to or have other relationships with the Borrower, including,
without limitation, in connection with any interest rate hedging
instruments or agreements or swap transactions, and (b) waive any
liability arising out of or resulting from any conflict of
interest arising from such investments, loans or relationships.
9.16. Counterparts. This Agreement may be executed in any
------------
number of counterparts, all of which taken together shall
constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the
Borrower, the Agent and the Lenders and each party has notified
the Agent that it has taken such action.
9.17. Confidentiality. Each of the Agent and each Lender
---------------
agrees to take and to cause its Affiliates to take normal and
reasonable precautions and exercise due care to maintain the
confidentiality of all information identified as "confidential" or
"secret" by the Borrower and provided to it by the Borrower or any
Subsidiary, or by the Agent on the Borrower's or such Subsidiary's
behalf, under this Agreement or any other Loan Document, and
neither it nor any of its Affiliates shall use any such
information other than in connection with or in enforcement of
this Agreement and the other Loan Documents or in connection with
other business now or hereafter existing or contemplated with the
Borrower or any Subsidiary, except to the extent such information
(i) was or becomes generally available to the public other than as
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a result of disclosure by the Lender, or (ii) was or becomes
available on a non-confidential basis from a source other than the
Borrower, provided that such source is not bound by a
confidentiality agreement with the Borrower known to the Agent or
such Lender; provided, however, that the Agent or any Lender may
-------- -------
disclose such information (a) at the request or pursuant to any
requirement of any Governmental Authority to which the Agent or
such Lender is subject or in connection with an examination of the
Agent or such Lender by any such authority; (b) pursuant to
subpoena or other court process, provided that if not prohibited
by law, the Agent or such Lender will use its best efforts to
provide notice to the Borrower of the receipt of such subpoena and
give the Borrower reasonable opportunity to seek a protective
order with respect to such information prior to delivering
confidential material in response thereto; (c) when required to do
so in accordance with the provisions of any applicable requirement
of law; (d) to the extent reasonably required in connection with
any litigation or proceeding with respect to the transactions
contemplated hereby to which the Agent or any Lender or their
respective Affiliates may be party; (e) to the extent reasonably
required in connection with the exercise of any remedy hereunder
or under any other Loan Document; (f) to the Agent's or such
Lender's independent auditors and other professional advisors with
a need to know and who agree to keep such information confidential
to the extent required of the Agent or such Lender hereunder; (g)
to any Participant or Purchaser, actual or potential, provided
that such Person agrees to keep such information confidential to
the same extent required of the Agent or the Lenders hereunder;
(h) as to the Agent or any Lender or its Affiliate, as expressly
permitted under the terms of any other document or agreement
regarding confidentiality to which the Borrower or any Subsidiary
is party or is deemed party with the Agent or such Lender or such
Affiliate; and (i) to its Affiliates, provided that any such
Affiliate agrees in writing to keep such information confidential
to the same extent required of the Agent or such Lender hereunder.
ARTICLE X
THE AGENT
---------
10.1 Appointment. First Chicago is hereby appointed Agent
-----------
hereunder and under each other Loan Document, and each of the
Lenders authorizes the Agent to act as the agent of such Lender.
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The Agent agrees to act as such upon the express conditions
contained in this Article X. The Agent shall not have a fiduciary
---------
relationship in respect of the Borrower or any Lender by reason of
this Agreement.
10.2. Powers. The Agent shall have and may exercise such
------
powers under the Loan Documents as are specifically delegated to
the Agent by the terms of each thereof, together with such powers
as are reasonably incidental thereto. The Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders to
take any action thereunder, except any action specifically
provided by the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its
----------------
directors, officers, agents or employees shall be liable to the
Borrower or any Lender for any action taken or omitted to be taken
by it or them hereunder or under any other Loan Document or in
connection herewith or therewith except for its or their own gross
negligence or willful misconduct.
10.4. No Responsibility for Loans, Recitals, etc. Neither
-------------------------------------------
the Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire
into, or verify (a) any statement, warranty or representation made
in connection with any Loan Document or any borrowing hereunder,
(b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish
information directly to each Lender; (c) the satisfaction of any
condition specified in Article IV, except receipt of items
----------
required to be delivered to the Agent and not waived at closing,
or (d) the validity, effectiveness, sufficiency, enforceability or
genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith. The Agent shall have
no duty to disclose to the Lenders information that is not
required to be furnished by the Borrower to the Agent at such
time, but is voluntarily furnished by the Borrower to the Agent
(either in its capacity as Agent or in its individual capacity).
10.5. Action on Instructions of Lenders. The Agent shall in
---------------------------------
all cases be fully protected in acting, or in refraining from
acting, hereunder and under any other Loan Document in accordance
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with written instructions signed by the Required Lenders (or, to
the extent required by Section 8.2, all Lenders), and such
-----------
instructions and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders and on all holders
of Notes. The Agent shall be fully justified in failing or
refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction
by the Lenders pro rata against any and all liability, cost and
expense that it may incur by reason of taking or continuing to
take any such action.
10.6. Employment of Agents and Counsel. The Agent may
--------------------------------
execute any of its duties as Agent hereunder and under any other
Loan Document by or through employees, agents and attorneys-in-
fact and shall not be answerable to the Lenders, except as to
money or securities received by it or its authorized agents, for
the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled
to advice of counsel concerning all matters pertaining to the
agency hereby created and its duties hereunder and under any other
Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be
------------------------------
entitled to rely upon any Note, notice, consent, certificate,
affidavit, letter, telegram, statement, paper or document believed
by it to be genuine and correct and to have been signed or sent by
the proper person or persons, and, in respect to legal matters,
upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders
-----------------------------------------
agree to reimburse and indemnify the Agent ratably in proportion
to their respective Commitments (or, if the Commitments have been
terminated, in proportion to their Commitments immediately prior
to such termination) (a) for any amounts not reimbursed by the
Borrower for which the Agent is entitled to reimbursement by the
Borrower under the Loan Documents, (b) for any other expenses
incurred by the Agent on behalf of the Lenders, in connection with
the preparation, execution, delivery, administration and
enforcement of the Loan Documents, and (c) for any liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of the
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Loan Documents or any other document delivered in connection
therewith or the transactions contemplated thereby, or the
enforcement of any of the terms thereof or of any such other
documents; provided, that no Lender shall be liable for any of the
--------
foregoing to the extent they arise from the gross negligence or
willful misconduct of the Agent. The obligations of the Lenders
under this Section 10.8 shall survive payment of the Obligations
------------
and termination of this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to
-----------------
have knowledge or notice of the occurrence of any Default or
Unmatured Default hereunder unless the Agent has received written
notice from a Lender or the Borrower referring to this Agreement
describing such Default or Unmatured Default and stating that such
notice is a "notice of default". In the event that the Agent
receives such a notice, the Agent shall give prompt notice thereof
to the Lenders.
10.10. Rights as a Lender. In the event the Agent is a
------------------
Lender, the Agent shall have the same rights and powers hereunder
and under any other Loan Document as any Lender and may exercise
the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless
the context otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend
money to, and generally engage in any kind of trust, debt, equity
or other transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with the Borrower or any of
its Subsidiaries in which the Borrower or such Subsidiary is not
restricted hereby from engaging with any other Person. The Agent,
in its individual capacity, is not obligated to remain a Lender.
10.11. Lender Credit Decision. Each Lender acknowledges that
----------------------
it has, independently and without reliance upon the Agent or any
other Lender and based on the financial statements prepared by the
Borrower and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter
into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance
upon the Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents.
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10.12. Successor Agent. The Agent may resign at any time by
---------------
giving written notice thereof to the Lenders and the Borrower,
such resignation to be effective upon the appointment of a
successor Agent and, if no Default or Unmatured Default has
occurred and is continuing, the Borrower's prior written consent,
or, if no successor Agent has been appointed, forty-five days
after the retiring Agent gives notice of its intention to resign.
Upon any such resignation, the Required Lenders shall have the
right to appoint, on behalf of the Lenders, a successor Agent. If
no successor Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty
days after the resigning Agent's giving notice of its intention to
resign, then the resigning Agent may appoint, on behalf of the
Borrower and the Lenders, a successor Agent. If the Agent has
resigned and no successor Agent has been appointed, the Lenders
may perform all the duties of the Agent hereunder and the Borrower
shall make all payments in respect of the Obligations to the
applicable Lender and for all other purposes shall deal directly
with the Lenders. No successor Agent shall be deemed to be
appointed hereunder until such successor Agent has accepted the
appointment and the Borrower has given its consent if required
hereunder. Any such successor Agent shall be a commercial bank
having capital and retained earnings of at least $50,000,000.
Upon the acceptance of any appointment as Agent hereunder by a
successor Agent and such consent by the Borrower, such successor
Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning Agent.
Upon the effectiveness of the resignation of the Agent, the
resigning Agent shall be discharged from its duties and
obligations hereunder and under the Loan Documents. After the
effectiveness of the resignation of an Agent, the provisions of
this Article X shall continue in effect for its benefit in respect
---------
of any actions taken or omitted to be taken by it while it was
acting as the Agent hereunder and under the other Loan Documents.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
------------------------
11.1. Setoff. In addition to, and without limitation of, any
------
rights of the Lenders under applicable law, if the Borrower
becomes insolvent, however evidenced, or any Default or Unmatured
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Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not
collected or available) and any other Indebtedness at any time
held or owing by any Lender to or for the credit or account of the
Borrower or any Subsidiary may be offset and applied toward the
payment of the Obligations owing to such Lender, whether or not
the Obligations, or any part hereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or
----------------
otherwise, has payment made to it upon its Loans (other than
payments received pursuant to Section 2.16(a), 3.1, 3.2 or 3.4) in
--------------- --- --- ---
a greater proportion than its pro-rata share of such Loans, such
Lender agrees, promptly upon demand, to purchase a portion of the
Loans held by the other Lenders so that after such purchase each
Lender will hold its ratable proportion of Loans. If any Lender,
whether in connection with setoff or amounts which might be
subject to setoff or otherwise, receives collateral or other
protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their Loans.
In case any such payment is disturbed by legal process, or
otherwise, appropriate further adjustments shall be made. If an
amount to be offset is to be applied to Indebtedness of the
Borrower to a Lender, other than Indebtedness evidenced by any of
the Notes held by such Lender, such amount shall be applied
ratably to such other Indebtedness and to the Indebtedness
evidenced by such Notes.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
-------------------------------------------------
12.1. Successors and Assigns. The terms and provisions of
----------------------
the Loan Documents shall be binding upon and inure to the benefit
of the Borrower and the Lenders and their respective successors
and assigns, except that (a) the Borrower shall not have the right
to assign its rights or obligations under the Loan Documents, and
(b) any assignment by any Lender must be made in compliance with
Section 12.3. Notwithstanding clause (b) of this Section, any
------------ ----------
Lender may at any time, without the consent of the Borrower or the
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Agent, assign all or any portion of its rights under this
Agreement and its Notes to a Federal Reserve Bank; provided,
however, that no such assignment to a Federal Reserve Bank shall
release the transferor Lender from its obligations hereunder. The
Agent may treat the payee of any Note as the owner thereof for all
purposes hereof unless and until such payee complies with Section
-------
12.3 in the case of an assignment thereof or, in the case of any
----
other transfer, a written notice of the transfer is filed with the
Agent. Any assignee or transferee of a Note agrees by acceptance
thereof to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who
at the time of making such request or giving such authority or
consent is the holder of any Note, shall be conclusive and binding
on any subsequent holder, transferee or assignee of such Note or
of any Note or Notes issued in exchange therefor.
12.2. Participations.
---------------
12.2.1. Permitted Participants; Effect. Any Lender
------------------------------
may, in the ordinary course of its business and in accordance with
applicable law, at any time sell to one or more banks or other
entities ("Participants") participating interests in any Loan
------------
owing to such Lender, any Note held by such Lender, any Commitment
of such Lender or any other interest of such Lender under the Loan
Documents. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's
obligations under the Loan Documents shall remain unchanged, such
Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, such Lender shall remain
the holder of any such Note for all purposes under the Loan
Documents, all amounts payable by the Borrower under this
Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrower and the Agent shall
continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the
Loan Documents.
12.2.2. Voting Rights. Each Lender shall retain the
-------------
sole right to approve, without the consent of any Participant, any
amendment, modification or waiver of any provision of the Loan
Documents other than any amendment, modification or waiver which
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effects any of the modifications referenced in clauses (a) through
(f) of Section 8.2.
-----------
12.2.3. Benefit of Setoff. The Borrower agrees that
-----------------
each Participant shall be deemed to have the right of setoff
provided in Section 11.1 in respect of its participating interest
------------
in amounts owing under the Loan Documents to the same extent as if
the amount of its participating interest were owing directly to it
as a Lender under the Loan Documents; provided, that each Lender
--------
shall retain the right of setoff provided in Section 11.1 with
------------
respect to the amount of participating interests sold to each
Participant. The Lenders agree to share with each Participant,
and each Participant, by exercising the right of setoff provided
in Section 11.1, agrees to share with each Lender, any amount
------------
received pursuant to the exercise of its right of setoff, such
amounts to be shared in accordance with Section 11.2 as if each
------------
Participant were a Lender.
12.3. Assignments.
-----------
12.3.1. Permitted Assignments. Any Lender may, in
---------------------
the ordinary course of its business and in accordance with
applicable law, at any time assign to one or more banks or other
entities ("Purchasers") all or any part of its rights and
----------
obligations under the Loan Documents; provided, however, that in
-------- -------
the case of an assignment to an entity which is not a Lender or an
Affiliate of a Lender, such assignment shall be in a minimum
amount of $5,000,000. Such assignment shall be substantially in
the form of Exhibit G hereto or in such other form as may be
---------
agreed to by the parties thereto. The consent of the Agent and,
so long as no Default is continuing, the Borrower shall be
required prior to an assignment becoming effective with respect to
a Purchaser which is not a Lender or an Affiliate thereof. Such
consent shall not be unreasonably withheld.
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12.3.2. Effect; Effective Date. Upon (a) delivery to
----------------------
the Agent by the transferor Lender of a notice of assignment,
substantially in the form attached as Exhibit I to Exhibit G
--------- ---------
hereto (a "Notice of Assignment"), together with any consents
--------------------
required by Section 12.3.1, and (b) payment by the transferor
--------------
Lender of a $3,000 fee to the Agent for processing such
assignment, such assignment shall become effective on the
effective date specified in such Notice of Assignment. On and
after the effective date of such assignment, (a) such Purchaser
shall for all purposes be a Lender party to this Agreement and any
other Loan Document executed by the Lenders and shall have all the
rights and obligations of a Lender under the Loan Documents, to
the same extent as if it were an original party hereto, and (b)
the transferor Lender shall be released with respect to the
percentage of the Aggregate Commitment and Loans assigned to such
Purchaser without any further consent or action by the Borrower,
the Lenders or the Agent. Upon the consummation of any assignment
to a Purchaser pursuant to this Section 12.3.2, the transferor
--------------
Lender, the Agent and the Borrower shall make appropriate
arrangements so that replacement Notes are issued to such
transferor Lender and new Notes or, as appropriate, replacement
Notes, are issued to such Purchaser, in each case in principal
amounts reflecting their respective Commitments, as adjusted
pursuant to such assignment.
12.4. Dissemination of Information. The Borrower authorizes
----------------------------
each Lender to disclose to any Participant or Purchaser or any
other Person acquiring an interest in the Loan Documents by
operation of law (each a "Transferee") and any prospective
----------
Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its
Subsidiaries.
12.5. Tax Treatment. If any interest in any Loan Document is
-------------
transferred to any Transferee which is organized under the laws of
any jurisdiction other than the United States or any State
thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, to comply
with the provisions of Section 2.16(b).
---------------
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ARTICLE XIII
NOTICES
-------
13.1. Giving Notice. Except as otherwise permitted by
-------------
Section 2.11 with respect to borrowing notices, all notices and
------------
other communications provided to any party hereto under this
Agreement or any other Loan Document shall be in writing, by
facsimile, first class U.S. mail or overnight courier and
addressed or delivered to such party at its address set forth
below its signature hereto or at such other address as may be
designated by such party in a notice to the other parties given
pursuant to this Section 13.1. Any notice, if mailed and properly
------------
addressed with first class postage prepaid, return receipt
requested, shall be deemed given three (3) Business Days after
deposit in the U.S. mail; any notice, if transmitted by facsimile,
shall be deemed given when transmitted; and any notice given by
overnight courier shall be deemed given when received by the
addressee.
13.2. Change of Address. The Borrower, the Agent and any
-----------------
Lender may each change the address for service of notice upon it
by a notice in writing to the other parties hereto.
[signature pages to follow]
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IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent
have executed this Agreement as of the date first above written.
URC HOLDINGS CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment $10,000,000 THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
Address: One First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-89-
Commitment $10,000,000 THE FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Print Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment $9,000,000 MELLON BANK, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: First Vice President
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-90-
Commitment $7,000,000 THE NORTHERN TRUST COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address: ▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment $7,000,000 SANWA BANK CALIFORNIA
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
(▇▇-▇)
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-91-
Commitment $7,000,000 UNION BANK OF CALIFORNIA, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Initial
Aggregate
Commitment $50,000,000
----------
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