Exhibit 10.2
REVOLVING CREDIT AND TERM LOAN AGREEMENT
DATED AS OF JANUARY 12, 2006
AMONG
FIRST ACCEPTANCE CORPORATION
AS BORROWER
THE LENDERS FROM TIME TO TIME PARTY HERETO
AND
SUNTRUST BANK
AS ADMINISTRATIVE AGENT
SUNTRUST ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
A DIVISION OF SUNTRUST CAPITAL MARKETS, INC.
AS LEAD ARRANGER
ARTICLE I DEFINITIONS; CONSTRUCTION........................................ 1
Section 1.1 Definitions............................................... 1
Section 1.2 Classifications of Loans and Borrowings................... 19
Section 1.3 Accounting Terms and Determination........................ 19
Section 1.4 Terms Generally........................................... 19
ARTICLE II AMOUNT AND TERMS OF THE COMMITMENTS............................. 20
Section 2.1 General Description of Facilities......................... 20
Section 2.2 Revolving Loans........................................... 20
Section 2.3 Procedure for Revolving Borrowings........................ 20
Section 2.4 Swingline Commitment...................................... 21
Section 2.5 Procedure for Swingline Borrowing; Etc.................... 21
Section 2.6 Intentionally Omitted..................................... 22
Section 2.7 Term Loan Commitments..................................... 22
Section 2.8 Funding of Borrowings..................................... 23
Section 2.9 Interest Elections........................................ 24
Section 2.10 Optional Reduction and Termination of Commitments......... 25
Section 2.11 Repayment of Loans........................................ 25
Section 2.12 Evidence of Indebtedness.................................. 26
Section 2.13 Optional Prepayments...................................... 27
Section 2.14 Interest on Loans......................................... 27
Section 2.15 Fees...................................................... 28
Section 2.16 Computation of Interest and Fees.......................... 29
Section 2.17 Inability to Determine Interest Rates..................... 29
Section 2.18 Illegality................................................ 29
Section 2.19 Increased Costs........................................... 30
Section 2.20 Funding Indemnity......................................... 31
Section 2.21 Taxes..................................................... 32
Section 2.22 Payments Generally; Pro Rata Treatment; Sharing of
Set-offs............................................... 33
Section 2.23 Mitigation of Obligations................................. 35
Section 2.24 Letters of Credit......................................... 35
ARTICLE III CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT............ 39
Section 3.1 Conditions To Effectiveness............................... 39
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Section 3.2 Each Credit Event......................................... 42
Section 3.3 Delivery of Documents..................................... 42
ARTICLE IV REPRESENTATIONS AND WARRANTIES.................................. 42
Section 4.1 Existence; Power.......................................... 42
Section 4.2 Organizational Power; Authorization....................... 43
Section 4.3 Governmental Approvals; No Conflicts...................... 43
Section 4.4 Financial Statements...................................... 43
Section 4.5 Litigation and Environmental Matters...................... 43
Section 4.6 Compliance with Laws and Agreements....................... 44
Section 4.7 Investment Company Act, Etc............................... 44
Section 4.8 Taxes..................................................... 44
Section 4.9 Margin Regulations........................................ 44
Section 4.10 ERISA..................................................... 44
Section 4.11 Ownership of Property..................................... 45
Section 4.12 Disclosure................................................ 45
Section 4.13 Labor Relations........................................... 45
Section 4.14 Subsidiaries.............................................. 45
Section 4.15 Acquisition Matters....................................... 46
Section 4.16 Foreign Assets Control Regulations, etc................... 46
Section 4.17 Licenses.................................................. 46
ARTICLE V AFFIRMATIVE COVENANTS............................................ 47
Section 5.1 Financial Statements and Other Information................ 47
Section 5.2 Notices of Material Events................................ 49
Section 5.3 Existence; Conduct of Business............................ 49
Section 5.4 Compliance with Laws, Etc................................. 49
Section 5.5 Payment of Obligations.................................... 49
Section 5.6 Books and Records......................................... 50
Section 5.7 Visitation, Inspection, Etc............................... 50
Section 5.8 Maintenance of Properties; Insurance...................... 50
Section 5.9 Use of Proceeds and Letters of Credit..................... 50
Section 5.10 Additional Subsidiaries................................... 50
Section 5.11 Additional Accounts....................................... 51
ARTICLE VI FINANCIAL COVENANTS............................................. 51
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Section 6.1 Fixed Charge Coverage Ratio............................... 51
Section 6.2 Consolidated Tangible Net Worth........................... 51
Section 6.3 Net Premiums Written to Surplus........................... 51
Section 6.4 Combined Ratio............................................ 51
Section 6.5 Minimum Risk Based Capital Ratio.......................... 51
ARTICLE VII NEGATIVE COVENANTS............................................. 52
Section 7.1 Indebtedness.............................................. 52
Section 7.2 Negative Pledge........................................... 52
Section 7.3 Fundamental Changes....................................... 54
Section 7.4 Investments, Loans, Etc................................... 54
Section 7.5 Restricted Payments....................................... 55
Section 7.6 Sale of Assets............................................ 55
Section 7.7 Transactions with Affiliates.............................. 56
Section 7.8 Restrictive Agreements.................................... 56
Section 7.9 Sale and Leaseback Transactions........................... 56
Section 7.10 Hedging Agreements........................................ 56
Section 7.11 Amendment to Material Documents........................... 56
Section 7.12 Accounting Changes........................................ 57
Section 7.13 Capital Expenditures...................................... 57
ARTICLE VIII EVENTS OF DEFAULT............................................. 57
Section 8.1 Events of Default......................................... 57
ARTICLE IX THE ADMINISTRATIVE AGENT........................................ 60
Section 9.1 Appointment of Administrative Agent....................... 60
Section 9.2 Nature of Duties of Administrative Agent.................. 60
Section 9.3 Lack of Reliance on the Administrative Agent.............. 61
Section 9.4 Certain Rights of the Administrative Agent................ 61
Section 9.5 Reliance by Administrative Agent.......................... 61
Section 9.6 The Administrative Agent in its Individual Capacity....... 62
Section 9.7 Successor Administrative Agent............................ 62
ARTICLE X MISCELLANEOUS.................................................... 63
Section 10.1 Notices................................................... 63
Section 10.2 Waiver; Amendments........................................ 64
Section 10.3 Expenses; Indemnification................................. 65
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Section 10.4 Successors and Assigns.................................... 67
Section 10.5 Governing Law; Jurisdiction; Consent to Service of
Process................................................ 70
Section 10.6 WAIVER OF JURY TRIAL...................................... 70
Section 10.7 Right of Setoff........................................... 71
Section 10.8 Counterparts; Integration................................. 71
Section 10.9 Survival.................................................. 71
Section 10.10 Severability.............................................. 72
Section 10.11 Confidentiality........................................... 72
Section 10.12 Interest Rate Limitation.................................. 72
Exhibits
Exhibit A - Revolving Credit Note
Exhibit B - Term Note
Exhibit C - Swingline Note
Exhibit D - Form of Assignment and Acceptance
Exhibit E - Form of Subsidiary Guarantee Agreement
Exhibit F - Form of Indemnity, Subrogation and Contribution
Agreement
Exhibit 2.3 - Notice of Revolving Borrowing
Exhibit 2.5 - Notice of Swingline Borrowing
Exhibit 2.9 - Form of Continuation/Conversion
Exhibit 3.1(b)(iv) - Form of Secretary's Certificate
Exhibit 3.1(b)(vii) - Form of Officer's Certificate
Schedules
Schedule 4.5 Litigation
Schedule 4.14 Subsidiaries
Schedule 7.1 Outstanding Indebtedness
Schedule 7.2 Existing Liens
Schedule 7.4 Existing Investments
Schedule 7.7 Affiliate Transactions
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REVOLVING CREDIT AND TERM LOAN AGREEMENT
THIS REVOLVING CREDIT AND TERM LOAN AGREEMENT (this "Agreement") is made
and entered into as of January 12, 2006, by and among FIRST ACCEPTANCE
CORPORATION, a Delaware corporation (the "Borrower"), SUNTRUST BANK, FIRST BANK
and the several other banks and other financial institutions from time to time
party hereto (the "Lenders"), and SUNTRUST BANK, in its capacity as
Administrative Agent for the Lenders (the "Administrative Agent").
WITNESSETH:
WHEREAS, the Borrower has requested that the Lenders establish a $5,000,000
revolving credit facility and make term loans in an aggregate principal amount
equal to $25,000,000 to the Borrower;
WHEREAS, subject to the terms and conditions of this Agreement, the Lenders
severally, to the extent of their respective Commitments, are willing to
establish the requested revolving credit facility and severally to make the term
loans to the Borrower.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the Borrower, the Lenders and the Administrative Agent agree
as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
SECTION 1.1 Definitions. In addition to the other terms defined herein, the
following terms used herein shall have the meanings herein specified (to be
equally applicable to both the singular and plural forms of the terms defined):
"ACQUISITION" shall mean the transactions as set forth in and as
contemplated by the Purchase Agreement.
"ADJUSTED LIBO RATE" shall mean, with respect to each Interest Period for a
Eurodollar Borrowing, the rate per annum obtained by dividing (i) LIBOR for such
Interest Period by (ii) a percentage equal to 1.00 minus the Eurodollar Reserve
Percentage.
"ADMINISTRATIVE AGENT" shall have the meaning assigned to such term in the
opening paragraph hereof.
"ADMINISTRATIVE QUESTIONNAIRE" shall mean, with respect to each Lender, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent duly completed by such Lender.
"AFFILIATE" shall mean, as to any Person, any other Person that directly,
or indirectly through one or more intermediaries, Controls, is Controlled by, or
is under common Control with, such Person.
"AGGREGATE REVOLVING COMMITMENTS" shall mean the sum of the Revolving
Commitments of all Lenders at any time outstanding. On the Closing Date, the
Aggregate Revolving Commitments shall equal $5,000,000.
"APPLICABLE LENDING OFFICE" shall mean, for each Lender and for each Type
of Loan, the "Lending Office" of such Lender (or an Affiliate of such Lender)
designated for such Type of Loan in the Administrative Questionnaire submitted
by such Lender or such other office of such Lender (or an Affiliate of such
Lender) as such Lender may from time to time specify to the Administrative Agent
and the Borrower as the office by which its Loans of such Type are to be made
and maintained.
"APPLICABLE MARGIN" shall mean for all Loans outstanding on any date, 0.25%
per annum with respect to Base Rate Loans and 1.75% per annum with respect to
Eurodollar Loans.
"APPLICABLE PERCENTAGE" shall mean, with respect to the Commitment Fee, as
of any date, 0.25% per annum and with respect to the Letter of Credit Fee, as of
any date, the percentage per annum determined by reference to the Applicable
Margin for Eurodollar Loans in effect on such date.
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.4(b)) and accepted by the Administrative Agent, in the
form of Exhibit D attached hereto or any other form approved by the
Administrative Agent.
"AUTHORIZED CONTROL LEVEL RISK-BASED CAPITAL" shall have the meaning
ascribed to such term in the Statutory Statements of an Insurance Company for
such period, determined in accordance with SAP.
"AVAILABILITY PERIOD" shall mean the period from the Closing Date to the
Commitment Termination Date.
"BASE RATE" shall mean the higher of (i) the per annum rate which the
Administrative Agent publicly announces from time to time to be its prime
lending rate, as in effect from time to time, and (ii) the Federal Funds Rate,
as in effect from time to time, plus one-half of one percent (0.50%). The
Administrative Agent's prime lending rate is a reference rate and does not
necessarily represent the lowest or best rate charged to customers. The
Administrative Agent may make commercial loans or other loans at rates of
interest at, above or below the Administrative Agent's prime lending rate. Each
change in the Administrative Agent's prime lending rate shall be effective from
and including the date such change is publicly announced as being effective.
"BORROWER" shall have the meaning in the introductory paragraph hereof.
"BORROWER SECURITY AGREEMENT" shall mean that certain Security Agreement
dated as of the Closing Date, executed by the Borrower as debtor and by the
Administrative Agent as secured party thereunder, for the benefit of Lenders,
and any amendments thereto or restatements thereof.
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"BORROWING" shall mean a borrowing consisting of (i) Loans of the same
Class and Type, made, converted or continued on the same date and in case of
Eurodollar Loans, as to which a single Interest Period is in effect, or (ii) a
Swingline Loan.
"BUSINESS DAY" shall mean (i) any day other than a Saturday, Sunday or
other day on which commercial banks in Atlanta, Georgia or Nashville, Tennessee
are authorized or required by law to close and (ii) if such day relates to a
Borrowing of, a payment or prepayment of principal or interest on, a conversion
of or into, or an Interest Period for, a Eurodollar Loan or a notice with
respect to any of the foregoing, any day on which dealings in Dollars are
carried on in the London interbank market.
"CAPITAL EXPENDITURES" shall mean for any period, without duplication, (a)
the additions to property, plant and equipment and other capital expenditures of
the Borrower and its Subsidiaries that are (or would be) set forth on a
consolidated statement of cash flows of the Borrower for such period prepared in
accordance with GAAP and (b) Capital Lease Obligations incurred by the Borrower
and its Subsidiaries during such period. Capital Expenditures shall not include
the Acquisition.
"CAPITAL LEASE OBLIGATIONS" of any Person shall mean all obligations of
such Person to pay rent or other amounts under any lease (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"CHANGE IN CONTROL" shall mean the occurrence of one or more of the
following events: (a) any sale, exchange or other transfer (in a single
transaction or a series of related transactions) of all or substantially all of
the assets of the Borrower to any Person or "group" (within the meaning of the
Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder in effect on the date hereof), (b) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any Person or
"group" (within the meaning of the Securities Exchange Act of 1934 and the rules
of the Securities and Exchange Commission thereunder as in effect on the date
hereof) which are not currently shareholders, of 50% or more of the outstanding
shares of the voting stock of the Borrower; or (c) occupation of a majority of
the seats (other than vacant seats) on the board of directors of the Borrower by
Persons who were neither (i) nominated by the current board of directors or (ii)
appointed by directors so nominated; or (d) any sale, exchange or other transfer
of the voting shares of the Borrower held by ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., which would cause the disallowance of
Borrower's existing net operating losses due to a failure to maintain
"continuity of interest" as such term would be determined under the application
Section 368 of the Code; or (e) the sale by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, of more than
50% of his voting shares of the Borrower, except transfers by descent or
distribution upon his death and subsequent transfers by such descendents or
distributees.
"CHANGE IN LAW" shall mean (i) the adoption of any applicable law, rule or
regulation after the date of this Agreement, (ii) any change in any applicable
law, rule or regulation, or any change in the interpretation or application
thereof, by any Governmental Authority after the date
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of this Agreement, or (iii) compliance by any Lender (or its Applicable Lending
Office) or the Issuing Bank (or for purposes of Section 2.19, by such Lender's
or the Issuing Bank's holding company, if applicable) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"CLASS", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Swingline Loans or Term Loans and when used in reference to any Commitment,
refers to whether such Commitment is a Revolving Commitment, a Swingline
Commitment or a Term Loan Commitment.
"CLOSING DATE" shall mean the date on which the conditions precedent set
forth in Section 3.1 and Section 3.2 have been satisfied or waived in accordance
with Section 10.2.
"CODE" shall mean the Internal Revenue Code of 1986, as amended and in
effect from time to time.
"COLLATERAL ASSIGNMENT OF LIFE INSURANCE" shall mean the Collateral
Assignment of Policy in form and substance reasonably satisfactory to the
Administrative Agent to be executed by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ as the insured, the
Borrower as the owner of the policy (with a face amount not less than
$5,000,000) and acknowledged by the insurer, naming the Administrative Agent as
assignee thereunder for the benefit of the Lenders.
"COMBINED RATIO" shall mean for an Insurance Company, the sum of its Loss
Ratio and its Expense Ratio determined in accordance with GAAP for such period.
"COMMITMENT" shall mean a Revolving Commitment, a Swingline Commitment or a
Term Loan Commitment or any combination thereof (as the context shall permit or
require).
"COMMITMENT TERMINATION DATE" shall mean the earliest of (i) June 30, 2010,
(ii) the date on which the Revolving Commitments are terminated pursuant to
Section 2.10 and (iii) the date on which all amounts outstanding under this
Agreement have been declared or have automatically become due and payable
(whether by acceleration or otherwise).
"CONSOLIDATED EBITDA" shall mean, for the Borrower and its Subsidiaries for
any period, an amount equal to the sum of (a) Consolidated Net Income for such
period plus (b) to the extent deducted in determining Consolidated Net Income
for such period, (i) Consolidated Interest Expense, (ii) tax expense, (iii)
depreciation and amortization (excluding amortization of policy costs) and (iv)
all other non-cash charges, determined on a consolidated basis in accordance
with GAAP in each case for such period.
"CONSOLIDATED EBITDAR" shall mean, for the Borrower and its Subsidiaries
for any period, an amount equal to the sum of (a) Consolidated EBITDA and (b)
Consolidated Lease Expense.
"CONSOLIDATED FIXED CHARGES" shall mean, for the Borrower and its
Subsidiaries for any period, the sum (without duplication) of (a) Consolidated
Interest Expense for such period (including non-use fees and letter of credit
fees paid under this Agreement), (b) scheduled
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principal payments made on Consolidated Total Debt during such period after
giving effect to any reductions for prepayments, and (c) Consolidated Lease
Expense for such period.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for the Borrower and its
Subsidiaries for any period determined on a consolidated basis in accordance
with GAAP, the sum of (i) total cash interest expense, including without
limitation the interest component of any payments in respect of Capital Leases
Obligations capitalized or expensed during such period (whether or not actually
paid during such period) plus (ii) the net amount payable (or minus the net
amount receivable) under Hedging Agreements during such period (whether or not
actually paid or received during such period).
"CONSOLIDATED LEASE EXPENSE" shall mean, for any period, the aggregate
amount of fixed and contingent rentals payable by the Borrower and its
Subsidiaries with respect to leases of real and personal property (excluding
Capital Lease Obligations) determined on a consolidated basis in accordance with
GAAP for such period.
"CONSOLIDATED NET INCOME" shall mean, for any period, the net income (or
loss) of the Borrower and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, but excluding therefrom (to the
extent otherwise included therein) (i) any extraordinary, unusual and
non-recurring gains or losses, (ii) any gains attributable to write-ups of
assets and (iii) any equity interest of the Borrower or any Subsidiary of the
Borrower in the unremitted earnings of any Person that is not a Subsidiary and
(iv) any income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary or is merged into or consolidated with the Borrower or any Subsidiary
on the date that such Person's assets are acquired by the Borrower or any
Subsidiary.
"CONSOLIDATED TANGIBLE NET WORTH" shall mean, as of any date, (i) the total
assets of the Borrower and its Subsidiaries that would be reflected on the
Borrower's consolidated balance sheet as of such date prepared in accordance
with GAAP, after eliminating all amounts properly attributable to minority
interests, if any, in the stock and surplus of Subsidiaries, minus the sum of
(i) the total liabilities of the Borrower and its Subsidiaries that would be
reflected on the Borrower's consolidated balance sheet as of such date prepared
in accordance with GAAP, (ii) the amount of any write-up in the book value of
any assets resulting from a revaluation thereof or any write-up in excess of the
cost of such assets acquired reflected on the consolidated balance sheet of the
Borrower as of such date prepared in accordance with GAAP and (iii) the net book
amount of all assets of the Borrower and its Subsidiaries that would be
classified as intangible assets on a consolidated balance sheet of the Borrower
as of such date prepared in accordance with GAAP.
"CONSOLIDATED TOTAL DEBT" shall mean, as of any date of determination, all
Indebtedness of the Borrower and its Subsidiaries that would be reflected on a
consolidated balance sheet of the Borrower prepared in accordance with GAAP as
of such date.
"CONTROL" shall mean the power, directly or indirectly, either to (i) vote
10% or more of securities having ordinary voting power for the election of
directors (or persons performing similar functions) of a Person or (ii) direct
or cause the direction of the management and policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. The
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terms "CONTROLLING", "CONTROLLED BY", and "UNDER COMMON CONTROL WITH" have
meanings correlative thereto.
"DEFAULT" shall mean any condition or event described in Section 8.1 that,
with the giving of notice or the lapse of the applicable cure period (if any) or
both, would constitute an Event of Default.
"DEFAULT INTEREST" shall have the meaning set forth in Section 2.14(d).
"DOLLAR(S)" and the sign "$" shall mean lawful money of the United States
of America.
"ENVIRONMENTAL LAWS" shall mean all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, Release or threatened Release of any
Hazardous Material.
"ENVIRONMENTAL LIABILITY" shall mean any liability, contingent or otherwise
(including any liability for damages, costs of environmental investigation and
remediation, costs of administrative oversight, fines, natural resource damages,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) any actual or alleged violation of
any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) any actual or
alleged exposure to any Hazardous Materials, (d) the Release or threatened
Release of any Hazardous Materials or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA AFFILIATE" shall mean any trade or business (whether or not
incorporated), which, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for the purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA EVENT" shall mean (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator appointed by the PBGC of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any
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Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"EURODOLLAR" when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, bears interest at a
rate determined by reference to the Adjusted LIBO Rate.
"EURODOLLAR RESERVE PERCENTAGE" shall mean the aggregate of the maximum
reserve percentages (including, without limitation, any emergency, supplemental,
special or other marginal reserves) expressed as a decimal (rounded upwards to
the next 1/100th of 1%) in effect on any day to which the Administrative Agent
is subject with respect to the Adjusted LIBO Rate pursuant to regulations issued
by the Board of Governors of the Federal Reserve System (or any Governmental
Authority succeeding to any of its principal functions) with respect to
eurocurrency funding (currently referred to as "eurocurrency liabilities" under
Regulation D). Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under Regulation D. The Eurodollar Reserve Percentage shall
be adjusted automatically on and as of the effective date of any change in any
reserve percentage.
"EVENT OF DEFAULT" shall have the meaning provided in Article VIII.
"EXCLUDED TAXES" shall mean with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.23, any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender's failure to comply with Section 2.21(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.21(a).
"EXPENSE RATIO" shall mean for an Insurance Company, the ratio (expressed
as a percentage) of Underwriting Expenses (less Fee Income/Finance Service
Charges Not Included in Premiums and ceding commissions from reinsurers) to Net
Premiums Earned for such period, determined in accordance with GAAP.
"FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the next 1/100th of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with member banks of the
Federal Reserve System arranged by
7
Federal funds brokers, as published by the Federal Reserve Bank of New York on
the next succeeding Business Day or if such rate is not so published for any
Business Day, the Federal Funds Rate for such day shall be the average rounded
upwards, if necessary, to the next 1/100th of 1% of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by the Administrative Agent.
"FEE INCOME/FINANCE AND SERVICE CHARGES NOT INCLUDED IN PREMIUMS" shall
have the meaning ascribed to such term in the Statutory Statements of an
Insurance Company (including motor club fees received from Affiliates),
determined in accordance with GAAP for such period.
"FIXED CHARGE COVERAGE RATIO" shall mean, for any period of four
consecutive fiscal quarters of the Borrower, the ratio of (a) Consolidated
EBITDAR for such period to (b) the actual amount paid by the Borrower and its
Subsidiaries in cash during such period on account of Consolidated Fixed Charges
for such period.
"FOREIGN LENDER" shall mean any Lender that is organized under the laws of
a jurisdiction other than that of the Borrower. For purposes of this definition,
the United States of America or any State thereof or the District of Columbia
shall constitute one jurisdiction.
"GAAP" shall mean generally accepted accounting principles in the United
States applied on a consistent basis and subject to the terms of Section 1.3.
"GOVERNMENTAL AUTHORITY" shall mean the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"GUARANTEE" of or by any Person (the "GUARANTOR") shall mean any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly and including any obligation, direct or indirect, of the guarantor
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any Letter of Credit or letter of guaranty issued in support of
such Indebtedness or obligation; provided, that the term "Guarantee" shall not
include endorsements for collection or deposits in the ordinary course of
business. The amount of any Guarantee shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
Guarantee is made or, if not so stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith. The term
"Guarantee" used as a verb has a corresponding meaning.
8
"HAZARDOUS MATERIALS" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"HEDGING AGREEMENTS" shall mean interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap agreements,
currency future or option contracts, commodity agreements and other similar
agreements or arrangements designed to protect against fluctuations in interest
rates, currency values or commodity values.
"INDEBTEDNESS" of any Person shall mean, without duplication (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person in respect of the deferred purchase price of
property or services (other than trade payables incurred in the ordinary course
of business; provided, that solely for purposes of Section 8.1(f), trade
payables overdue by more than 180 days shall be included in this definition
except to the extent that any of such trade payables are being disputed in good
faith and by appropriate measures), (iv) all obligations of such Person under
any conditional sale or other title retention agreement(s) relating to property
acquired by such Person, (v) all Capital Lease Obligations of such Person, (vi)
all obligations, contingent or otherwise, of such Person in respect of Letters
of Credit, acceptances or similar extensions of credit, (vii) all Guarantees of
such Person of the type of Indebtedness described in clauses (i) through (vi)
above, (viii) all Indebtedness of a third party secured by any Lien on property
owned by such Person, whether or not such Indebtedness has been assumed by such
Person, (ix) all obligations of such Person, contingent or otherwise, to
purchase, redeem, retire or otherwise acquire for value any common or preferred
stock of such Person, excluding such obligations to purchase, redeem, retire or
acquire which by their terms are not effective until after the Maturity Date,
(x) Off-Balance Sheet Liabilities and (xi) obligations under Hedging Agreements.
The Indebtedness of any Person shall include the Indebtedness of any partnership
or joint venture in which such Person is a general partner or a joint venturer,
except to the extent that the terms of such Indebtedness provide that such
Person is not liable therefor. Indebtedness shall not include any obligations
relating to overdraft protection.
"INDEMNIFIED TAXES" shall mean Taxes other than Excluded Taxes.
"INDEMNITY AND CONTRIBUTION AGREEMENT" shall mean the Indemnity,
Subrogation and Contribution Agreement, substantially in the form of Exhibit F,
among the Borrower, the Subsidiary Loan Parties and the Administrative Agent.
"INSURANCE COMPANY" shall mean any Subsidiary which is engaged in the
insurance business other than exclusively as an agency. As of the Closing Date,
only First Acceptance Insurance Company, Inc. and Village Auto Insurance
Company, Inc. constitute Insurance Companies.
"INTEREST PERIOD" shall mean (i) with respect to any Eurodollar Borrowing,
a period of one, two, three or six months and (ii) with respect to a Swingline
Loan, a period of such duration,
9
as the Borrower may request and the Swingline Lender may agree in accordance
with Section 2.5; provided, that:
(i) the initial Interest Period for such Borrowing shall commence on
the date of such Borrowing (including the date of any conversion from a
Borrowing of another Type) and each Interest Period occurring thereafter in
respect of such Borrowing shall commence on the day on which the next
preceding Interest Period expires;
(ii) if any Interest Period would otherwise end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day, unless, in the case of a Eurodollar Borrowing, such Business
Day falls in another calendar month, in which case such Interest Period
would end on the next preceding Business Day;
(iii) any Interest Period in respect of a Eurodollar Borrowing which
begins on the last Business Day of a calendar month or on a day for which
there is no numerically corresponding day in the calendar month at the end
of such Interest Period shall end on the last Business Day of such calendar
month;
(iv) each principal installment of the Term Loans shall have an
Interest Period ending on each installment payment date and the remaining
principal balance (if any) of the Term Loans shall have an Interest Period
determined as set forth above; and
(v) no Interest Period may extend beyond the Commitment Termination
Date, the Maturity Date or the Swingline Termination Date, as the case may
be.
"ISSUING BANK" shall mean SunTrust Bank in its capacity as an issuer of
Letters of Credit pursuant to Section 2.24.
"LC COMMITMENT" shall mean that portion of the Aggregate Revolving
Commitments that may be used by the Borrower for the issuance of Letters of
Credit in an aggregate face amount not to exceed $5,000,000.
"LC DISBURSEMENT" shall mean a payment made by the Issuing Bank pursuant to
a Letter of Credit.
"LC DOCUMENTS" shall mean the Letters of Credit and all applications,
agreements and instruments relating to the Letters of Credit.
"LC EXPOSURE" shall mean, at any time, the sum of (i) the aggregate undrawn
amount of all outstanding Letters of Credit at such time, plus (ii) the
aggregate amount of all LC Disbursements that have not been reimbursed by or on
behalf of the Borrower at such time. The LC Exposure of any Lender shall be its
Pro Rata Share of the total LC Exposure at such time.
"LENDERS" shall have the meaning assigned to such term in the opening
paragraph of this Agreement and shall include, where appropriate, the Swingline
Lender.
10
"LETTER(S) OF CREDIT" shall mean any Letter of Credit issued pursuant to
Section 2.24 by the Issuing Bank for the account of the Borrower pursuant to the
LC Commitment.
"LIBOR" shall mean, for any applicable Interest Period with respect to any
Eurodollar Loan, the rate per annum for deposits in Dollars for a period equal
to such Interest Period appearing on the display designated as Page 3750 on the
Dow ▇▇▇▇▇ Markets Service (or such other page on that service or such other
service designated by the British Banker's Association for the display of such
Association's Interest Settlement Rates for Dollar deposits) as of 11:00 a.m.
(London, England time) on the day that is two Business Days prior to the first
day of the Interest Period or if such Page 3750 is unavailable for any reason at
such time, the rate which appears on the Reuters Screen ISDA Page as of such
date and such time; provided, that if the Administrative Agent determines that
the relevant foregoing sources are unavailable for the relevant Interest Period,
LIBOR shall mean the rate of interest determined by the Administrative Agent to
be the average (rounded upward, if necessary, to the nearest 1/100th of 1%) of
the rates per annum at which deposits in Dollars are offered to the
Administrative Agent two (2) Business Days preceding the first day of such
Interest Period by leading banks in the London interbank market as of 10:00 a.
m. for delivery on the first day of such Interest Period, for the number of days
comprised therein and in an amount comparable to the amount of the Eurodollar
Loan of the Administrative Agent.
"LIEN" shall mean any mortgage, pledge, security interest, lien (statutory
or otherwise), charge, encumbrance, hypothecation, assignment, deposit
arrangement, or other arrangement having the practical effect of the foregoing
or any other security agreement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any capital lease having
the same economic effect as any of the foregoing).
"LICENSE" means any license, certificate of authority, permit or other
authorization which is required to be obtained by an Insurance Company from a
Governmental Authority in connection with the operation, ownership or
transaction of its insurance operations and activities.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the Notes, the
Security Documents, the LC Documents, all Notices of Borrowing, the Subsidiary
Guarantee Agreement, the Indemnity and Contribution Agreement, and any and all
other instruments, agreements, documents and writings executed in connection
with any of the foregoing; provided that Loan Documents shall not include any
documents or agreements related to cash management arrangements or permitted
Hedging Agreements.
"LOAN PARTIES" shall mean the Borrower and the Subsidiary Loan Parties.
"LOANS" shall mean all Revolving Loans, Swingline Loans and Term Loans in
the aggregate or any of them, as the context shall require.
"LOSS ADJUSTMENT EXPENSES" shall have the meaning ascribed to such term in
the Statutory Statements of an Insurance Company, determined in accordance with
SAP for such period.
11
"LOSS RATIO" shall mean for an Insurance Company, the ratio (expressed as a
percentage) of Losses and Loss Adjustment Expenses incurred to Net Premiums
Earned for such period, determined in accordance with SAP.
"LOSSES" shall have the meaning ascribed to such term in the Statutory
Statements of an Insurance Company, determined in accordance with SAP for such
period.
"MATERIAL ADVERSE EFFECT" shall mean, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other related event or events, act or
acts, condition or conditions, occurrence or occurrences, a material adverse
change in, or a material adverse effect on, (i) the business, results of
operations, financial condition, assets or liabilities of the Borrower and its
Subsidiaries taken as a whole, (ii) the ability of the Loan Parties to perform
their respective obligations under any material Loan Documents, (iii) the rights
and remedies of the Administrative Agent, the Issuing Bank and the Lenders under
any material Loan Documents or (iv) the legality, validity or enforceability of
any material Loan Documents.
"MATERIAL INDEBTEDNESS" shall mean Indebtedness (other than the Loans and
Letters of Credit) or obligations in respect of one or more Hedging Agreements,
of any one or more of the Borrower and the Subsidiaries in an aggregate
principal amount exceeding $1,000,000. For purposes of determining Material
Indebtedness, the "principal amount" of the obligations of the Borrower or any
Subsidiary in respect to any Hedging Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that the Borrower or
such Subsidiary would be required to pay if such Hedging Agreement were
terminated at such time.
"MATURITY DATE" shall mean, with respect to the Term Loans, the earlier of
(i) June 30, 2010 or (ii) the date on which the principal amount of all
outstanding Term Loans have been declared or automatically have become due and
payable (whether by acceleration or otherwise).
"MOODY'S" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"MULTIEMPLOYER PLAN" shall have the meaning set forth in Section 4001(a)(3)
of ERISA.
"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 commissions and similar Governmental
Authorities of the various states of the United States of America toward the
promotion of uniformity in the practices of such Governmental Authorities.
"NET PREMIUMS EARNED" shall have the meaning ascribed to such term in the
Statutory Statements of an Insurance Company, determined in accordance with SAP
for such period.
"NET PREMIUMS WRITTEN" shall have the meaning ascribed to such term in the
Statutory Statements of an Insurance Company, determined in accordance with SAP
for such period.
"NOTES" shall mean, collectively, the Revolving Credit Notes, the Swingline
Note and the Term Notes.
12
"NOTICES OF BORROWING" shall mean, collectively, the Notices of Revolving
Borrowing and the Notices of Swingline Borrowing.
"NOTICE OF CONVERSION/CONTINUATION" shall mean the notice given by the
Borrower to the Administrative Agent in respect of the conversion or
continuation of an outstanding Borrowing as provided in Section 2.9(b) hereof.
"NOTICE OF REVOLVING BORROWING" shall have the meaning as set forth in
Section 2.3.
"NOTICE OF SWINGLINE BORROWING" shall have the meaning as set forth in
Section 2.5.
"OBLIGATIONS" shall mean all amounts owing by the Borrower to the
Administrative Agent, the Issuing Bank or any Lender (including the Swingline
Lender) pursuant to or in connection with this Agreement or any other Loan
Document, including without limitation, all principal, interest (including any
interest accruing after the filing of any petition in bankruptcy or the
commencement of any insolvency, reorganization or like proceeding relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding), all reimbursement obligations, fees, expenses,
indemnification and reimbursement payments, costs and expenses (including all
fees and expenses of counsel to the Administrative Agent and any Lender
(including the Swingline Lender) incurred pursuant to this Agreement or any
other Loan Document), whether direct or indirect, absolute or contingent,
liquidated or unliquidated, now existing or hereafter arising hereunder or
thereunder, together with all renewals, extensions, modifications or
refinancings thereof; provided that Obligations shall not include obligations
relating to separate cash management arrangements or permitted Hedging
Agreements, except for the purpose of determining which obligations of the
Borrower and its Subsidiaries are secured by Liens granted in any Security
Documents.
"OFF-BALANCE SHEET LIABILITIES" of any Person shall mean (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability of such Person under any sale
and leaseback transactions which do not create a liability on the balance sheet
of such Person, (iii) any liability of such Person under any so-called
"synthetic" lease transaction or (iv) any obligation arising with respect to any
other transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheet of such
Person.
"OTHER TAXES" shall mean any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
"PARTICIPANT" shall have the meaning set forth in Section 10.4(c).
"PAYMENT OFFICE" shall mean the office of the Administrative Agent located
at ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other location as to
which the Administrative Agent shall have given written notice to the Borrower
and the other Lenders.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA, and any successor entity performing similar functions.
13
"PERMITTED ACQUISITIONS" shall mean any acquisitions or acquisitions for
which cash proceeds paid by a Borrower or a Subsidiary do not exceed $3,000,000
for the period commencing after the Closing Date and ending twenty-four (24)
months thereafter and $6,000,000 in the aggregate during the term hereof,
excluding the Acquisition.
"PERMITTED ENCUMBRANCES" shall mean
(i) Liens imposed by law for taxes not yet due or which are being
contested in good faith by appropriate proceedings and with respect to
which adequate reserves are being maintained in accordance with GAAP;
(ii) statutory Liens (including consents which incorporate or
acknowledge such statutory Liens) of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law created
in the ordinary course of business for amounts not yet due or which are
being contested in good faith by appropriate proceedings and with respect
to which adequate reserves are being maintained in accordance with GAAP;
(iii) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(iv) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary course
of business;
(v) judgment and attachment liens not giving rise to an Event of
Default or Liens created by or existing from any litigation or legal
proceeding that are currently being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being
maintained in accordance with GAAP; and
(vi) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or materially
interfere with the ordinary conduct of business of the Borrower and its
Subsidiaries taken as a whole;
provided, that the term "Permitted Encumbrances" shall not include any Lien
securing any Indebtedness.
"PERMITTED INVESTMENTS" shall mean:
(i) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States (or
by any agency thereof to the extent such obligations are backed by the full
faith and credit of the United States), in each case maturing within one
year from the date of acquisition thereof;
14
(ii) commercial paper having one of the two highest rating, at the
time of acquisition thereof, of S&P or Moody's and in either case maturing
within one year from the date of acquisition thereof;
(iii) certificates of deposit, bankers' acceptances and time deposits
maturing within 180 days of the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the
laws of the United States or any state thereof which has a combined capital
and surplus and undivided profits of not less than $500,000,000;
(iv) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (i) above and entered
into with a financial institution satisfying the criteria described in
clause (iii) above;
(v) mutual funds investing solely in any one or more of the Permitted
Investments described in clauses (i) through (iv) above; and
(vi) investments consistent with the investment policies of Insurance
Companies permitted by applicable insurance regulations.
"PERSON" shall mean any individual, partnership, firm, corporation,
association, joint venture, limited liability company, trust or other entity, or
any Governmental Authority.
"PLAN" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"PRO RATA SHARE" shall mean, with respect to any Lender at any time, a
percentage, the numerator of which shall be the sum of such Lender's Revolving
Commitment and Term Loan Commitment and the denominator of which shall be the
sum of all Lenders' Revolving Commitments and Term Loan Commitments; or if the
Revolving Commitments have been terminated or expired or if the Loans have been
declared to be due and payable, a percentage, the numerator of which shall be
the sum of such Lender's Revolving Credit Exposure and outstanding Term Loans
and the denominator of which shall be the sum of the aggregate Revolving Credit
Exposure and the aggregate outstanding Term Loans of all Lenders.
"PURCHASE AGREEMENT" shall mean that certain Asset Purchase Agreement dated
January 12, 2006, by and among Acceptance Insurance Agency of Illinois, Inc. as
purchaser, the Borrower, as parent of such purchaser, Insurance Plus Agency II,
Inc. and Yale International Insurance Agency, Inc., as sellers, and ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ as the sole shareholder of such sellers.
"REGULATION D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as the same may be in effect from time to time, and any
successor regulations.
15
"RELATED PARTIES" shall mean, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees and agents
of such Person and such Person's Affiliates.
"RELEASE" means any release, spill, emission, leaking, dumping, injection,
pouring, deposit, disposal, discharge, dispersal, leaching or migration into the
environment (including ambient air, surface water, groundwater, land surface or
subsurface strata) or within any building, structure, facility or fixture.
"REQUIRED LENDERS" shall mean, at any time, Lenders holding more than 50%
of the aggregate outstanding Revolving Credit Exposures and Term Loans at such
time or if the Lenders have no Revolving Credit Exposure or Term Loans
outstanding, then Lenders holding more than 50% of the Aggregate Revolving
Commitments.
"RESPONSIBLE OFFICER" shall mean any of the president, the chief executive
officer, the chief operating officer, the chief financial officer, the treasurer
or a vice president of the Borrower or such other representative of the Borrower
as may be designated in writing by any one of the foregoing with the consent of
the Administrative Agent; and, with respect to the financial covenants only, the
chief financial officer or the treasurer of the Borrower.
"RESTRICTED PAYMENT" shall have the meaning set forth in Section 7.5.
"REVOLVING COMMITMENT" shall mean, with respect to each Lender, the
obligation of such Lender to make Revolving Loans to the Borrower and to
participate in Letters of Credit and Swingline Loans in an aggregate principal
amount not exceeding the amount set forth with respect to such Lender on the
signature pages to this Agreement, or in the case of a Person becoming a Lender
after the Closing Date, the amount of the assigned "Revolving Commitment" as
provided in the Assignment and Acceptance Agreement executed by such Person as
an assignee, as the same may be changed pursuant to terms hereof.
"REVOLVING CREDIT EXPOSURE" shall mean, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Revolving
Loans, such Lender's LC Exposure and such Lender's Swingline Exposure.
"REVOLVING CREDIT NOTE" shall mean a promissory note of the Borrower
payable to the order of each Lender in the principal amount of such Lender's
Revolving Commitment, in substantially the form of Exhibit A.
"REVOLVING LOAN" shall mean a loan made by a Lender (other than the
Swingline Lender) to the Borrower under its Revolving Commitment, which may
either be a Base Rate Loan or a Eurodollar Loan.
"RISK-BASED CAPITAL RATIO" shall mean for an Insurance Company, the ratio
of Total Adjusted Capital to Authorized Control Level Risk-Based Capital,
determined in accordance with SAP for such period.
"S&P" shall mean Standard & Poor's rating Services, a division of
▇▇▇▇▇▇-▇▇▇▇ Companies.
16
"SECURITY DOCUMENTS" shall mean collectively the Borrower Security
Agreement, the Subsidiary Security Agreements, the Collateral Assignment of Life
Insurance, and any amendments thereto or restatements thereof.
"STATUTORY ACCOUNTING PRINCIPLES" or "SAP" means with respect to any
Insurance Company, the statutory accounting practices prescribed or permitted by
the insurance commissioner (or other similar authority) from time to time in the
jurisdiction of incorporation of such Insurance Company for the preparation of
annual statements and other financial reports by insurance companies of the same
type as such Insurance Company provided, that if the Borrower notifies the
Administrative Agent that the Borrower wishes to amend any covenant in Article
VI to eliminate the effect of any change in SAP or the operation of such
covenant (or if the Administrative Agent notifies the Borrower that the Required
Lenders wish to amend Article VI for such purpose), then the Borrower's
compliance with such covenant shall be determined on the basis of SAP in effect
immediately before the relevant change in SAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Borrower and the Required Lenders.
"STATUTORY STATEMENTS" means, for any Insurance Company, for each fiscal
year of such Insurance Company, the most recent annual statement, prepared in
accordance with Statutory Accounting Principles, required to be filed with the
appropriate Governmental Authority and, for each fiscal quarter of such
Insurance Company, the quarterly statement required to be filed with the
appropriate Governmental Authority, which quarterly statement shall be prepared
in accordance with Statutory Accounting Principles.
"SUBSIDIARY" shall mean, with respect to any Person (the "PARENT"), any
corporation, partnership, joint venture, limited liability company, association
or other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, partnership, joint venture, limited liability company,
association or other entity (i) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power, or in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, Controlled or held, or (ii) that is, as
of such date, otherwise Controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent. Unless
otherwise indicated, all references to "Subsidiary" hereunder shall mean a
Subsidiary of the Borrower.
"SUBSIDIARY GUARANTEE AGREEMENT" shall mean the Subsidiary Guarantee
Agreement, substantially in the form of Exhibit E, executed by the Subsidiary
Loan Parties and the Administrative Agent for the benefit of the Lenders.
"SUBSIDIARY LOAN PARTY" shall mean any Subsidiary of the Borrower, other
than an Insurance Company.
"SUBSIDIARY SECURITY AGREEMENTS" shall mean individually and collectively
the respective Security Agreements each dated as of the Closing Date, executed
by the Administrative Agent and each of the Subsidiary Loan Parties, and any
additional security
17
agreements delivered by any Subsidiary formed or acquired after the Closing Date
pursuant to Section 5.10, and any amendments thereto or restatements thereof.
"SURPLUS/SURPLUS AS REGARDS POLICYHOLDERS" shall have the meaning ascribed
to such terms in the Statutory Statements of an Insurance Company, determined in
accordance with SAP for such period.
"SWINGLINE COMMITMENT" shall mean the commitment of the Swingline Lender to
make Swingline Loans in an aggregate principal amount at any time outstanding
not to exceed $500,000.
"SWINGLINE EXPOSURE" shall mean, with respect to each Lender, the principal
amount of the Swingline Loans in which such Lender is legally obligated either
to make a Base Rate Loan or to purchase a participation in accordance with
Section 2.5, which shall equal such Lender's Pro Rata Share of all outstanding
Swingline Loans.
"SWINGLINE LENDER" shall mean SunTrust Bank, or any other Lender that may
agree to make Swingline Loans hereunder.
"SWINGLINE LOAN" shall mean a loan made to the Borrower by the Swingline
Lender under the Swingline Commitment.
"SWINGLINE NOTE" shall mean the promissory note of the Borrower payable to
the order of the Swingline Lender in the principal amount of the Swingline
Commitment, substantially the form of Exhibit C.
"SWINGLINE TERMINATION DATE" shall mean the date that is three (3) Business
Days prior to the Commitment Termination Date.
"TAXES" shall mean any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TERM LOAN" shall have the meaning set forth in Section 2.7.
"TERM LOAN COMMITMENT" shall mean, with respect to each Lender, the
obligation of such Lender to make a Term Loan hereunder on the Closing Date, in
a principal amount not exceeding the amount set forth with respect to such
Lender on the signature pages to this Agreement. The aggregate principal amount
of all Lenders' Term Loan Commitments is $25,000,000.
"TOTAL ADJUSTED CAPITAL" shall have the meaning ascribed to such terms in
the Statutory Statements of an Insurance Company, determined in accordance with
SAP for such period.
"TYPE", when used in reference to a Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Base Rate.
18
"UNDERWRITING EXPENSES" shall mean for an Insurance Company, its operating
expenses (as set forth in the Statutory Statements) reduced by Fee
Income/Finance and Service Charges Not Included in Premiums for such period,
determined in accordance with SAP.
"WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.2 Classifications of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g. a "Revolving
Loan" or "Term Loan") or by Type (e.g. a "Eurodollar Loan" or "Base Rate Loan")
or by Class and Type (e.g. "Revolving Eurodollar Loan"). Borrowings also may be
classified and referred to by Class (e.g. "Revolving Borrowing") or by Type
(e.g. "Eurodollar Borrowing") or by Class and Type (e.g. " Revolving Eurodollar
Borrowing").
SECTION 1.3 Accounting Terms and Determination. Unless otherwise defined or
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with GAAP as
in effect from time to time, applied on a basis consistent (except for such
changes approved by the Borrower's independent public accountants) with the most
recent audited consolidated financial statement of the Borrower delivered
pursuant to Section 5.1(a); provided, that if the Borrower notifies the
Administrative Agent that the Borrower wishes to amend any covenant in Article
VI to eliminate the effect of any change in GAAP on the operation of such
covenant (or if the Administrative Agent notifies the Borrower that the Required
Lenders wish to amend Article VI for such purpose), then the Borrower's
compliance with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Borrower and the Required Lenders.
SECTION 1.4 Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall". In
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the word "to" means "to but
excluding". Unless the context requires otherwise (i) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as it was
originally executed or as it may from time to time be amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (ii) any reference herein to any Person
shall be construed to include such Person's successors and permitted assigns,
(iii) the words "hereof", "herein" and "hereunder" and words of similar import
shall be construed to refer to this Agreement as a whole and not to any
particular provision hereof, (iv) all references to Articles, Sections, Exhibits
and Schedules shall be construed to refer to Articles, Sections, Exhibits and
Schedules to this
19
Agreement and (v) all references to a specific time shall be construed to refer
to Eastern standard or daylight savings time, as applicable, unless otherwise
indicated.
This Agreement and the other Loan Documents are the result of negotiation
among, and have been reviewed by counsel to, among others, the Administrative
Agent and the Borrower and are the product of discussions and negotiations among
all parties. Accordingly, this Agreement and the other Loan Documents are not
intended to be construed against the Administrative Agent or any of the Lenders
on account of the Administrative Agent's or any Lender's preparation of such
documents.
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENTS
SECTION 2.1 General Description of Facilities. Subject to and upon the
terms and conditions herein set forth, (i) the Lenders hereby establish in favor
of the Borrower a revolving credit facility pursuant to which the Lenders
severally agree (to the extent of each Lender's Pro Rata Share and not to exceed
such Lender's Revolving Commitment) to make Revolving Loans to the Borrower in
accordance with Section 2.2, (ii) the Issuing Bank agrees to issue Letters of
Credit in accordance with Section 2.24, (iii) the Swingline Lender agrees to
make Swingline Loans in accordance with Section 2.4, (iv) each Lender agrees to
purchase a participation interest in the Letters of Credit and the Swingline
Loans pursuant to the terms and conditions hereof; provided, that in no event
shall the aggregate principal amount of all outstanding Revolving Loans,
Swingline Loans and outstanding LC Obligations exceed at any time the Aggregate
Revolving Commitments from time to time in effect; and (v) each Lender severally
agrees to make a Term Loan to the Borrower in a principal amount not exceeding
such Lender's Term Loan Commitment on the Closing Date.
SECTION 2.2 Revolving Loans. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make Revolving Loans to the Borrower,
from time to time during the Availability Period, in an aggregate principal
amount outstanding at any time that will not result in (a) such Lender's
Revolving Credit Exposure exceeding such Lender's Revolving Commitment or (b)
the sum of the aggregate Revolving Credit Exposures of all Lenders exceeding the
Aggregate Revolving Commitments. During the Availability Period, the Borrower
shall be entitled to borrow, prepay and reborrow Revolving Loans in accordance
with the terms and conditions of this Agreement; provided, that the Borrower may
not borrow or reborrow should there exist a Default or Event of Default.
SECTION 2.3 Procedure for Revolving Borrowings.
The Borrower shall give the Administrative Agent written notice (or
telephonic notice promptly confirmed in writing) of each Revolving Borrowing
substantially in the form of Exhibit 2.3 attached hereto (a "NOTICE OF REVOLVING
BORROWING") (x) prior to 11:00 a.m. one (1) Business Day prior to the requested
date of each Base Rate Borrowing and (y) prior to 11:00 a.m. three (3) Business
Days prior to the requested date of each Eurodollar Borrowing. Each Notice of
Revolving Borrowing shall be irrevocable and shall specify: (i) the aggregate
principal amount of such Borrowing, (ii) the date of such Borrowing (which shall
be a Business Day), (iii)
20
the Type of such Revolving Loan comprising such Borrowing and (iv) in the case
of a Eurodollar Borrowing, the duration of the initial Interest Period
applicable thereto (subject to the provisions of the definition of Interest
Period). Each Revolving Borrowing shall consist entirely of Base Rate Loans or
Eurodollar Loans, as the Borrower may request. The aggregate principal amount of
each Eurodollar Borrowing shall be not less than $1,000,000 or a larger multiple
of $500,000, and the aggregate principal amount of each Base Rate Borrowing
shall not be less than $500,000 or a larger multiple of $250,000; provided, that
Base Rate Loans made pursuant to Section 2.5 or Section 2.24(d) may be made in
lesser amounts as provided therein. At no time shall the total number of
Eurodollar Borrowings outstanding at any time exceed five. Promptly following
the receipt of a Notice of Revolving Borrowing in accordance herewith, the
Administrative Agent shall advise each Lender of the details thereof and the
amount of such Lender's Revolving Loan to be made as part of the requested
Revolving Borrowing.
SECTION 2.4 Swingline Commitment. Subject to the terms and conditions set
forth herein, the Swingline Lender agrees to make Swingline Loans to the
Borrower, from time to time from the Closing Date to the Swingline Termination
Date, in an aggregate principal amount outstanding at any time not to exceed the
lesser of (i) the Swingline Commitment then in effect and (ii) the difference
between the Aggregate Revolving Commitments and the aggregate Revolving Credit
Exposures of all Lenders; provided, that the Swingline Lender shall not be
required to make a Swingline Loan to refinance an outstanding Swingline Loan.
The Borrower shall be entitled to borrow, repay and reborrow Swingline Loans in
accordance with the terms and conditions of this Agreement.
SECTION 2.5 Procedure for Swingline Borrowing; Etc.
(a) The Borrower shall give the Administrative Agent written notice
(or telephonic notice promptly confirmed in writing) of each Swingline
Borrowing ("NOTICE OF SWINGLINE BORROWING") prior to 1:00 p.m. on the
requested date of each Swingline Borrowing. Each Notice of Swingline
Borrowing shall be irrevocable and shall specify: (i) the principal amount
of such Swingline Loan, (ii) the date of such Swingline Loan (which shall
be a Business Day) and (iii) the account of the Borrower to which the
proceeds of such Swingline Loan should be credited. The Administrative
Agent will promptly advise the Swingline Lender of each Notice of Swingline
Borrowing. Each Swingline Loan shall accrue interest at the Base Rate or
any other interest rate as agreed between the Borrower and the Swingline
Lender and shall have an Interest Period (subject to the definition
thereof) as agreed between the Borrower and the Swingline Lender. The
aggregate principal amount of each Swingline Loan shall be not less than
$250,000 or a larger multiple of $50,000, or such other minimum amounts
agreed to by the Swingline Lender and the Borrower. The Swingline Lender
will make the proceeds of each Swingline Loan available to the Borrower in
Dollars in immediately available funds at the account specified by the
Borrower in the applicable Notice of Swingline Borrowing not later than
3:00 p.m. on the requested date of such Swingline Loan. The Administrative
Agent will notify the Lenders on a quarterly basis if any Swingline Loans
occurred during such quarter.
(b) The Swingline Lender, at any time and from time to time in its
sole discretion, may, on behalf of the Borrower (which hereby irrevocably
authorizes and
21
directs the Swingline Lender to act on its behalf), give a Notice of
Revolving Borrowing to the Administrative Agent requesting the Lenders
(including the Swingline Lender) to make Base Rate Loans in an amount equal
to the unpaid principal amount of any Swingline Loan. Each Lender will make
the proceeds of its Base Rate Loan included in such Borrowing available to
the Administrative Agent for the account of the Swingline Lender in
accordance with Section 2.8, which will be used solely for the repayment of
such Swingline Loan.
(c) If for any reason a Base Rate Borrowing may not be (as determined
in the sole discretion of the Administrative Agent), or is not, made in
accordance with the foregoing provisions, then each Lender (other than the
Swingline Lender) shall purchase an undivided participating interest in
such Swingline Loan in an amount equal to its Pro Rata Share thereof on the
date that such Base Rate Borrowing should have occurred. On the date of
such required purchase, each Lender shall promptly transfer, in immediately
available funds, the amount of its participating interest to the
Administrative Agent for the account of the Swingline Lender. If such
Swingline Loan bears interest at a rate other than the Base Rate, such
Swingline Loan shall automatically become a Base Rate Loan on the effective
date of any such participation and interest shall become payable on demand.
(d) Each Lender's obligation to make a Base Rate Loan pursuant to
Section 2.5(b) or to purchase the participating interests pursuant to
Section 2.5(c) shall be absolute and unconditional and shall not be
affected by any circumstance, including without limitation (i) any setoff,
counterclaim, recoupment, defense or other right that such Lender or any
other Person may have or claim against the Swingline Lender, the Borrower
or any other Person for any reason whatsoever, (ii) the existence of a
Default or an Event of Default or the termination of any Lender's Revolving
Commitment, (iii) the existence (or alleged existence) of any event or
condition which has had or could reasonably be expected to have a Material
Adverse Effect, (iv) any breach of this Agreement or any other Loan
Document by the Borrower, the Administrative Agent or any Lender or (v) any
other circumstance, happening or event whatsoever, whether or not similar
to any of the foregoing. If such amount is not in fact made available to
the Swingline Lender by any Lender, the Swingline Lender shall be entitled
to recover such amount on demand from such Lender, together with accrued
interest thereon for each day from the date of demand thereof at the
Federal Funds Rate. Until such time as such Lender makes its required
payment, the Swingline Lender shall be deemed to continue to have
outstanding Swingline Loans in the amount of the unpaid participation for
all purposes of the Loan Documents. In addition, such Lender shall be
deemed to have assigned any and all payments made of principal and interest
on its Loans and any other amounts due to it hereunder, to the Swingline
Lender to fund the amount of such Lender's participation interest in such
Swingline Loans that such Lender failed to fund pursuant to this Section,
until such amount has been purchased in full.
SECTION 2.6 Intentionally Omitted.
SECTION 2.7 Term Loan Commitments. Subject to the terms and conditions set
forth herein, each Lender severally agrees to make a single loan (each, a "TERM
LOAN") to the
22
Borrower on the Closing Date in a principal amount not to exceed the Term Loan
Commitment of such Lender; provided, that if for any reason the full amount of
such Lender's Term Loan Commitment is not fully drawn on the Closing Date, the
undrawn portion thereof shall automatically be canceled. The Term Loans may be,
from time to time, Base Rate Loans or Eurodollar Loans or a combination thereof;
provided, that on the Closing Date all Term Loans shall be Base Rate Loans. The
execution and delivery of this Agreement by the Borrower and the satisfaction of
all conditions precedent pursuant to Section 3.1 shall be deemed to constitute
the Borrower's request to borrow the Term Loans on the Closing Date.
SECTION 2.8 Funding of Borrowings.
(a) Each Lender will make available each Loan to be made by it
hereunder on the proposed date thereof by wire transfer in immediately
available funds by 11:00 a.m. to the Administrative Agent at the Payment
Office; provided, that the Swingline Loans will be made as set forth in
Section 2.5. The Administrative Agent will make such Loans available to the
Borrower by promptly crediting the amounts that it receives, in like funds
by the close of business on such proposed date, to an account maintained by
the Borrower with the Administrative Agent or at the Borrower's option, by
effecting a wire transfer of such amounts to an account designated by the
Borrower to the Administrative Agent.
(b) Unless the Administrative Agent shall have been notified by any
Lender prior to 5 p.m. one (1) Business Day prior to the date of a
Borrowing in which such Lender is participating that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made
such amount available to the Administrative Agent on such date, and the
Administrative Agent, in reliance on such assumption, may make available to
the Borrower on such date a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative Agent by such
Lender on the date of such Borrowing, the Administrative Agent shall be
entitled to recover such corresponding amount on demand from such Lender
together with interest at the Federal Funds Rate for up to two (2) days and
thereafter at the rate specified for such Borrowing. If such Lender does
not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the
Borrower, and the Borrower shall immediately pay such corresponding amount
to the Administrative Agent together with interest at the rate specified
for such Borrowing. Nothing in this subsection shall be deemed to relieve
any Lender from its obligation to fund its Pro Rata Share of any Borrowing
hereunder or to prejudice any rights which the Borrower may have against
any Lender as a result of any default by such Lender hereunder.
(c) All Revolving Borrowings shall be made by the Lenders on the basis
of their respective Pro Rata Shares. No Lender shall be responsible for any
default by any other Lender in its obligations hereunder, and each Lender
shall be obligated to make its Loans provided to be made by it hereunder,
regardless of the failure of any other Lender to make its Loans hereunder.
23
SECTION 2.9 Interest Elections.
(a) Each Borrowing initially shall be of the Type specified in the
applicable Notice of Borrowing, and in the case of a Eurodollar Borrowing,
shall have an initial Interest Period as specified in such Notice of
Borrowing. Thereafter, the Borrower may elect to convert such Borrowing
into a different Type or to continue such Borrowing, and in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided
in this Section. The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such
portion shall be allocated ratably among the Lenders holding Loans
comprising such Borrowing, and the Loans comprising each such portion shall
be considered a separate Borrowing. This Section shall not apply to
Swingline Borrowings, which may not be converted or continued.
(b) To make an election pursuant to this Section, the Borrower shall
give the Administrative Agent prior written notice (or telephonic notice
promptly confirmed in writing) of each Borrowing (a "NOTICE OF
CONVERSION/CONTINUATION") that is to be converted or continued, as the case
may be, (x) prior to 10:00 a.m. one (1) Business Day prior to the requested
date of a conversion into a Base Rate Borrowing and (y) prior to 11:00 a.m.
three (3) Business Days prior to a continuation of or conversion into a
Eurodollar Borrowing. Each such Notice of Conversion/Continuation shall be
irrevocable and shall specify (i) the Borrowing to which such Notice of
Continuation/Conversion applies and if different options are being elected
with respect to different portions thereof, the portions thereof that are
to be allocated to each resulting Borrowing (in which case the information
to be specified pursuant to clauses (iii) and (iv) shall be specified for
each resulting Borrowing); (ii) the effective date of the election made
pursuant to such Notice of Continuation/Conversion, which shall be a
Business Day, (iii) whether the resulting Borrowing is to be a Base Rate
Borrowing or a Eurodollar Borrowing; and (iv) if the resulting Borrowing is
to be a Eurodollar Borrowing, the Interest Period applicable thereto after
giving effect to such election, which shall be a period contemplated by the
definition of "Interest Period". If any such Notice of
Continuation/Conversion requests a Eurodollar Borrowing but does not
specify an Interest Period, the Borrower shall be deemed to have selected
an Interest Period of one month. The principal amount of any resulting
Borrowing shall satisfy the minimum borrowing amount for Eurodollar
Borrowings and Base Rate Borrowings set forth in Section 2.3.
(c) If, on the expiration of any Interest Period in respect of any
Eurodollar Borrowing, the Borrower shall have failed to deliver a Notice of
Conversion/ Continuation, then, unless such Borrowing is repaid as provided
herein, the Borrower shall be deemed to have elected to convert such
Borrowing to a Base Rate Borrowing. No Borrowing may be converted into, or
continued as, a Eurodollar Borrowing if an Event of Default exists, unless
the Administrative Agent and each of the Lenders shall have otherwise
consented in writing. No conversion of any Eurodollar Loans shall be
permitted except on the last day of the Interest Period in respect thereof.
(d) Upon receipt of any Notice of Conversion/Continuation, the
Administrative Agent shall promptly notify each Lender of the details
thereof and of such Lender's portion of each resulting Borrowing.
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SECTION 2.10 Optional Reduction and Termination of Commitments.
(a) Unless previously terminated, all Revolving Commitments shall
terminate on the Commitment Termination Date, except that the Swingline
Commitment shall terminate on the Swingline Termination Date. The Term Loan
Commitments shall terminate on the Closing Date upon the making of the Term
Loans pursuant to Section 2.7.
(b) Upon at least three (3) Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) to the Administrative
Agent (which notice shall be irrevocable), the Borrower may reduce the
Aggregate Revolving Commitments in part or terminate the Aggregate
Revolving Commitments in whole; provided, that (i) any partial reduction
shall apply to reduce proportionately and permanently the Revolving
Commitment of each Lender, (ii) any partial reduction pursuant to this
Section 2.10 shall be in an amount of at least $1,000,000 and any larger
multiple of $100,000, and (iii) no such reduction shall be permitted which
would reduce the Aggregate Revolving Commitments to an amount less than the
outstanding Revolving Credit Exposures of all Lenders. Any such reduction
in the Aggregate Revolving Commitments shall result in a proportionate
reduction (rounded to the next lowest integral multiple of $100,000) in the
Swingline Commitment and the LC Commitment.
SECTION 2.11 Repayment of Loans.
(a) The outstanding principal amount of all Revolving Loans shall be
due and payable (together with accrued and unpaid interest thereon) on the
Commitment Termination Date.
(b) The principal amount of each Swingline Borrowing shall be due and
payable (together with accrued interest thereon) on the earlier of (i) the
last day of the Interest Period applicable to such Borrowing and (ii) the
Swingline Termination Date.
(c) The Borrower unconditionally promises to pay to the Administrative
Agent for the account of each Lender the then unpaid principal amount of
the Term Loan of such Lender in installments payable on the dates set forth
below, with each such installment being in the aggregate principal amount
for all Lenders set forth opposite such date below (and on such other
date(s) and in such other amounts as may be required from time to time
pursuant to this Agreement):
Aggregate
Installment Date Principal Amount
---------------- -------------------
April 30, 2006 $1,388,000
July 31, 2006 $1,388,000
October 31, 2006 $1,388,000
January 31, 2007 $1,388,000
April 30, 2007 $1,388,000
July 31, 2007 $1,388,000
October 31, 2007 $1,388,000
25
January 31, 2008 $1,388,000
April 30, 2008 $1,388,000
July 31, 2008 $1,388,000
October 31, 2008 $1,388,000
January 31, 2009 $1,388,000
April 30, 2009 $1,388,000
July 31, 2009 $1,388,000
October 31, 2009 $1,388,000
January 31, 2010 $1,388,000
April 30, 2010 $1,388,000
provided, that, to the extent not previously paid, the aggregate unpaid
principal balance of the Term Loans shall be due and payable on the Maturity
Date.
SECTION 2.12 Evidence of Indebtedness.
(a) Each Lender shall maintain in accordance with its usual practice
appropriate records evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender from time to time,
including the amounts of principal and interest payable thereon and paid to
such Lender from time to time under this Agreement. The Administrative
Agent shall maintain appropriate records in which shall be recorded (i) the
Revolving Commitment and Term Loan Commitment of each Lender, (ii) the
amount of each Loan made hereunder by each Lender, the Class and Type
thereof and the Interest Period applicable thereto, (iii) the date of each
continuation thereof pursuant to Section 2.9, (iv) the date of each
conversion of all or a portion thereof to another Type pursuant to Section
2.9, (v) the date and amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Lender hereunder in
respect of such Loans and (vi) both the date and amount of any sum received
by the Administrative Agent hereunder from the Borrower in respect of the
Loans and each Lender's Pro Rata Share thereof. The entries made in such
records shall be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded absent manifest error;
provided, that the failure or delay of any Lender or the Administrative
Agent in maintaining or making entries into any such record or any error
therein shall not in any manner affect the obligation of the Borrower to
repay the Loans (both principal and unpaid accrued interest) of such Lender
in accordance with the terms of this Agreement.
(b) At the request of any Lender (including the Swingline Lender) at
any time, the Borrower agrees that it will execute and deliver to such
Lender a Revolving Credit Note, and a Term Loan Note and, in the case of
the Swingline Lender only, a Swingline Note, payable to the order of such
Lender.
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SECTION 2.13 Optional Prepayments. The Borrower shall have the right at any
time and from time to time to prepay any Borrowing, in whole or in part, without
premium or penalty, by giving irrevocable written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent no later than (i) in
the case of prepayment of any Eurodollar Borrowing, 11:00 a.m. not less than
three (3) Business Days prior to any such prepayment, (ii) in the case of any
prepayment of any Base Rate Borrowing, not less than one Business Day prior to
the date of such prepayment, and (iii) in the case of Swingline Borrowings,
prior to 11:00 a. m. on the date of such prepayment. Each such notice shall be
irrevocable and shall specify the proposed date of such prepayment and the
principal amount of each Borrowing or portion thereof to be prepaid. Upon
receipt of any such notice, the Administrative Agent shall promptly notify each
affected Lender of the contents thereof and of such Lender's Pro Rata Share of
any such prepayment. If such notice is given, the aggregate amount specified in
such notice shall be due and payable on the date designated in such notice,
together with accrued interest to such date on the amount so prepaid; provided,
that if a Eurodollar Borrowing is prepaid on a date other than the last day of
an Interest Period applicable thereto, the Borrower shall also pay all amounts
required pursuant to Section 2.20. Each partial prepayment of any Loan (other
than a Swingline Loan) shall be in an amount that would be permitted in the case
of an advance of a Revolving Borrowing of the same Type pursuant to Section 2.2
or in the case of a Swingline Loan pursuant to Section 2.5. Each prepayment of a
Borrowing shall be applied ratably to the Loans comprising such Borrowing, and
in the case of a prepayment of a Term Loan Borrowing, pro rata to each of the
principal installments thereof. Any payments made to the Administrative Agent
for the Lenders pursuant to the Collateral Assignment of Life Insurance shall be
applied as an optional prepayment of the Term Loans under this Section.
SECTION 2.14 Interest on Loans.
(a) The Borrower shall pay interest on each Base Rate Loan at the Base
Rate in effect from time to time plus the Applicable Margin, and on each
Eurodollar Loan at the Adjusted LIBO Rate for the applicable Interest
Period in effect for such Loan, plus the Applicable Margin.
(b) The Borrower shall pay interest on each Swingline Loan at the Base
Rate in effect from time to time, plus the Applicable Margin.
(c) While an Event of Default exists or after acceleration, at the
option of the Required Lenders, the Borrower shall pay interest ("DEFAULT
INTEREST") with respect to all Eurodollar Loans at the rate otherwise
applicable for the then-current Interest Period plus an additional 2% per
annum until the last day of such Interest Period, and thereafter, and with
respect to all Base Rate Loans (including all Swingline Loans) and all
other Obligations hereunder (other than Loans), at the rate in effect for
Base Rate Loans, plus an additional 2% per annum.
(d) Interest on the principal amount of all Loans shall accrue from
and including the date such Loans are made to but excluding the date of any
repayment thereof. Interest on all outstanding Base Rate Loans shall be
payable quarterly in arrears on the last day of each calendar quarter and
on the Commitment Termination Date or the Maturity Date, as the case may
be. Interest on all outstanding Eurodollar Loans shall be
27
payable on the last day of each Interest Period applicable thereto, and, in
the case of any Eurodollar Loans having an Interest Period in excess of
three months on each day which occurs every three months after the initial
date of such Interest Period, and on the Commitment Termination Date or the
Maturity Date, as the case may be. Interest on each Swingline Loan shall be
payable on the maturity of such Swingline Loan, which shall be the last day
of the Interest Period applicable thereto, and on the Swingline Termination
Date. Interest on any Loan which is converted into a Loan of another Type
or which is repaid or prepaid shall be payable on the date of such
conversion or on the date of any such repayment or prepayment (on the
amount repaid or prepaid) thereof. All Default Interest shall be payable on
demand.
(e) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder and shall promptly notify the Borrower
and the Lenders of such rate in writing (or by telephone, promptly
confirmed in writing). Any such determination shall be conclusive and
binding for all purposes, absent manifest error.
SECTION 2.15 Fees.
(a) Administrative Agent's Fees. The Borrower shall pay to the
Administrative Agent for its own account fees in the amounts and at the
times previously agreed upon the Borrower and the Administrative Agent.
(b) Commitment Fee. The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee (the "COMMITMENT
FEE"), which shall accrue at the Applicable Percentage on the daily amount
of the unused Revolving Commitment of such Lender during the Availability
Period; provided, that if such Lender continues to have any Revolving
Credit Exposure after the Commitment Termination Date, then the Commitment
Fee shall continue to accrue on the amount of such Lender's unused
Revolving Commitment from and after the Commitment Termination Date to the
date that all of such Lender's Revolving Credit Exposure has been paid in
full. Accrued Commitment Fees shall be payable in arrears on the last day
of each March, June, September and December of each year and on the
Commitment Termination Date, commencing on the first such date after the
Closing Date; provided further, that any commitment fees accruing after the
Commitment Termination Date shall be payable on demand. For purposes of
computing Commitment Fees, the Revolving Commitment of each Lender shall be
deemed used to the extent of the outstanding Revolving Loans and LC
Exposure of such Lender.
(c) Letter of Credit Fees. The Borrower agrees to pay (i) to the
Administrative Agent, for the account of each Lender, a letter of credit
fee (the "LETTER OF CREDIT FEE") with respect to its participation in each
Letter of Credit, which shall accrue at the Applicable Percentage on the
average daily amount of such Lender's LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) attributable to such
Letter of Credit during the period from and including the date of issuance
of such Letter of Credit to but excluding the date on which such Letter
expires or is drawn in full (including without limitation any LC Exposure
that remains outstanding after the Commitment Termination Date) and (ii) to
the Issuing Bank for its
28
own account a fronting fee, which shall accrue at the rate of 0.25% per
annum on the average daily amount of the LC Exposure (excluding any portion
thereof attributable to Unreimbursed LC Disbursements) during the
Availability Period (or until the date that such Letter of Credit is
irrevocably canceled, whichever is later), as well as the Issuing Bank's
standard fees with respect to issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Accrued Letter
of Credit Fees and the fronting fee shall be payable quarterly in arrears
on the last day of each March, June, September and December, commencing on
the first such date after the Closing Date and on the Commitment
Termination Date (and if later, the date the LC Exposure shall be repaid in
their entirety).
SECTION 2.16 Computation of Interest and Fees. All computations of interest
and fees hereunder shall be made on the basis of a year of 360 days for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are payable (to the
extent computed on the basis of days elapsed). Each determination by the
Administrative Agent of an interest amount or fee hereunder shall be made in
good faith and, except for manifest error, shall be final, conclusive and
binding for all purposes.
SECTION 2.17 Inability to Determine Interest Rates. If prior to the
commencement of any Interest Period for any Eurodollar Borrowing,
(i) the Administrative Agent shall have reasonably determined (which
determination shall be conclusive and binding upon Borrower) that, by
reason of circumstances affecting the relevant interbank market, adequate
means do not exist for ascertaining LIBOR for such Interest Period, or
(ii) the Administrative Agent shall have received notice from the
Required Lenders that the Adjusted LIBO Rate does not adequately and fairly
reflect the cost to such Lenders (or Lender, as the case may be) of making,
funding or maintaining their (or its, as the case may be) Eurodollar Loans
for such Interest Period,
the Administrative Agent shall give written notice (or telephonic notice,
promptly confirmed in writing) to the Borrower and to the Lenders as soon as
practicable thereafter. In the case of Eurodollar Loans, until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) the obligations of
the Lenders to make Eurodollar Revolving Loans or to continue or convert
outstanding Loans as or into Eurodollar Loans shall be suspended and (ii) all
such affected Loans shall be converted into Base Rate Loans on the last day of
the then current Interest Period applicable thereto unless the Borrower prepays
such Loans in accordance with this Agreement. Unless the Borrower notifies the
Administrative Agent at least one (1) Business Day before the date of any
Eurodollar Revolving Borrowing for which a Notice of Revolving Borrowing has
previously been given that it elects not to borrow on such date, then such
Revolving Borrowing shall be made as a Base Rate Borrowing.
SECTION 2.18 Illegality. If any Change in Law shall make it unlawful or
impossible for any Lender to make, maintain or fund any Eurodollar Loan and such
Lender shall so notify the
29
Administrative Agent, the Administrative Agent shall promptly give notice
thereof to the Borrower and the other Lenders, whereupon until such Lender
notifies the Administrative Agent and the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligation of such Lender to make
Eurodollar Revolving Loans, or to continue or convert outstanding Loans as or
into Eurodollar Loans, shall be suspended. In the case of the making of a
Eurodollar Revolving Borrowing, such Lender's Revolving Loan shall be made as a
Base Rate Loan as part of the same Revolving Borrowing for the same Interest
Period and if the affected Eurodollar Loan is then outstanding, such Loan shall
be converted to a Base Rate Loan either (i) on the last day of the then current
Interest Period applicable to such Eurodollar Loan if such Lender may lawfully
continue to maintain such Loan to such date or (ii) immediately if such Lender
shall reasonably determine that it may not lawfully continue to maintain such
Eurodollar Loan to such date. Notwithstanding the foregoing, the affected Lender
shall, prior to giving such notice to the Administrative Agent, designate a
different Applicable Lending Office if such designation would avoid the need for
giving such notice and if such designation would not otherwise be
disadvantageous to such Lender in the good faith exercise of its reasonable
discretion.
SECTION 2.19 Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement that is not otherwise included in the
determination of the Adjusted LIBO Rate hereunder against assets of,
deposits with or for the account of, or credit extended by, any Lender
(except any such reserve requirement reflected in the Adjusted LIBO
Rate) or the Issuing Bank; or
(ii) impose on any Lender or on the Issuing Bank or the
eurodollar interbank market any other condition affecting this
Agreement or any Eurodollar Loans made by such Lender or any Letter of
Credit or any participation therein;
and the result of the foregoing is to increase the cost to such Lender of
making, converting into, continuing or maintaining a Eurodollar Loan or to
increase the cost to such Lender or the Issuing Bank of participating in or
issuing any Letter of Credit or to reduce the amount received or receivable by
such Lender or the Issuing Bank hereunder (whether of principal, interest or any
other amount), then the Borrower shall promptly pay, after written notice from
and demand by such Lender on the Borrower (with a copy of such notice and demand
to the Administrative Agent), to the Administrative Agent for the account of
such Lender, within fifteen (15) Business Days after the date of such notice and
demand, additional amount or amounts sufficient to compensate such Lender or the
Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.
(b) If any Lender or the Issuing Bank shall have determined that on or
after the date of this Agreement any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on
such Lender's or the Issuing Bank's capital (or on the capital of such
Lender's or the Issuing Bank's parent corporation) as a consequence of its
obligations hereunder or under or in respect of any
30
Letter of Credit to a level below that which such Lender or the Issuing
Bank or such Lender's or the Issuing Bank's parent corporation could have
achieved but for such Change in Law (taking into consideration such
Lender's or the Issuing Bank's policies or the policies of such Lender's or
the Issuing Bank's parent corporation with respect to capital adequacy)
then, from time to time, within fifteen (15) Business Days after receipt by
the Borrower of written demand by such Lender (with a copy thereof to the
Administrative Agent which shall contain reasonable detail setting forth
such amounts), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender or the Issuing Bank or such Lender's
or the Issuing Bank's parent corporation for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank
or such Lender's or the Issuing Bank's parent corporation, as the case may
be, specified in paragraph (a) or (b) of this Section shall be delivered to
the Borrower (with a copy to the Administrative Agent) and shall be
conclusive, absent manifest error. The Borrower shall pay any such Lender
or the Issuing Bank, as the case may be, such amount or amounts within ten
(10) days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver
of such Lender's or the Issuing Bank's right to demand such compensation,
provided, that the Borrower shall not be required to compensate a Lender or
the Issuing Bank under this Section for any increased costs or reductions
incurred more than six (6) months prior to the date that such Lender or the
Issuing Bank notifies the Borrower of such increased costs or reductions
and of such Lender's or the Issuing Bank's intention to claim compensation
therefore; provided further, that if the Change in Law giving rise to such
increased costs or reductions is retroactive, then such six-month period
shall be extended to include the period of such retroactive effect.
SECTION 2.20 Funding Indemnity. In the event of (a) the payment of any
principal of a Eurodollar Loan other than on the last day of the Interest Period
applicable thereto (including as a result of an Event of Default), (b) the
conversion or continuation of a Eurodollar Loan other than on the last day of
the Interest Period applicable thereto, or (c) the failure by the Borrower to
borrow, prepay, convert or continue any Eurodollar Loan on the date specified in
any applicable notice (regardless of whether such notice is withdrawn or
revoked), then, in any such event, the Borrower shall compensate each Lender,
within five (5) Business Days after written demand from such Lender, for any
loss, cost or expense attributable to such event. In the case of a Eurodollar
Loan, such loss, cost or expense shall be deemed to include an amount determined
by such Lender to be the excess, if any, of (A) the amount of interest that
would have accrued on the principal amount of such Eurodollar Loan if such event
had not occurred at the Adjusted LIBO Rate applicable to such Eurodollar Loan
for the period from the date of such event to the last day of the then current
Interest Period therefor (or in the case of a failure to borrow, convert or
continue, for the period that would have been the Interest Period for such
Eurodollar Loan) over (B) the amount of interest that would accrue on the
principal amount of such Eurodollar Loan for the same period if the Adjusted
LIBO Rate were set on the date such Eurodollar Loan was prepaid or converted or
the date on which the Borrower failed to borrow, convert or continue
31
such Eurodollar Loan. A certificate as to any additional amount payable under
this Section 2.20 submitted to the Borrower by any Lender shall certain
reasonable detail of such amount and shall be conclusive, absent manifest error.
SECTION 2.21 Taxes.
(a) Any and all payments by or on account of any obligation of the
Borrower hereunder shall be made free and clear of and without deduction
for any Indemnified Taxes or Other Taxes; provided, that if the Borrower
shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, any
Lender or the Issuing Bank (as the case may be) shall receive an amount
equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall
pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within fifteen (15) Business Days after written
demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes paid by the Administrative Agent, such Lender or the Issuing Bank, as
the case may be, on or with respect to any payment by or on account of any
obligation of the Borrower hereunder (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender or the Issuing Bank, or by
the Administrative Agent on its own behalf or on behalf of a Lender or the
Issuing Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a
copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed
by applicable law, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Borrower as
will permit such payments to be made without withholding or at a reduced
rate. Without
32
limiting the generality of the foregoing, each Foreign Lender agrees that
it will deliver to the Administrative Agent and the Borrower (or in the
case of a Participant, to the Lender from which the related participation
shall have been purchased) two (2) duly completed copies of Internal
Revenue Service Form W-8BEN, W-8ECI, W-8EXP or W-8IMY, or any successor
form thereto, as the case may be, certifying in each case that such Foreign
Lender is entitled to receive payments made by the Borrower hereunder and
under the Notes payable to it, without deduction or withholding (or at a
reduced rate) of any United States federal income taxes and (ii) a duly
completed Internal Revenue Service Form W-8BEN, W-8ECI, W-8EXP or W-8IMY,
or any successor form thereto, as the case may be, to establish an
exemption from United States backup withholding tax. Each Lender that is
not a Foreign Lender agrees that it will deliver to the Administrative
Agent and the Borrower (or in the case of a Participant, to the Lender from
which the related participation shall have been purchased) two (2) duly
completed copies of the Internal Revenue Service Form W-9, or any successor
form thereto, to establish an exemption from United States backup
withholding tax. Each Lender shall deliver to the Borrower and the
Administrative Agent such forms on or before the date that it becomes a
party to this Agreement (or in the case of a Participant, on or before the
date such Participant purchases the related participation). In addition,
each such Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Lender. Each such
Lender shall promptly notify the Borrower and the Administrative Agent at
any time that it determines that it is no longer in a position to provide
any previously delivered certificate to the Borrower (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
SECTION 2.22 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.19, 2.20 or 2.21, or
otherwise) prior to 12:00 noon, on the date when due, in immediately
available funds, without set-off or counterclaim. Any amounts received
after such time on any date may, in the discretion of the Administrative
Agent, be deemed to have been received on the next succeeding Business Day
for purposes of calculating interest thereon. All such payments shall be
made to the Administrative Agent at the Payment Office, except payments to
be made directly to the Issuing Bank or Swingline Lender as expressly
provided herein and except that payments pursuant to Sections 2.19, 2.20
and 2.21 and 10.3 shall be made directly to the Persons entitled thereto.
The Administrative Agent shall distribute any such payments received by it
for the account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment hereunder shall be due on a day
that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be made payable for the period of such
extension. All payments hereunder shall be made in Dollars.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such
funds shall be applied (i) first, towards payment of interest and fees then
due hereunder, ratably among the parties
33
entitled thereto in accordance with the amounts of interest and fees then
due to such parties, and (ii) second, towards payment of principal and
unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and
unreimbursed LC Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-of or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans or participations in LC
Disbursements or Swingline Loans that would result in such Lender receiving
payment of a greater proportion of the aggregate amount of its Revolving
Loans and participations in LC Disbursements and Swingline Loans and
accrued interest thereon than the proportion received by any other Lender,
then the Lender receiving such greater proportion shall purchase (for cash
at face value) participations in the Revolving Loans and participations in
LC Disbursements and Swingline Loans of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans and participations in
LC Disbursements and Swingline Loans; provided, that (i) if any such
participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest,
and (ii) the provisions of this paragraph shall not be construed to apply
to any payment made by the Borrower pursuant to and in accordance with the
express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of
its Loans or participations in LC Disbursements or Swingline Loans to any
assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall
apply). The Borrower consents to the foregoing and agrees, to the extent it
may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against
the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrower will not make such payment, the Administrative
Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute
to the Lenders or the Issuing Bank, as the case may be, the amount or
amounts due. In such event, if the Borrower has not in fact made such
payment, then each of the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand
the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation.
34
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.5(b), 2.24(d), 2.8(b), 2.22(d) or 10.3(d), then
the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such
Lender's obligations under such Sections until all such unsatisfied
obligations are fully paid.
SECTION 2.23 Mitigation of Obligations. If any Lender requests compensation
under Section 2.19, or if the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.21, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the sole judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable under
Section 2.19 or Section 2.21, as the case may be, in the future and (ii) would
not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay
all costs and expenses incurred by any Lender in connection with such
designation or assignment.
SECTION 2.24 Letters of Credit.
(a) During the Availability Period, the Issuing Bank, in reliance upon
the agreements of the other Lenders pursuant to Section 2.24(d), agrees to
issue, at the request of the Borrower, Letters of Credit for the account of
the Borrower on the terms and conditions hereinafter set forth; provided,
that (i) each Letter of Credit shall expire on the earlier of (A) the date
one year after the date of issuance of such Letter of Credit (or in the
case of any renewal or extension thereof, one year after such renewal or
extension) and (B) the date that is five (5) Business Days prior to the
Commitment Termination Date; (ii) each Letter of Credit shall be in a
stated amount of at least $50,000; and (iii) the Borrower may not request
any Letter of Credit, if, after giving effect to such issuance (A) the
aggregate LC Exposure would exceed the LC Commitment or (B) the aggregate
LC Exposure, plus the aggregate outstanding Revolving Loans of all Lenders,
would exceed the Aggregate Revolving Commitments. Upon the issuance of each
Letter of Credit each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Issuing Bank without recourse
a participation in such Letter of Credit equal to such Lender's Pro Rata
Share of the aggregate amount available to be drawn under such Letter of
Credit. Each issuance of a Letter of Credit shall be deemed to utilize the
Revolving Commitment of each Lender by an amount equal to the amount of
such participation.
(b) To request the issuance of a Letter of Credit (or any amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower
shall give the Issuing Bank and the Administrative Agent irrevocable
written notice at least three (3) Business Days prior to the requested date
of such issuance specifying the date (which shall be a Business Day) such
Letter of Credit is to be issued (or amended, extended or renewed, as the
case may be), the expiration date of such Letter of Credit, the amount of
such Letter of Credit, the name and address of the beneficiary thereof and
such other information as shall be necessary to prepare, amend, renew or
extend such Letter of Credit. In addition to the
35
satisfaction of the conditions in Article III, the issuance of such Letter
of Credit (or any amendment which increases the amount of such Letter of
Credit) will be subject to the further conditions that such Letter of
Credit shall be in such form and contain such terms as the Issuing Bank
shall approve and that the Borrower shall have executed and delivered any
additional applications, agreements and instruments relating to such Letter
of Credit as the Issuing Bank shall reasonably require; provided, that in
the event of any conflict between such applications, agreements or
instruments and this Agreement, the terms of this Agreement shall control.
(c) At least two (2) Business Days prior to the issuance of any Letter
of Credit, the Issuing Bank will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has received such
notice and if not, the Issuing Bank will provide the Administrative Agent
with a copy thereof. Unless the Issuing Bank has received notice from the
Administrative Agent on or before the Business Day immediately preceding
the date the Issuing Bank is to issue the requested Letter of Credit (1)
directing the Issuing Bank not to issue the Letter of Credit because such
issuance is not then permitted hereunder because of the limitations set
forth in Section 2.24(a) or that one or more conditions specified in
Article III are not then satisfied, then, subject to the terms and
conditions hereof, the Issuing Bank shall, on the requested date, issue
such Letter of Credit in accordance with the Issuing Bank's usual and
customary business practices.
(d) The Issuing Bank shall examine all documents purporting to
represent a demand for payment under a Letter of Credit promptly following
its receipt thereof. The Issuing Bank shall notify the Borrower and the
Administrative Agent of such demand for payment and whether the Issuing
Bank has made or will make a LC Disbursement thereunder; provided, that any
failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse the Issuing Bank and the Lenders
with respect to such LC Disbursement. The Borrower shall be irrevocably and
unconditionally obligated to reimburse the Issuing Bank for any LC
Disbursements paid by the Issuing Bank in respect of such drawing, without
presentment, demand or other formalities of any kind. Unless the Borrower
shall have notified the Issuing Bank and the Administrative Agent prior to
11:00 a.m. on the Business Day immediately prior to the date on which such
drawing is honored that the Borrower intends to reimburse the Issuing Bank
for the amount of such drawing in funds other than from the proceeds of
Revolving Loans, the Borrower shall be deemed to have timely given a Notice
of Revolving Borrowing to the Administrative Agent requesting the Lenders
to make a Base Rate Borrowing on the date on which such drawing is honored
in an exact amount due to the Issuing Bank; provided, that for purposes
solely of such Borrowing, the conditions precedents set forth in Section
3.2 hereof shall not be applicable. The Administrative Agent shall notify
the Lenders of such Borrowing in accordance with Section 2.3, and each
Lender shall make the proceeds of its Base Rate Loan included in such
Borrowing available to the Administrative Agent for the account of the
Issuing Bank in accordance with Section 2.8. The proceeds of such Borrowing
shall be applied directly by the Administrative Agent to reimburse the
Issuing Bank for such LC Disbursement.
36
(e) If for any reason a Base Rate Borrowing may not be (as determined
in the sole discretion of the Administrative Agent), or is not, made in
accordance with the foregoing provisions, then each Lender (other than the
Issuing Bank) shall be obligated to fund the participation that such Lender
purchased pursuant to subsection (a) in an amount equal to its Pro Rata
Share of such LC Disbursement on and as of the date which such Base Rate
Borrowing should have occurred. Each Lender's obligation to fund its
participation shall be absolute and unconditional and shall not be affected
by any circumstance, including without limitation (i) any setoff,
counterclaim, recoupment, defense or other right that such Lender or any
other Person may have against the Issuing Bank or any other Person for any
reason whatsoever, (ii) the existence of a Default or an Event of Default
or the termination of the Aggregate Revolving Commitments, (iii) any
adverse change in the condition (financial or otherwise) of the Borrower or
any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower
or any other Lender, (v) any amendment, renewal or extension of any Letter
of Credit or (vi) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing. On the date that such
participation is required to be funded, each Lender shall promptly
transfer, in immediately available funds, the amount of its participation
to the Administrative Agent for the account of the Issuing Bank. Whenever,
at any time after the Issuing Bank has received from any such Lender the
funds for its participation in a LC Disbursement, the Issuing Bank (or the
Administrative Agent on its behalf) receives any payment on account
thereof, the Administrative Agent or the Issuing Bank, as the case may be,
will distribute to such Lender its Pro Rata Share of such payment;
provided, that if such payment is required to be returned for any reason to
the Borrower or to a trustee, receiver, liquidator, custodian or similar
official in any bankruptcy proceeding, such Lender will return to the
Administrative Agent or the Issuing Bank any portion thereof previously
distributed by the Administrative Agent or the Issuing Bank to it.
(f) To the extent that any Lender shall fail to pay any amount
required to be paid pursuant to paragraph (d) of this Section 2.24 on the
due date therefor, such Lender shall pay interest to the Issuing Bank
(through the Administrative Agent) on such amount from such due date to the
date such payment is made at a rate per annum equal to the Federal Funds
Rate; provided, that if such Lender shall fail to make such payment to the
Issuing Bank within three (3) Business Days of such due date, then,
retroactively to the due date, such Lender shall be obligated to pay
interest on such amount at the Default Rate.
(g) If any Event of Default shall occur and be continuing, on the
Business Day that the Borrower receives notice from the Administrative
Agent or the Required Lenders demanding the deposit of cash collateral
pursuant to this paragraph, the Borrower shall deposit in an account with
the Administrative Agent, in the name of the Administrative Agent and for
the benefit of the Lenders, an amount in cash equal to the LC Exposure as
of such date plus any accrued and unpaid interest thereon; provided, that
the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable,
with demand or notice of any kind, upon the occurrence of any Event of
Default with respect to the Borrower described in clause (g) or (h) of
Section 8.1. Such deposit shall be held by the Administrative Agent as
collateral for the payment and performance of the obligations of the
Borrower under this
37
Agreement. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account.
Other than any interest earned on the investment of such deposits, which
investments shall be made at the option and sole discretion of the
Administrative Agent and at the Borrower's risk and expense, such deposits
shall not bear interest. Interest and profits, if any, on such investments
shall accumulate in such account. Moneys in such account shall applied by
the Administrative Agent to reimburse the Issuing Bank for LC Disbursements
for which it had not been reimbursed and to the extent so applied, shall be
held for the satisfaction of the reimbursement obligations of the Borrower
for the LC Exposure at such time or, if the maturity of the Loans has been
accelerated, with the consent of the Required Lenders, be applied to
satisfy other obligations of the Borrower under this Agreement. If the
Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent
not so applied as aforesaid) shall be returned to the Borrower with three
Business Days after all Events of Default have been cured or waived.
(h) Promptly following the end of each fiscal quarter, the Issuing
Bank shall deliver (through the Administrative Agent) to each Lender and
the Borrower a report describing the aggregate Letters of Credit
outstanding at the end of such fiscal quarter. Upon the request of any
Lender from time to time, the Issuing Bank shall deliver to such Lender any
other information reasonably requested by such Lender with respect to each
Letter of Credit then outstanding.
(i) The Borrower's obligation to reimburse LC Disbursements hereunder
shall be absolute, unconditional and irrevocable and shall be performed
strictly in accordance with the terms of this Agreement under all
circumstances whatsoever and irrespective of any of the following
circumstances:
(i) Any lack of validity or enforceability of any Letter of
Credit or this Agreement;
(ii) The existence of any claim, set-off, defense or other right
which the Borrower or any Subsidiary or Affiliate of the Borrower may
have at any time against a beneficiary or any transferee of any Letter
of Credit (or any Persons or entities for whom any such beneficiary or
transferee may be acting), any Lender (including the Issuing Bank) or
any other Person, whether in connection with this Agreement or the
Letter of Credit or any document related hereto or thereto or any
unrelated transaction;
(iii) Any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or
any statement therein being untrue or inaccurate in any respect;
(iv) Any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of, or provide
a right of setoff against, the Borrower's obligations hereunder; or
38
(v) The existence of a Default or an Event of Default.
Neither the Administrative Agent, the Issuing Bank, the Lenders nor any
Related Party of any of the foregoing shall have any liability or
responsibility by reason of or in connection with the issuance or transfer
of any Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to above), or
any error, omission, interruption, loss or delay in transmission or
delivery of any draft, notice or other communication under or relating to
any Letter of Credit (including any document required to make a drawing
thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the Issuing Bank;
provided, that the foregoing shall not be construed to excuse the Issuing
Bank from liability to the Borrower to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered
by the Borrower that are caused by the Issuing Bank's failure to exercise
care when determining whether drafts or other documents presented under a
Letter of Credit comply with the terms thereof. The parties hereto
expressly agree, that in the absence of gross negligence or willful
misconduct on the part of the Issuing Bank (as finally determined by a
court of competent jurisdiction), the Issuing Bank shall be deemed to have
exercised care in each such determination. In furtherance of the foregoing
and without limiting the generality thereof, the parties agree that, with
respect to documents presented that appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing
Bank may, in its sole discretion, either accept and make payment upon such
documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make
payment upon such documents if such documents are not in strict compliance
with the terms of such Letter of Credit.
(j) Unless otherwise expressly agreed by the Issuing Bank and the
Borrower when a Letter of Credit is issued and subject to applicable laws,
performance under Letters of Credit by the Issuing Bank, its
correspondents, and the beneficiaries thereof will be governed by the rules
of the "International Standby Practices 1998" (ISP98) (or such later
revision as may be published by the Institute of International Banking Law
& Practice on any date any Letter of Credit may be issued)and to the extent
not inconsistent therewith, the governing law of this Agreement set forth
in Section 10.5.
ARTICLE III
CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT
SECTION 3.1 Conditions To Effectiveness. The obligations of the Lenders
(including the Swingline Lender) to make Loans and the obligation of the Issuing
Bank to issue any Letter of Credit hereunder shall not become effective until
the date on which each of the following conditions is satisfied (or waived in
accordance with Section 10.2).
(a) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Closing Date, including
reimbursement or payment of all reasonable out-of-pocket expenses
(including reasonable fees, charges and
39
disbursements of counsel to the Administrative Agent) required to be
reimbursed or paid by the Borrower hereunder, under any other Loan Document
and under any agreement with the Administrative Agent or SunTrust Capital
Markets, Inc., as a sole lead arranger.
(b) The Administrative Agent (or its counsel) shall have received the
following:
(i) a counterpart of this Agreement signed by or on behalf of
each party thereto or written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a
signed signature page of this Agreement) that such party has signed a
counterpart of this Agreement;
(ii) duly executed Notes payable to each Lender;
(iii) a duly executed Subsidiary Guarantee Agreement and
Indemnity and Contribution Agreement;
(iv) duly executed Security Documents (excluding the Collateral
Assignment of Life Insurance);
(v) a certificate of the Secretary or Assistant Secretary of each
Loan Party, attaching and certifying copies of its bylaws and of the
resolutions of its boards of directors, authorizing the execution,
delivery and performance of the Loan Documents to which it is a party
and certifying the name, title and true signature of each officer of
such Loan Party executing the Loan Documents to which it is a party;
(vi) certified copies of the articles of incorporation or other
charter documents of each Loan Party, together with certificates of
good standing or existence, as may be available from the Secretary of
State of the jurisdiction of incorporation of such Loan Party and each
other jurisdiction where such Loan Party is required to be qualified
to do business as a foreign corporation;
(vii) a written opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel to the
Loan Parties, addressed to the Administrative Agent and each of the
Lenders, and covering such matters relating to the Loan Parties, the
Loan Documents and the transactions contemplated therein as the
Administrative Agent or the Required Lenders shall reasonably request;
(viii) a certificate, dated the Closing Date and signed by a
Responsible Officer, confirming compliance with the conditions set
forth in paragraphs (a), (b) and (c) of Section 3.2; and
(ix) duly executed Notices of Borrowing, if applicable.
(c) Perfection and Priority of Liens. Receipt by the Administrative
Agent of lien searches, UCC financing statements and other filings and
documentation for each appropriate jurisdiction as is necessary, in the
Administrative Agent's reasonable
40
judgment, to perfect the Administrative Agent's first priority Liens
(subject to Permitted Encumbrances) created under the Security Documents;
(d) Evidence of Insurance. Receipt by the Administrative Agent of
copies of insurance policies or certificates of insurance with respect to
the Borrower and its Subsidiaries evidencing liability and casualty
insurance, which complies with the requirements set forth in the Loan
Documents and describes in reasonable detail the types and amounts of
coverage, naming the Administrative Agent as additional insured and loss
payee, as appropriate;
(e) Loan Document Consents. Receipt by the Administrative Agent of
evidence that all governmental, shareholder and material third party
consents and approvals which are required for the consummation and
enforceability of the Acquisition and the transactions contemplated thereby
have been obtained;
(f) Acquisition Documentation. The Administrative Agent shall have
received: (i) an executed copy of the Purchase Agreement and all schedules
and exhibits thereto and all other material agreements executed in
connection therewith, and (ii) a certificate or certificates executed by a
Responsible Officer of the Borrower as of the Closing Date, in form and
substance satisfactory to the Administrative Agent, stating that the
Acquisition has been, or concurrently with the consummation of the making
of Loans will be consummated in accordance with the terms of the Purchase
Agreement without any amendment thereto or material waiver thereof, except
for amendments or waivers approved by the Administrative Agent in writing;
(g) Acquisition Consents. Delivery of all material consents,
approvals, authorizations, registrations, or filings required to be made or
obtained by the Borrower in connection with the Acquisition and such
consents, approvals, authorizations, registrations, filings and orders
shall be in full force and effect and all applicable waiting periods shall
have expired, and no investigation or inquiry by any Governmental Authority
regarding the Acquisition shall exist; and
(h) Financial Statements. Receipt by the Administrative Agent of: (i)
the audited consolidated financial statements of the Borrower for the
fiscal years ending June 30, 2004 and June 30, 2005, including balance
sheets, income statement and cash flows statements and other financial
information reasonably requested by the Administrative Agent; (ii) annual
Statutory Statements for each Insurance Company for the period ending
December 31, 2004; and (iii) the statement regarding reserves for each
Insurance Company as described in Section 5.1(i), for the period ending
December 31, 2004.
The parties hereto agree that: (i) the executed Collateral Assignment of
Life Insurance shall be delivered to the Administrative Agent within sixty (60)
days of the Closing Date; and (ii) the Borrower will deliver within sixty (60)
days of the Closing Date, such documents and instruments necessary to perfect
the Administrative Agent's security interest in any aircraft granted pursuant to
the Borrower Security Agreement.
41
SECTION 3.2 Each Credit Event. The obligation of each Lender to make a Loan
on the occasion of any Borrowing (other than the initial Borrowings on the
Closing Date) and of the Issuing Bank to issue, amend, renew or extend any
Letter of Credit is subject to the satisfaction of the following conditions:
(a) at the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, no Default or Event of Default shall exist; and
(b) all representations and warranties of each Loan Party set forth in
the Loan Documents shall be true and correct in all material respects on
and as of the date of such Borrowing or the date of issuance, amendment,
extension or renewal of such Letter of Credit, in each case before and
after giving effect thereto, except for representation and warranties
expressly relating to an earlier date or changes resulting from
transactions permitted by this Agreement;
(c) since the date of the most recent financial statements of the
Borrower described in Section 5.1(a), there shall have been no change which
has had or could reasonably be expected to have a Material Adverse Effect;
and
(d) the Administrative Agent shall have received such other documents,
certificates or information as the Administrative Agent or the Required
Lenders may reasonably request, all in form and substance reasonably
satisfactory to the Administrative Agent or the Required Lenders.
Each Borrowing (other than the initial Borrowing on the Closing Date) and
each issuance, amendment, extension or renewal of any Letter of Credit shall be
deemed to constitute a representation and warranty by the Borrower on the date
thereof as to the matters specified in paragraphs (a), (b) and (c) of this
Section 3.2.
SECTION 3.3 Delivery of Documents. All of the Loan Documents, certificates,
legal opinions and other documents and papers referred to in this Article III,
unless otherwise specified, shall be delivered to the Administrative Agent for
the account of each of the Lenders and, except for the Notes, in sufficient
counterparts or copies for each of the Lenders and shall be in form and
substance satisfactory in all respects to the Administrative Agent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and each
Lender as follows:
SECTION 4.1 Existence; Power. The Borrower and each of its Subsidiaries (i)
is duly organized, validly existing and in good standing as a corporation under
the laws of the jurisdiction of its organization, (ii) has all requisite power
and authority to carry on its business as now conducted, and (iii) is duly
qualified to do business, and is in good standing, in each
42
jurisdiction where such qualification is required, except where a failure to be
so qualified could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 4.2 Organizational Power; Authorization. The execution, delivery
and performance by each Loan Party of the Loan Documents to which it is a party
are within such Loan Party's organizational powers and have been duly authorized
by all necessary organizational action. This Agreement has been duly executed
and delivered by the Borrower, and constitutes, and each other Loan Document to
which any Loan Party is a party, when executed and delivered by such Loan Party,
will constitute, valid and binding obligations of the Borrower or such Loan
Party (as the case may be), enforceable against it in accordance with their
respective terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity.
SECTION 4.3 Governmental Approvals; No Conflicts. The execution, delivery
and performance by the Borrower of this Agreement, and by each Loan Party of the
other Loan Documents to which it is a party (a) do not require any consent or
approval of, registration or filing with, or any action by, any Governmental
Authority, except those as have been obtained or made and are in full force and
effect or where the failure to do so, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of the Borrower or any of its Subsidiaries or any order
of any Governmental Authority, (c) will not violate or result in a default under
any indenture, agreement or other instrument binding on the Borrower or any of
its Subsidiaries or any of its assets or give rise to a right thereunder to
require any payment to be made by the Borrower or any of its Subsidiaries except
to the extent that such violation or default would not reasonably be expected to
have a Material Adverse Effect and (d) will not result in the creation or
imposition of any Lien on any asset of the Borrower or any of its Subsidiaries,
except Liens (if any) created under the Loan Documents.
SECTION 4.4 Financial Statements. The Borrower has furnished to each Lender
(i) the audited consolidated balance sheet of the Borrower and its Subsidiaries
as of June 30, 2005 and the related consolidated statements of income,
shareholders' equity and cash flows for the fiscal year then ended audited by
KPMG LLP and (ii) the annual Statutory Statements of each of the Insurance
Companies as of December 31, 2004. Such financial statements and Statutory
Statements fairly present in all material respects the consolidated financial
condition of the Borrower and its Subsidiaries or the respective Insurance
Companies, as applicable, as of such dates in conformity with GAAP or SAP, as
applicable, consistently applied except as noted therein. As of the Closing
Date, since the date of such financial statements and Statutory Statements,
there have been no changes which have had or could reasonably be expected to
have, singly or in the aggregate, a Material Adverse Effect.
SECTION 4.5 Litigation and Environmental Matters.
(a) No litigation, investigation or proceeding of or before any
arbitrators or Governmental Authorities is pending against or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or
any of its Subsidiaries (i) as to which
43
there is a reasonable possibility of an adverse determination that would
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect or (ii) which in any manner draws into question the
validity or enforceability of this Agreement or any other Loan Document.
The Borrower hereby discloses in Schedule 4.5, current litigation and
represents and warrants that such litigation set forth in Schedule 4.5 is
not reasonably expected to have a Material Adverse Effect.
(b) Neither the Borrower nor any of its Subsidiaries (i) has failed to
comply with any Environmental Law or to obtain, maintain or comply with any
material permit, license or other approval required under any Environmental
Law, (ii) has become subject to any Environmental Liability which is
material, (iii) has received written notice of any claim with respect to
any Environmental Liability which is material, or (iv) has actual knowledge
of any basis for any Environmental Liability which is material.
SECTION 4.6 Compliance with Laws and Agreements. The Borrower and each
Subsidiary is in compliance with (a) all applicable laws, rules, regulations and
orders of any Governmental Authority, and (b) all indentures, agreements or
other instruments binding upon it or its properties, except where
non-compliance, either singly or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect.
SECTION 4.7 Investment Company Act, Etc. Neither the Borrower nor any of
its Subsidiaries is (a) an "investment company", as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended, (b) a "holding
company" as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935, as amended or (c) otherwise subject to any other
regulatory scheme limiting its ability to incur debt.
SECTION 4.8 Taxes. The Borrower and its Subsidiaries have timely filed or
caused to be filed all Federal income tax returns and all other material tax
returns that are required to be filed by them, and have paid all taxes shown to
be due and payable on such returns or on any assessments made against it or its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority, except (i) to the extent the failure to
do so would not reasonably be expected to have a Material Adverse Effect or (ii)
where the same are currently being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as the case may be,
has set aside on its books adequate reserves.
SECTION 4.9 Margin Regulations. None of the proceeds of any of the Loans or
Letters of Credit will be used for "purchasing" or "carrying" any "margin stock"
with the respective meanings of each of such terms under Regulation U as now and
from time to time hereafter in effect or for any purpose that violates the
provisions of the applicable Margin Regulations.
SECTION 4.10 ERISA. No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than
$500,000 the fair market value of the assets of such Plan, and the present value
of all accumulated benefit
44
obligations of all underfunded Plans (based on the assumptions used for purposes
of Statement of Financial Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than
$500,000 the fair market value of the assets of all such underfunded Plans.
SECTION 4.11 Ownership of Property.
(a) Each of the Borrower and its Subsidiaries has good title to, or
valid leasehold interests in, all of its real and personal property
material to the operation of its business, subject only to Permitted
Encumbrances.
(b) Each of the Borrower and its Subsidiaries owns, or is licensed, or
otherwise has the right, to use, all patents, trademarks, service marks,
tradenames, copyrights and other intellectual property material to its
business, and the use thereof by the Borrower and its Subsidiaries does not
infringe on the rights of any other Person, except for any such
infringements that, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect.
SECTION 4.12 Disclosure. The Borrower has disclosed to the Lenders all
agreements, instruments, and corporate or other restrictions to which the
Borrower or any of its Subsidiaries is subject, and all other matters known to
any of them, that, individually or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect. No reports, financial
statements, certificates or other information furnished by or on behalf of the
Borrower to the Administrative Agent or any Lender in connection with the
negotiation or syndication of this Agreement or any other Loan Document or
delivered hereunder or thereunder (as modified or supplemented by any other
information so furnished) contains any material misstatement of material fact or
omits to state any material fact necessary to make the statements therein, taken
as a whole, in light of the circumstances under which they were made, not
materially misleading; provided, that with respect to projected financial
information and budgets, the Borrower represents only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time.
SECTION 4.13 Labor Relations. There are no strikes, lockouts or other
material labor disputes or grievances against the Borrower or any of its
Subsidiaries, or, to the Borrower's knowledge, threatened against or affecting
the Borrower or any of its Subsidiaries, and no significant unfair labor
practice, charges or grievances are pending against the Borrower or any of its
Subsidiaries, or to the Borrower's knowledge, threatened against any of them
before any Governmental Authority which would reasonably be expected to have a
Material Adverse Effect. All payments due from the Borrower or any of its
Subsidiaries pursuant to the provisions of any collective bargaining agreement
have been paid or accrued as a liability on the books of the Borrower or any
such Subsidiary, except where the failure to do so would not reasonably be
expected to have a Material Adverse Effect.
SECTION 4.14 Subsidiaries. Schedule 4.14 sets forth the name of, the
ownership interest of the Borrower in, the jurisdiction of incorporation of, and
the type of, each Subsidiary and identifies each Subsidiary that is a Subsidiary
Loan Party, in each case as of the Closing Date.
45
SECTION 4.15 Acquisition Matters.
(a) Upon payment of the purchase price under the Purchase Agreement,
the Acquired Assets (such terms being used in this Section as defined in
the Purchase Agreement) and have been validly assigned to, and assumed by,
the purchaser therein, free and clear of any Liens, other than Liens which
are permitted herein or in the Security Documents..
(b) No material filings, approvals, consents, orders or
authorizations, with or from any Governmental Authority (which has not been
secured) is required for the consummation of the transactions contemplated
by the Purchase Agreement.
(c) The Purchase Agreement and all other material agreements executed
in connection therewith, are valid and binding obligations of the parties
thereto (except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity), and the
Acquisition has been consummated in accordance with the terms of the
Purchase Agreement without any material amendment thereto or material
waiver thereof, except for amendments or waivers approved by the
Administrative Agent in writing.
(d) All material agreements and understandings in connection with the
Acquisition have been disclosed in writing to the Administrative Agent.
SECTION 4.16 Foreign Assets Control Regulations, etc. Neither the making of
any Loan nor the use of the proceeds thereof will violate (a) the Trading with
the Enemy Act, as amended, or any of the foreign assets control regulations of
the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) or any enabling legislation or executive order relating thereto, (b)
the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (the "Patriot Act") or (c)
Executive Order No. 13,224, 66 Fed. Reg. 49,079 (2001), issued by the President
of the United States (Executive Order Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit or Support Terrorism).
Without limiting the foregoing, neither Borrower nor any of its Subsidiaries is
or will become a "blocked person" as described in Section 1 of such Executive
Order or engages or will engage in any dealings or transactions with, or is
otherwise associated with, any such blocked person.
SECTION 4.17 Licenses. Each Insurance Company holds a valid License to
carry on its operations and there is no litigation, investigation or proceeding
before any Governmental Authority which could reasonably be expected to have any
adverse effect on the status of any material License.
46
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that so long as any Lender has a
Commitment hereunder or the principal of and interest on any Loan or any fee or
any LC Disbursement remains unpaid or any Letter of Credit remains outstanding:
SECTION 5.1 Financial Statements and Other Information. The Borrower will
deliver to the Administrative Agent and each Lender:
(a) as soon as available and in any event within 90 days after the end
of each fiscal year of Borrower, a copy of the annual audited report for
such fiscal year for the Borrower and its Subsidiaries, containing a
consolidated balance sheet of the Borrower and its Subsidiaries as of the
end of such fiscal year and the related consolidated statements of income,
stockholders' equity and cash flows (together with all footnotes thereto)
of the Borrower and its Subsidiaries for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal year, all
in reasonable detail and reported on by Ernst & Young LLP or other
independent public accountants of nationally recognized standing (without a
"going concern" or like qualification, exception or explanation and without
any qualification or exception as to scope of such audit) to the effect
that such financial statements present fairly in all material respects the
financial condition and the results of operations of the Borrower and its
Subsidiaries for such fiscal year on a consolidated basis in accordance
with GAAP and that the examination by such accountants in connection with
such consolidated financial statements has been made in accordance with
generally accepted auditing standards;
(b) as soon as available and in any event within 45 days after the end
of each of the first three fiscal quarters of each fiscal year of the
Borrower, an unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such fiscal quarter and the related unaudited
consolidated statements of income and cash flows of the Borrower and its
Subsidiaries for such fiscal quarter and the then elapsed portion of such
fiscal year, setting forth in each case in comparative form the figures for
the corresponding quarter and the corresponding portion of Borrower's
previous fiscal year, all certified by the chief financial officer or
treasurer of the Borrower as presenting fairly in all material respects the
financial condition and results of operations of the Borrower and its
Subsidiaries on a consolidated basis in accordance with GAAP, subject to
normal year-end audit adjustments and the absence of footnotes;
(c) concurrently with the delivery of the financial statements
referred to in clauses (a) and (b) above, a certificate of a Responsible
Officer, (i) certifying as to whether such officer has knowledge of the
existence of a Default or Event of Default on the date of such certificate,
and if a Default or an Event of Default then exists, specifying the details
thereof and the action which the Borrower has taken or proposes to take
with respect thereto, (ii) setting forth in reasonable detail calculations
demonstrating compliance with Article VI and (iii) stating whether any
change in GAAP or the application thereof has occurred since the date of
the Borrower's audited financial
47
statements referred to in Section 4.4 and, if any change has occurred,
specifying the effect of such change on the financial statements
accompanying such certificate;
(d) Upon the earlier of (i) 10 days after the required regulatory
filing date or (ii) 75 days after the close of each of the first three
fiscal quarters of each fiscal year of each Insurance Company, copies of
each quarterly Statutory Statement of such Insurance Company, certified by
the Chief Financial Officer or treasurer of the Borrower as presenting
fairly in all material respects the financial condition and results of
operations of such Insurance Company, in accordance with SAP consistently
applied through the period reflected therein;
(e) Upon the earlier of (i) 15 days after the required regulatory
filing date or (ii) 90 days after the close of each fiscal year of each
Insurance Company, copies of the annual Statutory Statement of such
Insurance Company and the related management discussion and analysis for
such fiscal year, as certified by the Chief Financial Officer or treasurer
of the Borrower as presenting fairly in all material respects the financial
condition and results of operations of such Insurance Company in accordance
with SAP consistently applied throughout the period reflected therein;
(f) As soon as available and only to the extent such an audited
statement is required by any Governmental Authority to be prepared, a copy
of the audited annual statement of each Insurance Company for the preceding
year, as certified by such officers as shall be required by SAP for such
Insurance Company and prepared on the NAIC annual statement blanks (or such
other form as shall be required by the jurisdiction of incorporation of
each such Insurance Company), all such statements to be prepared in
accordance with SAP consistently applied throughout the periods reflected
therein and to be certified by independent certified public accountants
acceptable under subsection (a) of this Section;
(g) promptly after the same become publicly available, copies of all
periodic and other material reports, proxy statements and other materials
filed with the Securities and Exchange Commission, or any Governmental
Authority succeeding to any or all functions of said Commission, or with
any national securities exchange, or distributed by the Borrower to its
shareholders generally, as the case may be;
(h) As promptly as reasonably practicable and in any event within 150
days after the end of each fiscal year, a report prepared by an actuary
qualified in accordance with NAIC standards reasonably satisfactory to the
Administrative Agent and addressed to the Administrative Agent, reviewing
the adequacy of reserves of each Insurance Company determined in accordance
with SAP, which firm shall be provided access to or copies of all reserve
analyses and valuations relating to the insurance business of each
Insurance Company in the possession of or available to the Borrower or its
Subsidiaries; and
(i) promptly following any request therefor, such other information
regarding the results of operations, business affairs and financial
condition of the Borrower or any Subsidiary as the Administrative Agent or
any Lender may reasonably request.
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SECTION 5.2 Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default or Event of Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or, to the
knowledge of the Borrower, affecting the Borrower or any Subsidiary which,
if adversely determined, would reasonably be expected to result in a
Material Adverse Effect or the loss or suspension of any material License;
(c) the occurrence of any event or any other development by which the
Borrower or any of its Subsidiaries (i) fails to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license
or other approval required under any Environmental Law, (ii) becomes
subject to any Environmental Liability, (iii) receives notice of any claim
with respect to any Environmental Liability, or (iv) becomes aware of any
basis for any Environmental Liability and in each of the preceding clauses,
which individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect;
(d) the occurrence of any ERISA Event that alone, or together with any
other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower and its Subsidiaries in an aggregate
amount exceeding $500,000; and
(e) any other development that results in, or would reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a written
statement of a Responsible Officer setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.
SECTION 5.3 Existence; Conduct of Business. The Borrower will, and will
cause each of its Subsidiaries to, do or cause to be done all things necessary
to preserve, renew and maintain in full force and effect its legal existence and
its respective rights, Licenses, permits, privileges, franchises, patents,
copyrights, trademarks and trade names material to the conduct of its business
and will continue to engage in the same business as presently conducted or such
other businesses that are reasonably related thereto; provided, that nothing in
this Section shall prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 7.3.
SECTION 5.4 Compliance with Laws, Etc. The Borrower will, and will cause
each of its Subsidiaries to, comply with all laws, rules, regulations and
requirements of any Governmental Authority applicable to its properties, except
where the failure to do so, either individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.5 Payment of Obligations. The Borrower will, and will cause each
of its Subsidiaries to, pay and discharge at or before maturity, all of its
material obligations and material liabilities (including without limitation all
tax liabilities and claims that could result in a statutory Lien) before the
same shall become delinquent or in default, except where (a) the
49
validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) the Borrower or such Subsidiary has set aside on its books
adequate reserves with respect thereto in accordance with GAAP and (c) the
failure to make payment pending such contest could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 5.6 Books and Records. The Borrower will, and will cause each of
its Subsidiaries to, keep proper books of record and account in which full, true
and correct entries shall be made of all dealings and transactions in relation
to its business and activities to the extent necessary to prepare the
consolidated financial statements of Borrower in conformity with GAAP.
SECTION 5.7 Visitation, Inspection, Etc. The Borrower will, and will cause
each of its Subsidiaries to, permit any representative of the Administrative
Agent or any Lender (at the cost of the Administrative Agent or such Lender
unless an Event of Default exists), to visit and inspect its properties, to
examine its books and records and to make copies and take extracts therefrom,
and to discuss its affairs, finances and accounts with any of its officers and
with its independent certified public accountants, all at such reasonable times
and as often as the Administrative Agent or any Lender may reasonably request
after reasonable prior notice to the Borrower.
SECTION 5.8 Maintenance of Properties; Insurance. The Borrower will, and
will cause each of its Subsidiaries to, (a) keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear and casualty loss excepted, except where the failure to
do so, either individually or in the aggregate, would not reasonably be expected
to result in a Material Adverse Effect and (b) maintain with financially sound
and reputable insurance companies, insurance with respect to its properties and
business, and the properties and business of its Subsidiaries, against loss or
damage of the kinds customarily insured against by companies of similar size in
the same or similar businesses operating in the same or similar locations, which
are similarly situated.
SECTION 5.9 Use of Proceeds and Letters of Credit. The Borrower will use
the proceeds of Revolving Loans to finance working capital needs, for
acquisitions permitted hereunder, and for general corporate purposes of the
Borrower and its Subsidiaries. The Borrower shall use the proceeds of the Term
Loan and the Revolving Loans to pay the purchase price under the Purchase
Agreement, fees and expenses related to the Acquisition, and fees and expenses
in connection with the Loan Documents and the transactions contemplated thereby.
Letters of Credit shall be used for general corporate purposes.
SECTION 5.10 Additional Subsidiaries. If any additional Subsidiary is
acquired or formed after the Closing Date, the Borrower will, within ten (10)
business days after such Subsidiary is acquired or formed (a) notify the
Administrative Agent thereof, (b) [if such Subsidiary is not an Insurance
Company] cause such Subsidiary to become a Subsidiary Loan Party by executing
agreements in the form of Annex I to Exhibit E and Annex I to Exhibit F in form
and substance satisfactory to the Administrative Agent, (c) [if such Subsidiary
is not an Insurance Company] cause such new Subsidiary to execute a Subsidiary
Security Agreement in substantially the same form and granting a security
interest in substantially the same collateral as the Subsidiary Security
Agreements executed on the Closing Date, and (d) cause such Subsidiary to
deliver
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simultaneously therewith similar documents applicable to such Subsidiary
required under Section 3.1 as reasonably requested by the Administrative Agent.
SECTION 5.11 Additional Accounts. Within 90 days after the Closing Date,
the Borrower will use its best efforts to move its primary treasury management
arrangements to SunTrust Bank and will thereafter maintain its primary treasury
management arrangements and primary deposit accounts with SunTrust Bank (or
financial institutions reasonably acceptable to SunTrust Bank) it being
understood that Borrower and its Subsidiaries will maintain other accounts and
services with other financial institutions to the extent it is commercially
reasonable to do so.
ARTICLE VI
FINANCIAL COVENANTS
The Borrower covenants and agrees that so long as any Lender has a
Commitment hereunder or the principal of or interest on or any Loan remains
unpaid or any fee or any LC Disbursement remains unpaid or any Letter of Credit
remains outstanding:
SECTION 6.1 Fixed Charge Coverage Ratio. The Borrower will have on a
consolidated basis, as of the end of each fiscal quarter of the Borrower
(measured for such fiscal quarter and the three immediately preceding fiscal
quarters), commencing with the fiscal quarter ending March 31, 2006, a Fixed
Charge Coverage Ratio of not less than 1.5 to 1.0.
SECTION 6.2 Consolidated Tangible Net Worth. The Borrower will not permit
its Consolidated Tangible Net Worth at any time to be less than $85,000,000,
plus 50% of Consolidated Net Income on a cumulative basis for all preceding
fiscal quarters of the Borrower, commencing with the fiscal quarter ending March
31, 2006; provided, that if Consolidated Net Income is negative in any fiscal
quarter the amount added for such fiscal quarter shall be zero and such negative
Consolidated Net Income shall not reduce the amount of Consolidated Net Income
added from any previous fiscal quarter. The amount of Consolidated Tangible Net
Worth set forth above shall be increased by 100% of the amount by which the
Borrower's "total stockholders' equity" is increased as a result of any public
or private offering of common stock of the Borrower after the Closing Date.
SECTION 6.3 Net Premiums Written to Surplus. Each Insurance Company will
severally maintain, as of the last day of each fiscal quarter commencing with
the fiscal quarter ending March 31, 2006, a ratio of Net Premiums Written
(measured for such fiscal quarter and the three immediately preceding fiscal
quarters) to Surplus/Surplus as Regards Policyholders (at the end of each fiscal
quarter) not to exceed 3.0 to 1.0.
SECTION 6.4 Combined Ratio. The Insurance Companies will maintain on a
consolidated basis, as of the last day of each fiscal quarter (measured for such
fiscal quarter and the three immediately preceding fiscal quarters), commencing
with the fiscal quarter ending March 31, 2006, a Combined Ratio not to exceed
95%.
SECTION 6.5 Minimum Risk Based Capital Ratio. Each Insurance Company will
severally maintain, as of the end of each calendar year, commencing with the
calendar year ending December 31, 2006, a Risk Based Capital Ratio of not less
than 2.15 to 1.0.
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ARTICLE VII
NEGATIVE COVENANTS
The Borrower covenants and agrees that so long as any Lender has a
Commitment hereunder or the principal of or interest on any Loan remains unpaid
or any fee or any LC Disbursement remains unpaid or any Letter of Credit remains
outstanding:
SECTION 7.1 Indebtedness. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness,
except:
(a) Indebtedness created pursuant to the Loan Documents;
(b) Indebtedness existing on the date hereof and set forth on Schedule
7.1 and extensions, renewals and replacements of any such Indebtedness that
do not increase the outstanding principal amount thereof (immediately prior
to giving effect to such extension, renewal or replacement) or shorten the
maturity or the weighted average life thereof;
(c) Indebtedness of the Borrower owing to any Subsidiary and of any
Subsidiary owing to the Borrower or any other Subsidiary;
(d) Guarantees by the Borrower of Indebtedness of any Subsidiary and
by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary;
(e) Indebtedness constituting Performance Payments as such term is
defined in the Purchase Agreement, not to exceed in the aggregate
$4,000,000;
(f) endorsements for collection, deposit or negotiation in each case
incurred in the ordinary course of business;
(g) current trade liabilities on open account for the purchase price
of services, materials and supplies incurred by the Borrower and its
Subsidiaries in the ordinary course of business (not as a result of
borrowing);
(h) Indebtedness in respect of obligations under Hedging Agreements
permitted by Section 7.10; and
(i) other Indebtedness in an aggregate principal amount not to exceed
$3,000,000 at any time outstanding.
SECTION 7.2 Negative Pledge. The Borrower will not, and will not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien on any
of its assets or property now owned or hereafter acquired, except:
(a) Liens created in favor of the Administrative Agent for the benefit
of the Lenders pursuant to the Loan Documents;
52
(b) Permitted Encumbrances;
(c) any Liens on any property or asset of the Borrower or any
Subsidiary existing on the Closing Date set forth on Schedule 7.2;
provided, that such Lien shall not apply to any other property or asset of
the Borrower or any Subsidiary;
(d) purchase money Liens upon or in any fixed or capital assets to
secure the purchase price of such capital assets (including Liens securing
any Capital Lease Obligations); provided, that (i) such Lien attaches to
such asset concurrently or within 90 days after the acquisition thereof;
(ii) such Lien does not extend to any other asset; and (iii) the
Indebtedness secured thereby does not exceed the cost of acquiring such
capital assets;
(e) any Lien (i) existing on any asset of any Person at the time such
Person becomes a Subsidiary of the Borrower, (ii) existing on any asset of
any Person at the time such Person is merged with or into the Borrower or
any Subsidiary of the Borrower or (iii) existing on any asset prior to the
acquisition thereof by the Borrower or any Subsidiary of the Borrower;
provided, that any such Lien was not created in the contemplation of any of
the foregoing and any such Lien secures only those obligations which it
secures on the date that such Person becomes a Subsidiary or the date of
such merger or the date of such acquisition;
(f) Liens in connection with permitted Hedging Agreements;
(g) Liens in connection with the financing of insurance premiums only
to the extent of such Lien attaches only to the proceeds of the insurance
policies financed;
(h) Liens encumbering customary initial deposits and margin deposits,
and similar Liens and margin deposits, and similar Liens attaching to
commodity trading accounts or other brokerage accounts incurred in the
ordinary course of business;
(i) Liens securing reimbursement obligations in respect of documentary
letters of credit or bankers' acceptances; provided that such Liens attach
only to the documents, the goods covered thereby and proceeds thereof;
(j) Licenses, sublicenses, leases or subleases granted to third
parties in the ordinary course of business not interfering with the
business of the Borrower or any of its Subsidiaries;
(k) rights of setoff or bankers' Liens upon deposits of cash in favor
of banks or other depository institutions and Liens associated with
overdraft protection and netting services;
(l) Liens deemed to exist in connection with permitted repurchase
obligations or set-off rights;
(m) precautionary financing statements filed in connection with
operating leases;
53
(n) Other Liens not specifically listed above securing Indebtedness or
encumbering assets not to exceed $250,000 outstanding at any one time in
the aggregate; and
(o) extensions, renewals, or replacements of any Lien referred to in
paragraphs (a) through (n) of this Section; provided, that the principal
amount of the Indebtedness secured thereby is not increased and that any
such extension, renewal or replacement is limited to the assets originally
encumbered thereby.
SECTION 7.3 Fundamental Changes.
(a) The Borrower will not, and will not permit any Subsidiary to,
merge into or consolidate into any other Person, or permit any other Person
to merge into or consolidate with it, or sell, lease, transfer or otherwise
dispose of (in a single transaction or a series of transactions) all or
substantially all of its assets (in each case, whether now owned or
hereafter acquired) or all or substantially all of the stock of any of its
Subsidiaries (in each case, whether now owned or hereafter acquired) or
liquidate or dissolve; provided, that if at the time thereof and
immediately after giving effect thereto, no Default or Event of Default
shall have occurred and be continuing (i) the Borrower or any Subsidiary
may merge with a Person if the Borrower (or a Subsidiary Loan Party, if the
Borrower is not a party to such merger) is the surviving Person, (ii) any
Subsidiary may merge into another Subsidiary; provided, that if any party
to such merger is a Subsidiary Loan Party, the Subsidiary Loan Party shall
be the surviving Person, (iii) any Subsidiary may sell, transfer, lease or
otherwise dispose of all or substantially all of its assets to the Borrower
or to a Subsidiary Loan Party; (iv) and Insurance Company Subsidiary may
merge into another Insurance Company Subsidiary; provided, that any such
merger involving a Person that is not a wholly-owned Subsidiary immediately
prior to such merger shall not be permitted unless also permitted by
Section 7.4.
(b) The Borrower will not, and will not permit any of its Subsidiaries
to, engage to any material extent in any business other than businesses of
the type conducted by the Borrower and its Subsidiaries on the Closing Date
and businesses reasonably related thereto.
SECTION 7.4 Investments, Loans, Etc. The Borrower will not, and will not
permit any of its Subsidiaries to, purchase, hold or acquire (including pursuant
to any merger with any Person that was not a wholly-owned Subsidiary prior to
such merger), any common stock, evidence of indebtedness or other securities
(including any option, warrant, or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, Guarantee any obligations
of, or make or permit to exist any investment or any other interest in, any
other Person (all of the foregoing being collectively called "INVESTMENTS"), or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person that constitute a business unit, except:
(a) Investments (other than Permitted Investments) existing on the
date hereof and set forth on Schedule 7.4 (including Investments in
Subsidiaries);
54
(b) Permitted Investments;
(c) Guarantees constituting Indebtedness permitted by Section 7.1;
(d) loans or advances to employees, officers or directors of the
Borrower or any Subsidiary in the ordinary course of business for travel,
relocation and related expenses;
(e) Hedging Agreements permitted by Section 7.10;
(f) Investments by Loan Parties and Subsidiaries in other Loan Parties
and Subsidiaries;
(g) Permitted Acquisitions;
(h) Investments in deposit accounts opened in the ordinary course of
business;
(i) Investments that could have been made as Restricted Payments under
Section 7.5;
(j) notes taken in the ordinary course of business for unpaid
insurance claims owed to Borrower or its Subsidiaries; and
(k) other Investments which do not exceed $1,000,000 in the aggregate
at any time. For purposes of calculation, the amount of such Investment
outstanding at any time shall be the aggregate cash Investment less all
cash returns, cash dividends and cash distributions (or the fair market
value of any non-cash returns, dividends and distributions) received by
such Person.
SECTION 7.5 Restricted Payments. The Borrower will not, and will not permit
its Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any dividend on any class of its stock, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, retirement, defeasance or other acquisition of, any shares
of common stock or Indebtedness subordinated to the Obligations of the Borrower
or any options, warrants, or other rights to purchase such common stock or such
Indebtedness, whether now or hereafter outstanding (each, a "RESTRICTED
PAYMENT"), except for (i) dividends payable by the Borrower solely in shares of
any class of its common stock and (ii) Restricted Payments made by any
Subsidiary to the Borrower or to another Subsidiary; provided, that no Default
or Event of Default has occurred and is continuing at the time such dividend is
paid.
SECTION 7.6 Sale of Assets. The Borrower will not, and will not permit any
of its Subsidiaries to, convey, sell, lease, assign, transfer or otherwise
dispose of, any of its assets, Licenses, business or property, whether now owned
or hereafter acquired, or, in the case of any Subsidiary, issue or sell any
shares of such Subsidiary's common stock to any Person other than the Borrower
or a Subsidiary Loan Party, except:
55
(a) the sale or other disposition for fair market value of obsolete or
worn out property or other property not necessary for operations disposed
of in the ordinary course of business;
(b) the sale of Permitted Investments in the ordinary course of
business;
(c) the sale or disposition of real estate owned by Borrower as of the
Closing Date; and
(d) the sale or other disposition of such assets in an aggregate
amount not to exceed $500,000 (based upon sale price) in any fiscal year of
the Borrower.
SECTION 7.7 Transactions with Affiliates. The Borrower will not, and will
not permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
and conditions not less favorable to the Borrower or such Subsidiary than could
be obtained on an arm's-length basis from unrelated third parties, (b)
transactions between or among the Borrower and its Subsidiaries not involving
any other Affiliates, (c) any Restricted Payment permitted by Section 7.5, and
(d) payments under agreements as set forth in Schedule 7.7.
SECTION 7.8 Restrictive Agreements. The Borrower will not, and will not
permit any Subsidiary to, directly or indirectly, enter into, incur or permit to
exist any agreement that prohibits, restricts or imposes any condition upon (a)
the ability of the Borrower or any Subsidiary to create, incur or permit any
Lien upon any of its assets or properties, whether now owned or hereafter
acquired, or (b) the ability of any Subsidiary to pay dividends or other
distributions with respect to its common stock, to make or repay loans or
advances to the Borrower or any other Subsidiary, to Guarantee Indebtedness of
the Borrower or any other Subsidiary or to transfer any of its property or
assets to the Borrower or any Subsidiary of the Borrower; provided, that (i) the
foregoing shall not apply to restrictions or conditions imposed by law or by
this Agreement or any other Loan Document, (ii) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is sold and such sale is permitted
hereunder, (iii) clause (a) shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions and conditions apply only to the property or
assets securing such Indebtedness and (iv) clause (a) shall not apply to
customary provisions in leases and licenses restricting the assignment thereof
or the transfer of assets being licensed.
SECTION 7.9 Sale and Leaseback Transactions. The Borrower will not, and
will not permit any of the Subsidiaries to, enter into any arrangement, directly
or indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereinafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred.
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SECTION 7.10 Hedging Agreements. The Borrower will not, and will not permit
any of the Subsidiaries to, enter into any Hedging Agreement without the written
consent of the Administrative Agent.
SECTION 7.11 Amendment to Material Documents. The Borrower will not and
will not permit any Subsidiary to, amend, modify or waive any of its rights in a
manner materially adverse to the Lenders under its certificate of incorporation,
bylaws or other organizational documents.
SECTION 7.12 Accounting Changes. The Borrower will not, and will not permit
any Subsidiary to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP or SAP or approved by Borrower's
independent auditors, or change the fiscal year of the Borrower or of any
Subsidiary, except a change (after May 31, 2007) of the fiscal year of Borrower
ending December 31st and a change the fiscal year of a Subsidiary to conform its
fiscal year to that of the Borrower.
SECTION 7.13 Capital Expenditures. Excluding Permitted Acquisitions, the
Borrower will not, and will not permit any Subsidiary to make Capital
Expenditures in any fiscal year which exceeds $1,500,000 in the aggregate.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1 Events of Default. If any of the following events (each an
"EVENT OF DEFAULT") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or of any
reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment or otherwise, and such failure shall continue
unremedied for a period of three (3) Business Days; or
(b) the Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount payable under clause (a) of this
Article) payable under this Agreement or any other Loan Document, when and
as the same shall become due and payable, and such failure shall continue
unremedied for a period of five (5) Business Days; or
(c) any representation or warranty made or deemed made by or on behalf
of the Borrower or any Subsidiary in or in connection with this Agreement
or any other Loan Document (including the Schedules attached thereto) and
any amendments or modifications hereof, or in any certificate, report,
financial statement or other document submitted to the Administrative Agent
or the Lenders by any Loan Party or any representative of any Loan Party
pursuant to this Agreement or any other Loan Document shall be incorrect in
any material respect when made; or
57
(d) the Borrower shall fail to observe or perform any covenant or
agreement contained in Section 5.3 (with respect to the Borrower's
existence) or Articles VI or VII, provided that a failure to observe or
perform any covenant or agreement in Article VII shall not constitute an
Event of Default if such failure is capable of being cured and the Borrower
cures such failure within five (5) Business Days of the earlier of its
actual knowledge thereof or written notice thereof; or
(e) any Loan Party shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those referred to in
clauses (a), (b) and (d) above), and such failure shall remain unremedied
for 30 days after the earlier of (i) any officer of the Borrower becomes
aware of such failure, or (ii) written notice thereof shall have been given
to the Borrower by the Administrative Agent or any Lender; or
(f) the Borrower or any Subsidiary (whether as primary obligor or as
guarantor or other surety) shall fail to pay any principal of or premium or
interest on any Material Indebtedness that is outstanding, when and as the
same shall become due and payable (whether at scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument evidencing such Indebtedness; or any other event
shall occur or condition shall exist under any agreement or instrument
relating to such Indebtedness and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the effect of
such event or condition is to accelerate, or permit the acceleration of,
the maturity of such Indebtedness; or any such Indebtedness shall be
declared to be due and payable; or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or redemption),
purchased or defeased, or any offer to prepay, redeem, purchase or defease
such Material Indebtedness shall be required to be made, in each case prior
to the stated maturity thereof; or
(g) the Borrower or any Subsidiary shall (i) commence a voluntary case
or other proceeding or file any petition seeking liquidation,
reorganization or other relief under any federal, state or foreign
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a custodian, trustee, receiver, liquidator or
other similar official of it or any substantial part of its property, (ii)
consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (i) of
this Section, (iii) apply for or consent to the appointment of a custodian,
trustee, receiver, liquidator or other similar official for the Borrower or
any such Subsidiary or for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of
creditors, or (vi) take any action for the purpose of effecting any of the
foregoing; or
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the Borrower or any Subsidiary or its debts, or any
substantial part of its assets, under any federal, state or foreign
bankruptcy, insolvency or other similar law now or hereafter in effect or
(ii) the appointment of a custodian, trustee, receiver, liquidator or other
similar official for the Borrower or any Subsidiary or for a substantial
part of its assets, and in
58
any such case, such proceeding or petition shall remain undismissed for a
period of 60 days or an order or decree approving or ordering any of the
foregoing shall be entered; or
(i) (i) any insurance commissioner or any other state insurance
regulatory official shall intervene through legal proceedings and assume
control of any material portion of the business or assets of any Insurance
Company or (ii) any insurance commissioner or any state insurance
regulatory official shall initiate any legal proceeding not dismissed or
stayed within 90 days with respect to a material portion of the business of
any Insurance Company, or the Borrower or any Subsidiary shall
intentionally facilitate or take any affirmative action toward facilitating
such intervention, excluding therefrom normal regulatory practices
including the review and approval of rates and forms, market conduct
examinations and other regular examinations; or
(j) the Borrower or any Subsidiary shall admit in writing its
inability to pay its debts as they become due; or
(k) an ERISA Event shall have occurred that, when taken together with
other ERISA Events that have occurred, could reasonably be expected to
result in liability to the Borrower and the Subsidiaries in an aggregate
amount exceeding $500,000; or
(l) any judgment or order for the payment of money in excess of
$1,000,000 in the aggregate shall be rendered against the Borrower or any
Subsidiary, and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there shall
be a period of 45 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal, settlement or
otherwise, shall not be in effect; or
(m) any non-monetary judgment or order shall be rendered against the
Borrower or any Subsidiary that could reasonably be expected to have a
Material Adverse Effect, and there shall be a period of 45 consecutive days
during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
(n) a Change in Control shall occur or exist; or
(o) any provision of any Subsidiary Guarantee Agreement or Indemnity
and Contribution Agreement, shall for any reason cease to be valid and
binding on, or enforceable against, any Subsidiary Loan Party, or any
Subsidiary Loan Party shall so state in writing, or any Subsidiary Loan
Party shall seek to terminate its Subsidiary Guarantee Agreement or
Indemnity and Contribution Agreement; or
(p) a default under any of the Security Documents exists, subject to
any applicable cure periods or grace periods therein;
then, and in every such event (other than an event with respect to the Borrower
described in clause (g) or (h) of this Section) and at any time thereafter
during the continuance of such event, the Administrative Agent may, and upon the
written request of the Required Lenders shall, by notice to the Borrower, take
any or all of the following actions, at the same or different times: (i)
59
terminate the Commitments, whereupon the Commitment of each Lender shall
terminate immediately; (ii) declare the principal of and any accrued interest on
the Loans, and all other Obligations owing hereunder, to be, whereupon the same
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower and
(iii) exercise all remedies contained in any other Loan Document; and that, if
an Event of Default specified in either clause (g) or (h) shall occur, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon, and all fees, and all other
Obligations shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION 9.1 Appointment of Administrative Agent.
(a) Each Lender irrevocably appoints SunTrust Bank as the
Administrative Agent and authorizes it to take such actions on its behalf
and to exercise such powers as are delegated to the Administrative Agent
under this Agreement and the other Loan Documents, together with all such
actions and powers that are reasonably incidental thereto. The
Administrative Agent may perform any of its duties hereunder by or through
any one or more sub-agents appointed by the Administrative Agent. The
Administrative Agent and any such sub-agent may perform any and all of its
duties and exercise its rights and powers through their respective Related
Parties. The exculpatory provisions set forth in this Article shall apply
to any such sub-agent and the Related Parties of the Administrative Agent
and any such sub-agent and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for
herein as well as activities as Administrative Agent.
(b) The Issuing Bank shall act on behalf of the Lenders with respect
to any Letters of Credit issued by it and the documents associated
therewith until such time and except for so long as the Administrative
Agent may agree at the request of the Required Lenders to act for the
Issuing Bank with respect thereto; provided, that the Issuing Bank shall
have all the benefits and immunities (i) provided to the Administrative
Agent in this Article IX with respect to any acts taken or omissions
suffered by the Issuing Bank in connection with Letters of Credit issued by
it or proposed to be issued by it and the application and agreements for
Letters of Credit pertaining to the Letters of Credit as fully as the term
"Administrative Agent" as used in this Article IX included the Issuing Bank
with respect to such acts or omissions and (ii) as additionally provided in
this Agreement with respect to the Issuing Bank.
SECTION 9.2 Nature of Duties of Administrative Agent. The Administrative
Agent shall not have any duties or obligations except those expressly set forth
in this Agreement and the other Loan Documents. Without limiting the generality
of the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default or an Event
of Default has occurred and is continuing, (b) the Administrative Agent shall
60
not have any duty to take any discretionary action or exercise any discretionary
powers, except those discretionary rights and powers expressly contemplated by
the Loan Documents that the Administrative Agent is required to exercise in
writing by the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
10.2), and (c) except as expressly set forth in the Loan Documents, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or
any of its Subsidiaries that is communicated to or obtained by the
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.2) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall not be deemed to have
knowledge of any Default or Event of Default unless and until written notice
thereof is given to the Administrative Agent by the Borrower or any Lender, and
the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with any Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements, or other terms and conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article III or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.
SECTION 9.3 Lack of Reliance on the Administrative Agent. Each of the
Lenders, the Swingline Lender and the Issuing Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each of
the Lenders, the Swingline Lender and the Issuing Bank also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it has deemed
appropriate, continue to make its own decisions in taking or not taking of any
action under or based on this Agreement, any related agreement or any document
furnished hereunder or thereunder.
SECTION 9.4 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Lenders with
respect to any action or actions (including the failure to act) in connection
with this Agreement, the Administrative Agent shall be entitled to refrain from
such act or taking such act, unless and until it shall have received
instructions from such Lenders; and the Administrative Agent shall not incur
liability to any Person by reason of so refraining. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Lenders where required by the terms of this Agreement.
SECTION 9.5 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument, document
or other writing believed by it to be genuine
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and to have been signed, sent or made by the proper Person. The Administrative
Agent may also rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person and shall not incur any liability
for relying thereon. The Administrative Agent may consult with legal counsel
(including counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or not taken
by it in accordance with the advice of such counsel, accountants or experts.
SECTION 9.6 The Administrative Agent in its Individual Capacity. The bank
serving as the Administrative Agent shall have the same rights and powers under
this Agreement and any other Loan Document in its capacity as a Lender as any
other Lender and may exercise or refrain from exercising the same as though it
were not the Administrative Agent; and the terms "Lenders", "Required Lenders",
"holders of Notes", or any similar terms shall, unless the context clearly
otherwise indicates, include the Administrative Agent in its individual
capacity. The bank acting as the Administrative Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or Affiliate of the Borrower as if
it were not the Administrative Agent hereunder.
SECTION 9.7 Successor Administrative Agent.
(a) The Administrative Agent may resign at any time by giving notice
thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Administrative
Agent, subject to the approval by the Borrower provided that no Event of
Default shall exist at such time. If no successor Administrative Agent
shall have been so appointed, and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Administrative Agent,
which shall be a commercial bank organized under the laws of the United
States of America or any state thereof or a bank which maintains an office
in the United States, having a combined capital and surplus of at least
$500,000,000.
(b) Upon the acceptance of its appointment as the Administrative Agent
hereunder by a successor, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents. If within 45
days after written notice is given of the retiring Administrative Agent's
resignation under this Section no successor Administrative Agent shall have
been appointed and shall have accepted such appointment, then on such 45th
day (i) the retiring Administrative Agent's resignation shall become
effective, (ii) the retiring Administrative Agent shall thereupon be
discharged from its duties and obligations under the Loan Documents and
(iii) the Required Lenders shall thereafter perform all duties of the
retiring Administrative Agent under the Loan Documents until such time as
the Required Lenders appoint a successor Administrative Agent as provided
above. After any retiring Administrative Agent's resignation hereunder, the
provisions of this Article IX shall continue in effect for the benefit of
such retiring Administrative Agent and its representatives and agents in
respect
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of any actions taken or not taken by any of them while it was serving as
the Administrative Agent.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Notices.
(a) Except in the case of notices and other communications expressly
permitted to be given by telephone, all notices and other communications to
any party herein to be effective shall be in writing and shall be delivered
by hand or overnight courier service, mailed by certified or registered
mail or sent by telecopy, as follows:
To the Borrower: First Acceptance Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
President & CEO
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Flexpoint Partners, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy Number: (312) 327-452
To the Administrative Agent: SunTrust Bank
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇, Director
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: SunTrust Agency Services
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇. ▇.
▇.▇. ▇▇▇ ▇▇▇▇
Mail Code 7662
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
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Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
To the Issuing Bank: SunTrust Bank
▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇. E./Mail Code 3706
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
To the Swingline Lender: SunTrust Bank
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇, Director
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
To any other Lender: the address set forth in the
Administrative Questionnaire
Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
such notices and other communications shall, when transmitted by overnight
delivery, or faxed, be effective when delivered for overnight (next-day)
delivery, or transmitted in legible form by facsimile machine,
respectively, or if mailed, upon the third Business Day after the date
deposited into the mails or if delivered, upon delivery; provided, that
notices delivered to the Administrative Agent, the Issuing Bank or the
Swingline Bank shall not be effective until actually received by such
Person at its address specified in this Section.
(b) Any agreement of the Administrative Agent and the Lenders herein
to receive certain notices by telephone or facsimile is solely for the
convenience and at the request of the Borrower. The Administrative Agent
and the Lenders shall be entitled to rely on the authority of any Person
purporting to be a Person authorized by the Borrower to give such notice
and the Administrative Agent and Lenders shall not have any liability to
the Borrower or other Person on account of any action taken or not taken by
the Administrative Agent or the Lenders in reliance upon such telephonic or
facsimile notice. The obligation of the Borrower to repay the Loans and all
other Obligations hereunder shall not be affected in any way or to any
extent by any failure of the Administrative Agent and the Lenders to
receive written confirmation of any telephonic or facsimile notice or the
receipt by the Administrative Agent and the Lenders of a confirmation which
is at variance with the terms understood by the Administrative Agent and
the Lenders to be contained in any such telephonic or facsimile notice.
SECTION 10.2 Waiver; Amendments.
(a) No failure or delay by the Administrative Agent, the Issuing Bank
or any Lender in exercising any right or power hereunder or any other Loan
Document, and no course of dealing between the Borrower and the
Administrative Agent or any Lender, shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right
64
or power or any abandonment or discontinuance of steps to enforce such
right or power, preclude any other or further exercise thereof or the
exercise of any other right or power hereunder or thereunder. The rights
and remedies of the Administrative Agent, the Issuing Bank and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies provided by law. No waiver of any
provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) of this Section, and then such
waiver or consent shall be effective only in the specific instance and for
the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or the issuance of a Letter of Credit shall
not be construed as a waiver of any Default or Event of Default, regardless
of whether the Administrative Agent, any Lender or the Issuing Bank may
have had notice or knowledge of such Default or Event of Default at the
time.
(b) No amendment or waiver of any provision of this Agreement or the
other Loan Documents, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Borrower and the Required Lenders or the Borrower
and the Administrative Agent with the consent of the Required Lenders and
then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, that no
amendment or waiver shall: (i) increase the Commitment of any Lender
without the written consent of such Lender, (ii) reduce the principal
amount of any Loan or LC Disbursement or reduce the rate of interest
thereon, or reduce any fees payable hereunder, without the written consent
of each Lender affected thereby, (iii) postpone the date fixed for any
payment of any principal of, or interest on, any Loan or LC Disbursement or
interest thereon or any fees hereunder or reduce the amount of, waive or
excuse any such payment, or postpone the scheduled date for the termination
or reduction of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.21(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (v) change any of the provisions of this
Section or the definition of "Required Lenders" or any other provision
hereof specifying the number or percentage of Lenders which are required to
waive, amend or modify any rights hereunder or make any determination or
grant any consent hereunder, without the consent of each Lender; (vi)
release any guarantor or limit the liability of any such guarantor under
any guaranty agreement; (vii) release all or substantially all collateral
(if any) securing any of the Obligations; provided further, that no such
agreement shall amend, modify or otherwise affect the rights, duties or
obligations of the Administrative Agent, the Swingline Bank or the Issuing
Bank without the prior written consent of such Person.
SECTION 10.3 Expenses; Indemnification.
(a) Subject to the provisions of Section 5.7, the Borrower shall pay
(i) all reasonable, out-of-pocket costs and expenses of the Administrative
Agent and its Affiliates, including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent and its Affiliates,
in connection with the syndication of the credit facilities provided for
herein, the preparation and administration of the Loan Documents and any
amendments, modifications or waivers thereof (whether or not the
transactions
65
contemplated in this Agreement or any other Loan Document shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the
Issuing Bank in connection with the issuance, amendment, renewal or
extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out-of-pocket costs and expenses (including, without limitation,
the reasonable fees, charges and disbursements of outside counsel and the
allocated cost of inside counsel) incurred by the Administrative Agent, the
Issuing Bank or any Lender in connection with the enforcement or protection
of its rights in connection with this Agreement, including its rights under
this Section, or in connection with the Loans made or any Letters of Credit
issued hereunder, including all such out-of-pocket expenses incurred during
any workout, restructuring or negotiations in respect of such Loans or
Letters of Credit.
(b) The Borrower shall indemnify the Administrative Agent (and any
sub-agent thereof), each Lender and the Issuing Bank, and each Related
Party of any of the foregoing Persons (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses (including the
reasonable and documented fees, charges and disbursements of any outside
counsel for any Indemnitee), incurred by any Indemnitee or asserted against
any Indemnitee by any third party or by the Borrower or any other Loan
Party arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by
the parties hereto of their respective obligations hereunder or thereunder
or the consummation of the transactions contemplated hereby or thereby,
(ii) any Loan or Letter of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such
Letter of Credit), (iii) any actual or alleged presence or Release of
Hazardous Materials on or from any property owned or operated by the
Borrower or any of its Subsidiaries, or any Environmental Liability related
in any way to the Borrower or any of its Subsidiaries, or (iv) any actual
or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory,
whether brought by a third party or by the Borrower or any other Loan
Party, and regardless of whether any Indemnitee is a party thereto,
provided that such indemnity shall not, as to any Indemnitee, be available
to the extent that such losses, claims, damages, liabilities or related
expenses (x) are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnitee or (y) result from a claim brought by
the Borrower or any other Loan Party against an Indemnitee for breach in
bad faith of such Indemnitee's obligations hereunder or under any other
Loan Document, if the Borrower or such Loan Party has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court
of competent jurisdiction.
(c) The Borrower shall pay, and hold the Administrative Agent and each
of the Lenders harmless from and against, any and all stamp, documentary,
and other similar taxes with respect to this Agreement and any other Loan
Documents, any collateral described therein, or any payments due
thereunder, and save the Administrative Agent
66
and each Lender harmless from and against any and all liabilities with
respect to or resulting from any delay or omission to pay such taxes.
(d) To the extent that the Borrower fails to pay any amount required
to be paid to the Administrative Agent, the Issuing Bank or the Swingline
Lender under clauses (a), (b) or (c) hereof, each Lender severally agrees
to pay to the Administrative Agent, the Issuing Bank or the Swingline
Lender, as the case may be, such Lender's Pro Rata Share (determined as of
the time that the unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided, that the unreimbursed expense or indemnified
payment, claim, damage, liability or related expense, as the case may be,
was incurred by or asserted against the Administrative Agent, the Issuing
Bank or the Swingline Lender in its capacity as such.
(e) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to actual or direct damages) arising out of, in connection with or
as a result of, this Agreement or any agreement or instrument contemplated
hereby, the transactions contemplated therein, any Loan or any Letter of
Credit or the use of proceeds thereof.
(f) All amounts due under this Section shall be payable promptly after
written demand therefor; provided that such written request shall set forth
such amounts in reasonable detail.
SECTION 10.4 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower may not assign or transfer any of its
rights hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such consent shall
be null and void).
(b) Any Lender may at any time assign to one or more assignees all or
a portion of its rights and obligations under this Agreement and the other
Loan Documents (including all or a portion of its Commitment and the Loans
and LC Exposure at the time owing to it); provided, that (i) except in the
case of an assignment to a Lender or an Affiliate (if the term Affiliate is
defined as Control with more than 50%) of a Lender, each of the Borrower
and the Administrative Agent (and, in the case of an assignment of all or a
portion of a Commitment or any Lender's obligations in respect of its LC
Exposure or Swingline Exposure, the Issuing Bank and the Swingline Lender)
must give their prior written consent (which consent shall not be
unreasonably withheld or delayed), (ii) except in the case of an assignment
to a Lender or an Affiliate (if the term Affiliate is defined as Control
with more than 50%) of a Lender or an assignment of the entire amount of
the assigning Lender's Commitment hereunder or an assignment while an Event
of Default has occurred and is continuing, the amount of the Commitment of
the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is
delivered to the
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Administrative Agent) shall not be less than $1,000,000 (unless the
Borrower and the Administrative Agent shall otherwise consent), (iii) each
partial assignment shall be made as an assignment of a proportionate part
of all the assigning Lender's rights and obligations under this Agreement
and the other Loan Documents, (iv) the assigning Lender and the assignee
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee payable by the
assigning Lender or the assignee (as determined between such Persons) in an
amount equal to $3,500 and (v) such assignee, if it is not a Lender, shall
deliver a duly completed Administrative Questionnaire to the Administrative
Agent; provided, that any consent of the Borrower otherwise required
hereunder shall not be required if an Event of Default has occurred and is
continuing. Upon the execution and delivery of the Assignment and
Acceptance and payment by such assignee to the assigning Lender of an
amount equal to the purchase price agreed between such Persons, such
assignee shall become a party to this Agreement and any other Loan
Documents to which such assigning Lender is a party and, to the extent of
such interest assigned by such Assignment and Acceptance, shall have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender shall be released from its obligations hereunder to a corresponding
extent (and, in the case of an Assignment and Acceptance covering all of
the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled
to the benefits of Sections 2.18, 2.19 and 2.20 and 10.3. Upon the
consummation of any such assignment hereunder, the assigning Lender, the
Administrative Agent and the Borrower shall make appropriate arrangements
to have new Notes issued if so requested by either or both the assigning
Lender or the assignee. Any assignment or other transfer by a Lender that
does not fully comply with the terms of this clause (b) shall be treated
for purposes of this Agreement as a sale of a participation pursuant to
clause (c) below.
(c) Any Lender may at any time, without the consent of the Borrower,
the Administrative Agent, the Issuing Bank or the Swingline Lender, sell
participations to one or more banks or other entities (a "Participant") in
all or a portion of such Lender's rights and obligations under this
Agreement (including all or a portion of its Commitment, the Loans owing to
it and its LC Exposure); provided, that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of its
obligations hereunder, and (iii) the Borrower, the Administrative Agent,
the Swingline Bank, the Issuing Bank and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other Loan
Documents. Any agreement between such Lender and the Participant with
respect to such participation shall provide that such Lender shall retain
the sole right and responsibility to enforce this Agreement and the other
Loan Documents and the right to approve any amendment, modification or
waiver of this Agreement and the other Loan Documents; provided, that such
participation agreement may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
of this Agreement described in the first proviso of Section 10.2(b) that
affects the Participant. The Borrower agrees that each Participant shall be
entitled to the benefits of Sections 2.18, 2.19, 2.20 and 2.21 to the same
extent as if it were a Lender hereunder and had acquired its interest by
assignment pursuant to paragraph (b); provided, that no
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Participant shall be entitled to receive any greater payment under Section
2.18, 2.19, 2.20 or 2.21 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such
Participant unless the sale of such participation is made with the
Borrower's prior written consent. To the extent permitted by law, the
Borrower agrees that each Participant shall be entitled to the benefits of
Section 2.21 as though it were a Lender, provided, that such Participant
agrees to share with the Lenders the proceeds thereof in accordance with
Section 2.21 as fully as if it were a Lender hereunder. A Participant that
would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.21 unless the Borrower is notified of such
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.21(e) as though it were a
Lender hereunder.
(d) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement and its Notes (if
any) to secure its obligations to a Federal Reserve Bank without complying
with this Section; provided, that no such pledge or assignment shall
release a Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto.
(e) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle
(an "SPV"), identified as such in writing from time to time by the Granting
Lender to the Administrative Agent and the Borrower, the option to provide
to the Borrower all or any part of any Loan that such Granting Lender would
otherwise be obligated to make to the Borrower pursuant to this Agreement;
provided, that (i) nothing herein shall constitute a commitment by any SPV
to make any Loan and (ii) if an SPV elects not to exercise such option or
otherwise fails to provide all or any part of any Loan, the Granting Lender
shall be obligated to make such Loan pursuant to the terms hereof. The
making of a Loan by an SPV hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if such Loan were made by such
Granting Lender. Each party hereto hereby agrees that no SPV shall be
liable for any indemnity or similar payment obligation under this Agreement
(all liability for which shall remain with the Granting Lender). In
furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that, prior to
the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior indebtedness of any SPV, it
will not institute against, or join any other person in instituting
against, such SPV any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under the laws of the United States or any State
contrary in this Section 10.4, any SPV may (i) with notice to, but without
the prior written consent of, the Borrower and the Administrative Agent and
without paying any processing fee therefor, assign all or a portion of its
interests in any Loans to the Granting Lender or to any financial
institutions (consented to by the Borrower and the Administrative Agent)
providing liquidity and/or credit support to or for the account of such SPV
to support the funding or maintenance of Loans and (ii) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee
or credit or liquidity enhancement to such SPV. As this Section 10.4(e)
applies to any particular SPV, this Section may not be amended without the
written consent of such SPV.
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SECTION 10.5 Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement and the other Loan Documents shall be construed in
accordance with and be governed by the law (without giving effect to the
conflict of law principles thereof) of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the non-exclusive jurisdiction of the United
States District Court of the Southern District of New York, and Supreme
Court of the State of New York sitting in New York County and any appellate
court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any other Loan Document or the transactions
contemplated hereby or thereby, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York state court or, to
the extent permitted by applicable law, such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law. Nothing in
this Agreement or any other Loan Document shall affect any right that the
Administrative Agent, the Issuing Bank or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or any other Loan
Document against the Borrower or its properties in the courts of any
jurisdiction.
(c) The Borrower irrevocably and unconditionally waives any objection
which it may now or hereafter have to the laying of venue of any such suit,
action or proceeding described in paragraph (b) of this Section and brought
in any court referred to in paragraph (b) of this Section. Each of the
parties hereto irrevocably waives, to the fullest extent permitted by
applicable law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to the service
of process in the manner provided for notices in Section 10.1. Nothing in
this Agreement or in any other Loan Document will affect the right of any
party hereto to serve process in any other manner permitted by law.
SECTION 10.6 WAIVER OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND
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THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 10.7 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
each Lender and the Issuing Bank shall have the right, at any time or from time
to time upon the occurrence and during the continuance of an Event of Default,
without prior notice to the Borrower, any such notice being expressly waived by
the Borrower to the extent permitted by applicable law, to set off and apply
against all deposits (general or special, time or demand, provisional or final,
but excluding all trust and tax withholding accounts) of the Borrower at any
time held or other obligations at any time owing by such Lender and the Issuing
Bank to or for the credit or the account of the Borrower against any and all
Obligations due and owing and held by such Lender or the Issuing Bank, as the
case may be, irrespective of whether such Lender or the Issuing Bank shall have
made demand hereunder. Each Lender and the Issuing Bank agree promptly to notify
the Administrative Agent and the Borrower after any such set-off and any
application made by such Lender and the Issuing Bank, as the case may be;
provided, that the failure to give such notice shall not affect the validity of
such set-off and application.
SECTION 10.8 Counterparts; Integration. This Agreement may be executed by
one or more of the parties to this Agreement on any number of separate
counterparts (including by telecopy), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. This
Agreement, the other Loan Documents, and any separate letter agreement(s)
relating to any fees payable to the Administrative Agent constitute the entire
agreement among the parties hereto and thereto regarding the subject matters
hereof and thereof and supersede all prior agreements and understandings, oral
or written, regarding such subject matters.
SECTION 10.9 Survival. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent, the Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of Sections 2.19, 2.20, 2.21, and 10.3 and Article
IX shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof. All
representations and warranties made herein, in the certificates, reports,
notices, and other documents delivered pursuant to this Agreement shall survive
the execution and delivery of this Agreement and the other Loan Documents, and
the making of the Loans and the issuance of the Letters of Credit.
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SECTION 10.10 Severability. Any provision of this Agreement or any other
Loan Document held to be illegal, invalid or unenforceable in any jurisdiction,
shall, as to such jurisdiction, be ineffective to the extent of such illegality,
invalidity or unenforceability without affecting the legality, validity or
enforceability of the remaining provisions hereof or thereof; and the
illegality, invalidity or unenforceability of a particular provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
SECTION 10.11 Confidentiality. Each of the Administrative Agent, the
Issuing Bank and each Lender agrees to take normal and reasonable precautions to
maintain the confidentiality of any information provided to it by the Borrower
or any Subsidiary, except that such information may be disclosed (i) to any
Related Party of the Administrative Agent, the Issuing Bank or any such Lender,
including without limitation accountants, legal counsel and other advisors, (ii)
to the extent required by applicable laws or regulations or by any subpoena or
similar legal process, provided that Borrower shall be given prior written
notice of such disclosure to the extent permitted by law, regulations or such
process (iii) to the extent requested by any regulatory agency or authority,
(iv) to the extent that such information becomes publicly available other than
as a result of a breach of this Section, or which becomes available to the
Administrative Agent, the Issuing Bank, any Lender or any Related Party of any
of the foregoing on a nonconfidential basis from a source other than the
Borrower, (v) in connection with the exercise of any remedy hereunder or any
suit, action or proceeding relating to this Agreement or the enforcement of
rights hereunder, and (ix) subject to provisions substantially similar to this
Section 10.11, to any actual or prospective assignee or Participant, or (vi)
with the consent of the Borrower. Any Person required to maintain the
confidentiality of any information as provided for in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
information as such Person would accord its own confidential information.
SECTION 10.12 Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which may be treated as interest on
such Loan under applicable law (collectively, the "CHARGES"), shall exceed the
maximum lawful rate of interest (the "MAXIMUM RATE") which may be contracted
for, charged, taken, received or reserved by a Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Rate to the date of
repayment, shall have been received by such Lender.
(remainder of page left intentionally blank)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
FIRST ACCEPTANCE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Title: President
---------------------------------
SUNTRUST BANK
as Administrative Agent, as Issuing
Bank, as Swingline Lender and as a
Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Managing Director
---------------------------------
Revolving Commitment: $ 2,500,000
LC Commitment: $ 2,500,000
Swingline Commitment: $ 500,000
Term Loan Commitment: $12,500,000
73
FIRST BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Vice President
---------------------------------
Revolving Commitment: $ 2,500,000
LC Commitment: $ 2,500,000
Term Loan Commitment: $12,500,000
74
